Unclassified Resourcing the Workfforce Rich Robbins OUSD(P&R) January 26, 2010 Report Documentation Page Form Approved OMB No. 0704-0188 Public reporting burden for the collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington VA 22202-4302. Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to a penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. 1. REPORT DATE 3. DATES COVERED 26 JAN 2010 2. REPORT TYPE 00-00-2010 to 00-00-2010 4. TITLE AND SUBTITLE 5a. CONTRACT NUMBER Resourcing the Workforce 5b. GRANT NUMBER 5c. PROGRAM ELEMENT NUMBER 6. AUTHOR(S) 5d. PROJECT NUMBER 5e. TASK NUMBER 5f. WORK UNIT NUMBER 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION OUSD(P&R),Washington,DC,20301 REPORT NUMBER 9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSOR/MONITOR’S ACRONYM(S) 11. SPONSOR/MONITOR’S REPORT NUMBER(S) 12. DISTRIBUTION/AVAILABILITY STATEMENT Approved for public release; distribution unlimited 13. SUPPLEMENTARY NOTES Personnel and National Security: A Quantitative Approach (Unclass), 25-28 January 2010, Johns Hopkins University Applied Physics Laboratory, Laurel, Maryland 14. ABSTRACT 15. SUBJECT TERMS 16. SECURITY CLASSIFICATION OF: 17. LIMITATION OF 18. NUMBER 19a. NAME OF ABSTRACT OF PAGES RESPONSIBLE PERSON a. REPORT b. ABSTRACT c. THIS PAGE Same as 13 unclassified unclassified unclassified Report (SAR) Standard Form 298 (Rev. 8-98) Prescribed by ANSI Std Z39-18 Unclassified Resourcing the Workforce (cid:137) IS NOT just about “getting the money” (cid:137) Is about promoting Department’s larger objectives (cid:131) Delivering capabilities and readiness while (cid:131) Minimizing fiscal opportunity costs (cid:137) Total Force background: “mix” and cost “vectors” (cid:137) Sppecial challengge: entitlements ggrowth (cid:137) Balancing manpower demands with personnel supply (cid:137) Moving “Observed Outcomes” closer to “Desired Outcomes” Challenge: Balance Manpower Demand AND Personnel Supply 2 Unclassified Resourcing the Workforce: Not Just About “Getting Money” (cid:137) Department’s larger Total Force objectives must be promoted (cid:131) Delivering capabilities and readiness while (cid:131) MMiiniimiiziing ffiiscall opporttuniitty costts (cid:137) Facts of Life: (cid:131) WWoorrkkffoorrccee ccoossttss aanndd aassssoocciiaatteedd “ttaaiillss” iinnccrreeaassiinnggllyy uunnaaffffoorrddaabbllee (cid:190) Fiscal pressures will worsen (cid:190) Recapitalization needs increasingly compelling (cid:131) The AVF is the fundamental enabler of all our plans (cid:137) To “Resource the Workforce” you first need to know: (cid:131) What “it” really should be (cid:131) What “it” would really cost (cid:137) Knowing where we have been – a good start Challenge: Balance Manpower Demand AND Personnel Supply 3 Unclassified Total Force Strategy – focus on the right mix The DoD Topline and Personnel Costs (2007 Constant Dollars*) $700 4 Active Duty Military $600 DoD Topline 3 $500 ) s $400 n s o Billion 2 y (Milli $ ut 7 $300 D 000 e e 2 v cti A $200 Contracts for Services 1 Military Personnel Costs $100 Civilian Payroll $0 0 FY67 FY72 FY77 FY82 FY87 FY92 FY97 FY02 FY07 * Using the GDP Price Index from the Budget of the United States Government: Historical Tables Fiscal Year 2009 (Table 10.1) 4 Unclassified Defense Spending (Percent of DoD Topline) Increased Includes RDT&E, GWOT Procurement, MilCon, and Operations other O&M (excluding 100% CivPay & Service Contracts) Enacted Supplementals Non-Personnel Spending (FY01-FY07)* 80% Not all available Regan Era 68% of TOA for RReeccaappiittaalliizzaattiioonn recapitalization 60% Contracts for Services 50% of TOA 40% Military Personnel Costs 20% Civilian Payroll 0% FY67 FY72 FY77 FY82 FY87 FY92 FY97 FY02 FY07 * From FY08 GWOT Amendment, Department of Defense, October 2007 –less MilPers & DHP from enacted Supplementals (PL 110-28/5; 109-234/62/13; 108-106/11; 107-20) 5 Unclassified The Changing Composition of DoD Personnel FY67 