Personnel and Readiness

APEX ORIENTATION PROGRAM

March 3, 2008

Dr. David S. C. ChuUnder Secretary of Defense(Personnel and Readiness)

2

Assumptions

• We are engaged in a long, irregular war• The All Volunteer Force is our paradigm• Cost of manpower will rise more rapidly

than budget• We will complete transition to an

Operational Reserve• Civilians can play a larger role• Operations will be integrated• Geographic focus is on Mideast,

South/Southeast Asia, East/Northeast Asia

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Military Compensation

• 9th QRMC: identified significant gap in military member’s regular military compensation

• Goal: ensure military pay would be equal to the 70th percentile of earnings for private sector employees with comparable education and experience

• FY2000/2001/2002: Congress makes annual pay raises equal to ECI + 1/2% / targeted raises are introduced / President adds $1B to mil pay

• FY2001-2004: officer pay gap closed and 73% of enlisted gap eliminated (benchmark: 70% percentile)

• 2006: 97% of enlisted pay gap closed• Combination of increase in basic pay (ECI + ½) & substantial increases in

BAH • 2007 raise eliminated the gap

• 2.2% across-the-board pay raise • Targeted pay raises for mid-grade and senior enlisted as well as

warrant officers. • Expanded military basic pay table from 30 to 40 years of service

• 2008: 3.5% basic pay raise equals ECI + 0.5%• 2009: 3.4% proposed base pay increase

4Defense Advisory Committee on Military

Compensation Recommendations

• Change non-disability retirement system (i.e. vesting)

• Revamp Basic Pay table to better reward performance and to support longer career profiles where desirable

• Change housing allowances/other allowances (remove discrepancies in pay unrelated to performance)

• Consolidate and simplify Special and Incentive Pays (approved in NDAA 2008; to be executed over the next 10 years)

• Revise the health benefits for retirees -- more closely align benefit’s value to retiree with its cost to the Department of Defense

• Periodically evaluate of quality-of-life programs to ensure they are cost-effective and adequate

• Review Reserve Component pay/benefits to ensure equality to Active Component members

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Personnel Costs* vs DoD Topline

$0

$100

$200

$300

$400

$500

$600

FY1963 FY1973 FY1983 FY1993 FY2003

0

1

2

3

4

5

Active Duty Endstrength

DoD Topline

MilPers

CivPay

Military Benefits**

*Source: FYDP FY08 Position**Contracts for Service data not available at this time***Retirement, DHP, Family Housing

Th

en

Yea

r $

Bil

lio

ns

Act

ive

Du

ty E

nd

stre

ng

th (

Mil

lio

ns

)

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• Transform Department civilian human resources management system

• Advance DoD’s critical national security mission

• Respond swiftly and decisively to national security threats and other missions

• Accelerate DoD’s efforts to create a Total Force

• Retain and attract talented and motivated employees committed to excellence

• Compensate and reward employees based on performance and mission contribution

• Expand DoD’s ability to hire more quickly and offer competitive salaries

Making Civilians a Stronger Partner – National Security Personnel System (NSPS)

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Major Design Elements of NSPS HR System

• Classification - Simple, flexible pay banding structure• Compensation - Performance-based, market-

sensitive• Performance Management - Linked to agency

mission; results oriented; annual pay increase based on performance rating

• Staffing – more flexible authorities to allow SECDEF to act quickly to respond to mission needs: the right person, in the right place, at the right time

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2,251,9362,174,217

1,379,551

918,970

1,170,560

828,479

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

DoD Active Components

DoD Reserve Components (SelRes)

FY 1973 – FY 2007AC: - 38.7%RC: - 9.9%

The Role of the Reserve ComponentsDoD End Strengths

( FY73 – FY07)

Reductions from PeaksAC: - 38.7% (FY 1973 – FY 2006)RC: - 29.2% (FY 1989 – FY 2006)

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Reserve Force Mobilization StatisticsCurrent Selected Reserve Members Ever Mobilized for ONE/OEF/OIF

125,066

268,965

444,571

Data as of: December 31, 2007

Members Mobilized Once for ONE/OEF/OIF

Members Not Mobilized for ONE/OEF/OIF

Members Who Served More than Once in

ONE/OEF/OIF

Notes: 1. This data reflects individuals mobilized and not mobilized, and is not designed to portray units mobilized and not mobilized. 2. Data does not include 3,898 IRR members who are currently mobilized

