Sunday, 24 March 2013

Not a penny more, not a penny less? The Armed Forces Pay Review


The Armed Forces Pay Review Body (AFPRB) issued its annual report recently, outlining its case for a pay rise for the armed forces as the public sector pay freeze slowly begins a near glacial pace of melting. The top level recommendation that they receive 1% pay rise and a small increase to X Factor (the figure which provides a compensation for the challenges of service life relative to civilian life) was eventually accepted in full, following a brief political spat and some odd allegations that because the head of the committee was coming to the end of their fixed tenure, he was being ‘fired’.

The report is interesting in several ways, not just because it helps reaffirm to all serving personnel they are receiving a pay rise, but also because of some of the nuggets of information it contains about wider service issues.

The first take home from the report is that British military personnel are incredibly expensive to employ. Following the implementation of the review, the cheapest trained private / able seaman will be on a salary of £17,765 per year, plus allowances and hugely subsidised accommodation and food. The salary scale for the higher payband now runs from £17,765 through to £29,357 for a level 9 private. Anyone deploying on OP HERRICK will receive a further £5,000 tax free bonus, plus operational allowances. By the time you reach Sgt level, the payband ranges from £33 - £37,000 per year plus allowances.

The clear message to be seen here is that the easiest way to make savings measures is to cut manpower levels. The military have become an extraordinarily expensive asset to employ, and one has to wonder whether we are possibly reaching the point where the wages bill is likely to become almost unaffordable within current budget levels.

The problem we see here is that the military are perhaps a victim of their own success – well paid, no one would want to give them a pay cut willingly – indeed one only has to look at the recent budget to see the view that the military should not be constrained by wider public sector pay restraint. At the same time though, the more the salary grows, the more pressure is placed on the budget to afford the wages bill. At some point something has to give. One has to ask the question, even rhetorically, as to whether we are paying our military personnel too much now? The issue is that for many of the entry level military posts, no specialist skills or qualifications are required, and the work in barracks is often routine and straightforward. As the Army withdraws from HERRICK and barracks life becomes routine, the reality will be that most soldiers will occupy a far more stable and fixed existence than they have for decades. While exercises and small deployments will doubtless continue, the pressing need to train for HERRICK will have reduced, as Army life is likely to become a more modern version of BAOR. At this point, one can almost see situations emerging where people question why we are paying so much to the military in salaries – the public support exists at present, and no one currently begrudges soldiers wages, but take away the deployment opportunities and it may well be the case that hard questions are asked about why we pay military personnel so much.

While this may sound like thinking the unthinkable, one only has to look at the Police, who have reduced their starting salaries by some £3000 per year for new entrants. Is it better to protect formations and headcount by reducing salaries, or is it better to maintain the payscale and lose more staff and capabilities. While this is all completely hypothetical, it is perhaps a point worth considering.

Why the long face - was the pay review really that bad?
The next interesting fact to emerge was the throwaway line about the Army reviewing its recruitment policy to improve Officer quality. The report briefly noted that there has been a marked decline in the quality of officer applicants applying to Sandhurst, although it doesn’t specify whether this is at the AOSB stage, or during the RMAS course. This is a fascinating comment to read – after some 12 years of seeing the Army deployed on operations, one would have thought that anyone applying to join would have a much clearer idea of what qualities it is that a potential Army Officer should have in order to pass the Commissioning Course. Similarly, the explosion in Internet forums such as ARRSE have seen a massive amount of additional support and assistance offered to candidates today compared to a few years ago. Yet despite this, there is still clearly a quality issue with candidates going through the system.

It is a genuinely fascinating issue – in a time of mass youth unemployment, particularly in the target range for Army entrants, and at a time when the Army’s requirements have arguably never been that low, there is still a struggle to get good candidates into the Army. By any large organisations standards, the Army is not taking on that many people – barely a few hundred per year are needed at Sandhurst, while BRNC and Cranwell need even fewer. What would be interesting is to understand why it is that there is a failure to get the right people in – the AOSB and its two sister service equivalents remains one of the most objective assessments of character out there. It is not fundamentally difficult, it is merely a test to determine whether one has the potential to develop leadership and pass a commissioning course, prior to then developing into a leader of men.

