Army Borrows From Tomorrow to Pay Today

The U.S. Army, one of the top employers of college grads, created a $20,000 “quick ship” bonus in July to accelerate the process between the date on which an enlistee commits and the date on which they start basic training. That time period used to often be measured in months. The new bonus has reduced the delay to days, an astounding achievement for the Army.
An average soldier coming out of basic training receives $17,400 per year so the $20,000 quick ship bonus more than doubles their first year pay, a significant incentive to those who enlist at least in part because of financial considerations. So where’s the problem? Well, the problem isn’t today or even tomorrow. The problem is next month and next year. Let me explain.

If a soldier enlists today and does not accept the quick ship bonus, he may not report for basic training for months. For ease of discussion let’s assume that he wouldn’t report for about three months, which is late November. But if the soldier accepts the quick ship bonus, he may report within a week. What the Army is doing is essentially borrowing from November recruiting numbers in order to meet its August goals. While that may be six of one versus half a dozen of another, the reality is that the Army is undoubtedly shifting its recruiting challenges from August to November.
Meeting their goals today is admirable and I applaud the Army for its creative thinking. Their recruitment advertising and related practices are almost always leading edge and the recruiting challenges that they face are so much more difficult than those of a corporate employer that it is difficult to even draw comparisons between the two groups. Yet there are pros and cons to almost everything and these quick ship bonuses are no exception.
From July 25th, which was the start of the quick ship bonus period, through August 13th, 3,814 of the Army’s 4,149 recruits accepted the bonus. That’s an acceptance rate of almost 92 percent. How many of those 3,814 would have agreed to start within days if it had not been for the bonus? That’s anyone’s guess yet surely it would have been a lot fewer than 92 percent. So the Army is much more likely to hit its recruiting numbers for 2007 but its success today is coming at the expense of its recruiting success in 2008.