Summary: The principal factors affecting defense manpower costs and the issues involved in cost reduction are based on the Department of Defense (DOD) materials, congressional hearings and reports, and reports and studies of several other organizations.
The portion of the DOD budget that is related to manpower costs increased because of switching to an all-volunteer force, adopting the pay raise comparability principle, rapid rises in military retirement costs, changes in the composition of defense manpower, and changes in grade distribution. Savings in manpower costs can be achieved only by reducing the number of personnel, reducing pay levels, or using personnel more efficiently. Manpower requirements depend upon perceived threats to national security. Reducing pay to achieve savings would require a judgment that present levels of compensation and recruitment policies could be adjusted to attract the needed manpower at a lower net cost. Potential efficiency improvements are in five areas: (1) reducing the size of headquarters and support functions; (2) relying on more reserve forces; (3) converting from military to civilian positions; (4) reducing military turnover; and (5) making training more efficient.