Whether the problem is that the current military career is not seen as high profile enough for some, nor rewarding enough for others is not clear. It is arguably not the case that people are not joining because of a lack of opportunities to deploy, indeed many who are applying to the military now probably haven’t considered in any great depth the likely path their career will take beyond the first year or two. So, something else is happening which is stopping the military getting the very best of the UK graduate and wider youth into the system. By all reasonable assumptions, they should be beating off high quality applicants, particularly given how many hundreds of students try the OTC each year to get a taste of Army life – this organisation alone should be more than enough to fill the slots of potential applicants at Sandhurst.

There is no right answer here, and Humphrey has discussed it more out of genuine curiosity than having any clue as to why this may be the case. But, there is clearly an issue with the recruitment system, and one has to wonder what can be done to rectify this challenge before it becomes a major problem.

Situation Vacant - Armoured Train Driver...
One area where recruitment is clearly proving a major challenge is that of TA Officer recruitment, where the report recommends a series of financial incentives to try and bring new junior officers into the TA. As the organisation is due to grow in size over the next few years to some 30,000 strong there is a clear and increasingly urgent requirement to get younger individuals in to form the next generation of junior officers who can lead it forward. Despite this, there seems to be a major challenge over getting sufficient individuals to stay the course over the long training period and then into positions where they can move to carrying out work of real value.

Part of the issue to the authors mind is that it is often difficult to take on the role of being a junior officer and also hold down a real job. While joining the Reserves as a new entrant is fun, with a high quality training pipeline and lots of opportunities to develop, which in turn can lead to a real sense of accomplishment on completion, it is perhaps less clear cut for a young officer. In addition to the normal training pipeline, there is often a requirement to take on a lot of extra unit work in the name of ‘development’ much of which takes up time and effort for seemingly little reward. At the same time completion of professional training moves one away from having a clearly defined role and into instead a more vague area where there is often no hugely useful day to day role – the officer being too junior to take on meaningful staff work posts , but at the same time there is little they can do other than hang around a unit. Humphreys personal experience is that there is a vastly higher attrition rate for junior officers compared to junior ratings – indeed within 5 years of his joining the Reserves, almost all of his peer group had resigned in frustration at the lack of reward, and lack of opportunity to deploy until much later on. Indeed he knows several officers who resigned as they were told there was no opportunity to deploy for at least 3-5 years, putting them at a point where their real careers would be taking off, and when deployment would do more harm than good to their wider interests.

This is a real challenge to manage – it is relatively easy to recruit, train and deploy a junior rating or soldier, but far more difficult to do the same for a junior officer. The author once worked out that in his area of the Reserves, it would take 2-3 years to take a new entrant to the point where they could deploy as a Junior, as opposed to 10-12 years as an officer.

It is perhaps very telling that in the review, the AFPRB noted that only 65% of the Reserves qualified for their bounty last year, which means that nearly one third of the entire reserve did not complete even a basic level of training over the preceding 12 months. This also serves as a reminder that despite the views that the Reserve will make up significant proportion of the future manpower structure, it will not necessarily always be available in the numbers that people may think.

So, the key point to the author here is that a lot of thought needs to go into the concept of how viable a Reserve Officer corps really is. It’s a lot of investment of time and training which is often lost in very short order should someone decide to walk away because they are bored. The model of providing retention payments will likely go a long way to helping improve this, giving people a reason to stay on past the ‘5 year itch’ point, by when reportedly nearly half of all new entrants have left.

Personally, the author believes that the UK should move to follow the Canadian model of trying to recruit junior officers at the university stage, when they can spend their summers training and building much deeper bonds with the service. Then as they enter the world of work, it is much easier to adapt to working to ensure time is made for the Reserves, rather than trying to shoehorn the reserves into your time. This is perhaps the biggest challenge, making those who join see the Reserves as something which isn’t just a fun hobby but which is also a second career. Too often it feels as if its seen as something done on the side for a bit of fun at weekends, and that it isn’t something which in fact is of increasing importance to the defence of the UK.