Not Mobilized – 53.0%Mobilized – 47.0%

Total Current SelRes Population

Total Members currently serving in the SelRes 838,602

Total members mobilized for ONE/OEF/OIF 394,031 47.0%

Total members who have served once in ONE/OEF/OIF 268,965 32.1%

Total members who have served more than once in ONE/OEF/OIF 125,066 14.9%

Total members not mobilized for ONE/OEF/OIF 444,571 53.0%

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The Reserve components serve in both operational and strategic roles to meet the Nation’s military requirements in peace and war. In their operational roles, Reserve components participate in a full range of missions according to their Services’ force generation plans. Units and individuals participate in missions in an established cyclic or periodic manner that provides predictability for the combatant commands, the Services, Service members, their families, and employers. In their strategic roles, Reserve component units and individuals train or are available for missions in accordance with the national military strategy. In this role, the Reserve components provide strategic depth and are available to transition to the operational force as needed.

An Operational Reserve

Definition of the Reserve Components as an

Operational and Strategic Force

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A New Readiness Paradigm:Are Forces Ready for Assigned Missions?

Notional Data

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From:• Unit status• Inputs / resources• Deficiencies• Service centric• Periodic• Multiple reports /

systems

Defense Readiness Reporting System Represents a Real Change…

To:• Mission assessments• Outputs / capabilities• Their implications• Joint centric• Continuous• Enterprise views

Unclassified

Answers Ready for What?Unclassified

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Issue 2004 Status 2008 Status

Care of the Guard: Support of Guard members and families is the responsibility of federal, state and local agencies. The National Governors Association (NGA) has quantified state support in an annual survey with the following six categories: state employee support; educational benefits; tax and financial benefits; family support programs; licensing, registration and fees; and protections, recognition and employment support.

522 benefits 912 benefits

Severely injured support: States build support for severely injured coming to their states through programs such as “Heroes to Hometowns (H2H)”

2 local partnerships 31 state-level partnerships

In-state tuition: Allow where assigned, and allow continuance of in-state rates upon reassignment.

21 states continue support after reassignment

34 states provide support after reassignment

School transition of military dependent children: States participate in an Interstate Compact providing a policy platform for resolving the challenges experienced by military children

Only district – to – district agreements to support transition

Developed Inter State Compact to aid school transition under consideration by states

Spouse employment: States accommodate the needs of transferring spouses, through compacts and nationally recognized standards for licensure in desirable careers, such as teaching, nursing and real estate and otherwise remove barriers to the transfer of professional licenses and certifications

4 states with ABCTE, 6 states with STT and 17 states with NLC

7 states with ABCTE, 50 states with STT and 23 states with NLC8 states providing support through CAAsABCTE = American Board for Certification of Teacher Excellence

STT = Spouses – to – Teachers programNLC = Nurses Licensure CompactCAAs = Career Advancement Accounts

Family Support: Ten Key State Issues

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Issue 2004 Status 2008 Status

Unemployment compensation for military spouses: Granting eligibility to trailing spouses

10 states provided eligibility

21 states provide eligibility

Predatory Lending: DoD has established federal statute that limits the terms of payday, vehicle title and tax refund anticipation loans. Payday and vehicle title loans are overseen by state government agencies.

13 states prohibited payday lending

22 states agree in principle to enforce the federal regulation (plus 6 prohibit payday and vehicle title loans)

Voting: Coordinated support through electronic means to decrease the time needed to request and submit an absentee ballot. The 9 specific guidelines are: 45-day ballot transit time, elimination of the notary requirement, late registration procedures, special state write-in absentee ballot, reference to the Uniformed and Overseas Citizens Absentee Voting Act in the state election code, electronic transmission of election materials, expanded use of the federal write-in absentee ballot, emergency authority for chief election official, enfranchise citizens who have never resided in the U.S.

9 states comply with 7 – 9 criteria, 34 comply with 4 – 6 criteria, and 12 comply with 1 – 3 criteria

13 states comply with 7 – 9 criteria, 30 comply with 4 – 6 criteria, and 12 comply with 1 – 3 criteria

Foreign Language Requirements: Foreign languages are important to national security and economic competitiveness. States join with the DoD to frame a language strategy to develop foreign language skills needed to keep the nation secure and a leader in the global market.