FY87 FY07 “Ballpark” 52 47 59 Manpower Mix % % % 11 ▀Active Duty 7% 4 % 25 5% ▀ Reserve (FTE) 14 27 7% 22 24 $200 ▀Civilian %% % ▀▀Contractors* % %% %% $180 $160 Active Duty Military 3 $140 $120 ) s n o s illinel (Mi 2 $100 on$ Billio son $80 2007 r e P Civilians $$6600 1 $40 Contracts for Services RReesseerrvveess ((FFTTEEss)) $$20 0 $0 FY67 FY72 FY77 FY82 FY87 FY92 FY97 FY02 FY07 * Contract Manyear Equivalent (CME) based upon $175K FY07 Dollars additionally deflated proportionately to Civilian Per Capita costs 6 Unclassified Manpower Mix vs Manpower Costs FY67 FY87 FY07 Manpower 0.66 0.61 (millions) 11% 14% 0.67 23% 1.45 1.38 25% 3.38 1.16 2.17 46% 59% 52% 27% 0.71 ▀Active Duty** 05.%27 0.29 24% 0.21 ▀ Reserve (FTE) 7% 7% ▀ CCiviliaan TToottaall 55.88MM TToottaall 44.22MM TToottaall 33.00MM ▀ Contractor* Manpower ** Includes DHP, Retired Costs $47 Pay, & Family Housing $62 (excludes O&M training (2007$ billions) 24% 25% $116 & Reserve MilPers) $$9999 $113 35% $$113399 49% 41% *Contract Manyear 46% Equivalent (CME) based $49 $56 upon $175K FY07 Dollars additionally 24% 23% $59 deflated proportionately $5 $14 18% $20 to Civilian Per Capita Total $200B 3% Total $245B 6% Total $334B 6% costs Takeaways include: (cid:137) Active Military “per capita” costs increasing – everyone else too (cid:137)(cid:137) SSeerrvviiccee CCoonnttrraacctt ccoossttss nnooww aallmmoosstt eeqquuaall ttoo AAccttiivvee MMiilliittaarryy ccoossttss (cid:137) Capabilities & Productivity hard to capture “just from numbers” (cid:131) Complicates ROI decisions 7 Unclassified Entitlement Growth Driving Active Duty Costs 100% $110 $100 90% Active Duty Per NNoonn-BBaassiicc PPaayy CCaappiittaa****** $90 80% $80 s 70% st Civilian Per Capita** o C $$7700 nel 60% ** n ** o s rs $60 nd e a P s y 50% u r o a h Milit $50 $ T 7 f 4400%% 00 o 0 e $40 2 g ta Basic Pay* FY67 FY07 n e 30% c Non-Basic r 31% 59% $30 e Pay P Basic Pay 69% 41% 2200%% $20 Includes: Retired pay accruals; TRICARE for Life; BAH; 10% Subsistence; Incentive &Special pays; Allowances; $10 Separation Pays; Social Security Tax; PCS travel; & others 0% $0 FY67 FY72 FY77 FY82 FY87 FY92 FY97 FY02 FY07 **** Using the GDP Price Index from the Budget of the United States Government: Historical Tables Fiscal Year 2009 (Table 10.1) *** Military Personnel Costs divided by Active Duty Endstrength; MPC include MilPers (less Reserve), DHP, Family Housing, andRetired pay; does not include training (O&M) ** Civilian Pay divided by Civilian Full-time Equivalents (FTE) * Military Pay (Active and Reserve) divided by Military Personnel Costs (including Reserve) 8 UUnnccllaassssiiffiieedd Resourcing the Workforce: in context Desired Outcomes: “Deliver Readiness while Reducing Fiscal Opportunity Cost” Measured by manning rather than capability Feedback? Readiness Vacant billets Desired Observed Gap Workforce Planning Resourcing Personnel ((“RReeqquuiirreemmeennttss” AAllllooccaattiioonn Decisions Production Fiscal Determination) Desired Gap Observed DDeemmaanndd PPrrooggrraammmmiinngg PPrroodduuccttiioonn AAssssiiggnnmmeenntt ““OOpporttuniitty costts”” (“Determine Needs”) (“Fund Billets”) (“Grow”) (“Faces”) • Not Always • Unchallenged Executable • Pipelines rigid, flexibilities • Billets often: Assumptions • “True Costs” underutilized -vacant • Uncoordinated unknown • Long lead times -filled with the “wrong Demands • Uncoordinated • Unanticippated costs person” • FFiiscalllly UUniinfformedd ddeecciissiioonnss • “Instant gratification” • Total Force and • Overhead (e.g. anticipated by Technology often NOT students) not always Programmers optimized funded • Fundamental “sub- • Manpower considered a • Well-reasoned policy strategies” uncoordinated, “free” good or statues may e.g. accession, • Etc…. prevent achieving promotion, compensation, personnel objectives divestiture, training, etc •• EEttcc… Resourcing the Workforce: cannot be separated from larger Human Capital “Architecture” 9