 

21 comments:

  1. A very interesting post. As far as affordability is concerned, the AFPRB report (para 2.38) seems to indicate that the military pension non-contribution is about 14% which has to be borne eventually by the taxpayer as well as the employers pension contribution - and then there is National Insurance ...

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  2. On the long term issue of Service pay and conditions, Kipling said it all in 'Tommy' a century ago. "It's Tommy this, and Tommy that, and chuck him out the brute. Buet it's 'ero of 'is country when the guns begin to shoot". Some of us remember the media profile the Services had back in the 70s, 80s and 90s. A lot less of the 'brave boys and girls' and a lot more of the 'disgracing the country by drunken riots in garrison towns and terrorising tourists in cypriot resports' and 'chinless public school wonders going on adventure holidays at public expense', with the odd left wing leavening around 'fascist/militarist lackeys defending the state against the people'. Sooner or later the tabloid agenda will swing back. At any rate, it always has before.

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  3. Hmmm, you're saying that the nation needs to lower the cost of the force by lowering the wage bill: despite being a well paid job the forces is finding it hard to get the quality people it needs. Therefore to decrease the cost lower the wages. What chance then of getting the quality people you need. Many moons ago when I was a young soldier we would gather, and lock away, lemonade bottles, to use the deposits to supplement our wages. Getting home for a weekend was outside my budget. Pads would argue - indeed fights broke out, over the surplus compo at the end of an exercise. Do we want to go back there. Also remember as you have posted in the past, the forces are the governments 'fire brigade' - literally when the fire brigade, prison warders, ambulance drivers go on strike; private security firms fail to produce the goods and devastating agricultural diseases blight the country side. I suggest that the inability to say 'no' to 'you will do this unpleasant, unforseen and untrained for (Insert task here.) x days or y weeks' deserves a decent wage.

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    1. TS - let me be really clear here, I'm not advocating cutting salaries. I am saying that as we move into the post HERRICK world, I wonder whether there may be pressure to consider doing it.
      You are right to highlight the dilemma at the centre of it - would poorer pay impact on quality. My instinct is no - people don't do the military purely for the money. I've never met anyone who went into the Armed Forces for the salary - it is a deeper motivation, indeed almost a calling. The problem with getting people through the door seems to be a wider one, and I think changes to the salary wouldnt have much of an effect - particularly as the public mindset feels like the military are poorly paid anyway, when in fact almost all of the military earn higher than the national average wage.

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    2. No people might not join for the money, but they do often stay for it. Retention is a big issue from what I see at the coal face. Various measures have beenbrought in that I've never seen used in my career to keep experience flowing out of the RAF. The idea that post afghan we will be sitting around in mundane jobs so the pay is pretty good, is pretty shallow. Just because people aren't on ops so we don't need that much pay as currently given is short sighted and narrow. Plenty of us get less than an equivalent role in civvy street, the idea that is put in this article that we are all paid a good wage is a myth not helped by the AFPRB. Infact the article seems to drift towards msm thinking military bod= pvt in the army. I know it's only a general comparison but I would have thought a nod towards the complexities of pay in relation to the very wide roles performed in the armed forces would have given this blog topic a bit more depth it needed in this area.
      The idea that we are well paid in comparison to civvy street is a weak one.
      On the face of it yes, but the comparison you use is little better than the
      sprurius one used by the AFPRB. While at first it might look good to
      compare us to various trainee firefighters etc to me it's a weak comparison such is the depth mentioned above. To my mind the phrase 'don't piss on me and tell me it's raining' springs to mind every time i read their comparisons.
      Sorry if the above is a bit sharp, as you can tell its one of my bugbears!