No established process to develop state plans

3 prototype planning process to develop state plans

Accessible Support for Military Families: States mobilize every resource (military and civilian) through an integrated team to assist all military families with child care; resources for schools, teachers and youth; and to facilitate easy access to information, services and support

Service agencies work programs without coordination

47 states have established state-level coordination

Family Support: Ten Key State Issues

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Strategic Scorecard(on eight active criteria)

88

88

7 44 42

32

4041

50

47

1

35

26

11

GU52 AS

55

PR39

VI54

31

19 33

12

36

23

15

2

30

38

20

29

22

24

13

25

27

14

21

18

5

6

10

4

3

45

1617

8

VT53

NH51

43 MA34

RI49

CT37NJ

28

DE48

MD9

DC46

Number in state represents the ranking by size of total force and families residing within the state.

1

States/territories meeting at least 75 percent of criteria

States/territories meeting between 50 – 74 percent of criteria

States/territories meeting less than 50 percent of criteria

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2004 Overall Evaluation of StatesBased on Original Criteria

1

2

3

5

6

7

11

10

8

12

18

13

15

16

14

24

20

19

17

21

22

23

26

25

27

29

32

33

30

31

36

35

38

40

42

43

41

45

46

44

49

4

Number in state/territory represents the ranking by size of total force and families residing within the state.

VT52

NH50

MA34

RI48

CT37

NJ28

DE47

MD9

GU51

PR39

VI53

AS54

States/territories meeting at least 75 percent of all criteria

States/territories meeting between 50 – 74 percent of all criteria

States/territories meeting less than 50 percent of all criteria

17

2007 Overall Evaluation of StatesBased on Original Criteria

11

43

Number in state/territory represents the ranking by size of total force and families residing within the state.

VT52

NH50

MA34

RI48

CT37

NJ28

DE47

MD9

GU51

PR39

VI53

AS54

1

2

3

5

6

7

10

12

18

13

15

16

14

24

20

19

17

21

22

23

26

25

27

29

32

33

30

31

36

35

38

40

42

41

45

46

44

49

4

8

States/territories meeting at least 75 percent of all criteria

States/territories meeting between 50 – 74 percent of all criteria

States/territories meeting less than 50 percent of all criteria

18

In-State Tuition - 2004

43

Number in state/territory represents the ranking by size of total force and families residing within the state.

VT52

NH50

MA34

RI48

CT37

NJ28

DE47

MD9

Allow where assigned, and allow continuance of in-state rates upon reassignment

Allow where assigned

Allow only if resident

8

1

2

3

5

6

7

10

12

18

13

15

16

14

24

20

19

17

21

22

23

26

25

27

29

32

33

30

31

36

35

38

40

42

41

45

46

44

49

4

11

19

In-State Tuition - 2008

Number in state/territory represents the ranking by size of total force and families residing within the state.

Allow where assigned, and allow continuance of in-state rates upon reassignment

Allow where assigned

Allow only if resident

VT52

NH50

MA34

RI48

CT37

NJ28

DE47

MD9

1

2

3

5

6

7

10

12

18

13

15

16

14

24

20

19

17

21

22

23

26

25

27

29

32

33

30

31

36

35

38

40

42

41

45

46

44

49

4

8

43

11

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Defense Language & Culture Transformation

“In short, based on my experience serving seven

presidents, as a former Director of CIA and now as Secretary of Defense, I am here to make the case for strengthening our capacity to use ‘‘soft’ powersoft’ power’ and for better integrating it with ‘hard’ power.”

Secretary of Defense Landon Lecture

addressing ROTC cadets at Kansas State University

November 26, 2007

Language and Culture: Soft Skills for the 21st Century

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Defense Language & Culture Transformation

• Service Academies

• Expanded study abroad, summer immersion and foreign academy exchange opportunities

• Added instructor staff for strategic languages

• Service academies now require 4 semesters of foreign language study for non-technical majors

• Service ROTC Programs

• Embedded cultural awareness studies in ROTC curricula

• Developed pilot program to provide select ROTC schools grants to enhance language programs of strategic importance

• Units are encouraging ROTC cadets to take language electives, when available and feasible

Pre-accession focus provides a language and cultural foundation

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Defense Language & Culture Transformation

• Using Foreign Language Proficiency Bonus (FLPB) to encourage change• Incentivizing personnel to self-report, maintain, and improve their

skills • Authorized up to $1,000 per month for high-proficiency in strategic

languages

• Launched the National Language Service Corps to meet higher proficiency needs• Goal: 1,000 highly-skilled language professionals by 2010• Targeting 8 to 10 critical languages

• Building processes to track military/civilian retirees and separatees with the right skills• Surveying both military and civilian to gauge interest• Data base will capture volunteers only

Incentivizing personnel to self-report, maintain, and improve skills

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QUESTIONS?