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  4. Regarding the quality of Potential officer Cadets, I think perhaps sites like ARRSE and all the information out there makes it alot easier to bluff the supposedly highly "objective" assesments at places like westbury for the AOSB, unfortunately the keenest won't always be the best, but thanks to the internet they will be prepared for most all that will get thrown at them, practicing plan-ex's speed/distance calculations, showing just the right level of enthusiasm for the rest of their team during obstacle coures, reading 5 newspapers a day the week running up to AOSB to appear well read. and so i'd imagine it is getting harder to pick the "genuinely" good from the "rehearsed" good. I don't know if that is the case or not, just my thoughts

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    1. There is definitely something in this - my sense is that people can arrive and show signs of 'coaching' without understanding what it actually means to demonstrate leadership potential.

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  5. With a degree from a reputable Red Brick costing in the region of £30k, is there any mileage in the Vets Benefits Route pursued with considerable success by the US - and in increasing numbers of sponsored students?

    As the Director of a Housing Association I'd also dearly like to get understand the financing of Army Housing and some welfare activities - I'd bet an HMAF Housing Association with a welfare, family support and resettlement arms (run by Service Personnel with professional managers) could both save money and make a real impact on quality, the services required to assist with retention, and post-service help and support.

    aka GNB

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    1. There are already considerable educational benefits associated with service in HM Forces, but its definitely an interesting idea to look at.

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  6. How about different vocations? I understand submariners get the highest starting pa, whether rating or officer

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  7. I started on seven guineas per week.
    When the firemen went on strike I became a fireman.
    When the prison warders went on strike I became a prison warder.
    When Rhodesia became Zimbabwe I was there keeping the peace.
    When Turkey invaded Cyprus I was there keeping the peace.
    Etc; Etc; Etc.
    I joined for the life, not the money. Nobody complained.

    Its not a case of "getting what you pay for"

    Compare the prices then, with the prices now and you see that £17000 per year for a private isn't exorbitant.
    I bought my home for £8000 and recently sold it for £450 000.
    How can a young person on low wages buy a home ?
    £17000 per year for a private isn't exorbitant.

    A gallon of petrol costs £6
    A pint of beer £3.50
    £17000 per year for a private isn't exorbitant.

    If the military are too expensive - reduce the commitment and reduce the manpower.


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    1. Hi Ianeon,
      You touch on the challenge of trying to get what you pay for and how you employ it. What I've trying to explore with this is the notion that what we are paying for is very expensive relative to other professions. Its not just the basic salary, its also the allowances, the professional trade skills, the wider costs of supporting a single service person to do their job.
      Now in some areas it makes enormous sense to have military personnel, but my worry is that the package of salary and associated perks are making it almost too expensive to afford to put military staff into many office positions now. For instance in London we once calculated on my team that it was costing the taxpayer nearly £50,000 per year for the services of a single Lance Corporal to do the administration - we were paying not only his salary, but food costs, travel costs and also accommodation. A civilian counterpart in the CS would have been lucky to earn £17,000 if that. The challenge is to make the case that it is worth spending a lot of money to keep staff in expensive office jobs doing very routine admin work which could easily be done by a civilian at far less cost.

      As for the £17K for a private - I don't think its an unreasonable starting salary for someone who can join with no qualifications, particularly when it goes up very rapidly on automatic spine progression (something being taken away from the civil service).
      At the same time, I do agree that its not just about the cost of privates - the pay differential at all levels is quite interesting. My impression, based partly on talking to friends leaving and job hunting, plus my own research is that relatively speaking the days of ex-mil walking out of an SO1 / OF5 job into £100-£150K per year jobs are possibly on the way out. Wages in civvy street are a lot less than some people seem to think, and I know quite a few who've regretted leaving as SO2s on nearly £60K per year plus allowances to discover that they struggled to get a similar income outside.

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  8. Good morning Sir H
    You say "it almost too expensive to afford to put military staff into many office positions now"

    My question would be "Then why do it" ?

    Why did/do you need a Lance Corporal to do the admin ?

    I'm all for rationalisation in manpower and equipment, especially in this age of austerity.

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    1. Easy in theory. But then you find that civil servants are an easy target of the media. can you imagine the headlines if you made brave "fighting men" in these positions redundant and repaced them with "civil servant desk jockeys". i can see the the front pages now. it doesnt matter that the position itself is a desk position. It comes down to politics then.

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    2. Ianeon - its a good question. There has traditionally been a need to provide posts where people can work as a respite from the front line tours which may involve more frequent time away from home, and also help career development.
      But, to my mind we need to be ruthlessly honest and ask whether we really NEED a lance corporal or Cpl doing adminstration for most office jobs. The capitation differences are such that you can employ two or three civilian staff for the same cost as one military. While there is a need to ensure we've got enough mil personnel to deploy on operations, similarly though, my own very personal view is that there are vast chunks of routine admin which could be done for far less cost and for little noticeable difference in terms of staff presence or capability. The question has to be, if we can get away with paying a civilian £16K to do a full time admin job running a section, why do we need a SNCO on £38-40k per year (plus allowances and accommodation) to do exactly the same job and usually working the same pattern?

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    3. Sorry - just realised I put the wrong salary brackets - it should read £18-20k for the latter example and they are being compared to SSGT / WO2 level of payscale.

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  9. In every unit I've been on it's a mix of both RAF and cs admin. Whole functions that used to be RAF admin have been transfered already to cs eg accounts flight.
    Most admin offices are a mix the cs hold the fort while the RAF adminer goes away. Very rare these days to see a wholely blue suit admin section.
    Slighty OT; when JPA came in ~25% of RAF admin post went.

    If we accept a need for mil admin, which from your posts you do, where do we draw the line?

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  10. Sir Humphrey, thank you for an extremely interesting post. Much of what you write rings true.

    Essentially MOD is in a difficult position of choosing between cutting employee numbers or reducing salaries, quite possibly this side of 2015 but definitely afterwards. Neither will be at all palatable to the electorate, but arguably the latter will seem less disastrous to the average Daily Express reader, after all most of UK PLC has had to put up with below inflation salary increases, many over the course of 3 or 4 years.

    I think the Army is in a particularly difficult situation, without the gong of Herrick to bang I suspect it is going to find itself having to cut regular numbers further. There are very few big levers they can pull in terms of equipment savings and manpower is by far their largest expense. While cap badges were saved under Army 2020* I think more are going to have to go after 2015, unfortunately.

    In this context, and given the capitation rate of a mil pers and their civilian equivalent, the cuts to MOD civil servant numbers following the SDSR seem increasingly short sighted. Actually, I’ll go further than that, they were a piece of political grandstanding aimed at ‘frothing at the mouth’ tabloids, and undertaken without a real understanding of the wider cost or impact to defence. The fact that the public sector is now recruiting faster than the private sector to back fill posts such as these, at an additional cost (it costs us in industry about £20k to recruit someone) illustrates just how idiotic it was.

    Whatever the outcome, we live in ‘interesting times’ within defence. I still await the “future of DE&S” announcement with some interest but this has been repeatedly delayed.

    * Naming their restructuring programme “Army2020” was a cunning ploy as it suggests that there will not be further changes to the force structure between now and the turn of the next decade. I think that actually much greater cuts are going to be needed 2015-2020.

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  11. Sir H,

    Cracking and informative post as usual.

    The issue of military salaries making Service personnel "too expensive" is something that is bothering the US as well (more so, as they deal with the effects of sequestration).

    Interesting US take on same issue here: http://www.military.com/daily-news/2012/12/03/escalating-military-pay-under-scrutiny.html



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  12. "Personally, the author believes that the UK should move to follow the Canadian model of trying to recruit junior officers at the university stage, when they can spend their summers training and building much deeper bonds with the service."

    The U.S. actually does this with their ROTC programs throughout the country on a much larger scale than the U.S. or Canada. In fact, the majority of officers in the U.S. Army come from ROTC programs, not West Point.

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  13. I meant the UK or Canada.

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