The Effects of Shore Billets on FCA Retention and Promotion

1
The Effects of Shore Billets on FC(A) Retention
and Promotion
Dr. Albert Monroe CNA Corporation
6 May 2008
2
Background

• In the past, Navy aggressively protected
  sea-shore rotation
• Led to severe constraints on reducing shore
  billets
• Over the last few years, Navy has reduced shore
  billets without regard to sea-shore rotation
• As a result, FC(A) community has been adversely
  affected
• FC(A) Sailors very important because they control
  Aegis system, which defends surface ships from
  missile threats

3
FC(AEGIS) Pay Grade Structure
Mar 07 Force Structure Billets
Mar 07 Force Structure Inventory
Total Sea Inv/BA
Total Inventory 1913
Total Billets 2085
Total Sea Inventory 1219 Total Shore Inventory
596 IA Inventory 98
40 N/A 108 83 72 77
N/A
Total Sea Billets 1519 Total Shore Billets
428 IA Billets 138
Current Manning Total 91.8 Sea
80.3 Shore 139.3 IA -- 71.0
Source Dig Dashboard
Source Dig Dashboard
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The FC(A) Community Needed to Address Shortage of
Shore Billets

• Not enough shore billets in the Aegis Fire
  Controlman (FC(A)) community
• Shortage of shore billets caused shortage in
  total FC(A) billets
• Flawed demand signal for FC(A) sailors caused
  Navy to recruit and retain fewer FC(A) sailors
• Not enough sailors leads to shortages at sea
• More shore billets leads to correct FC(A) demand
  signal
• Navy then needed to decide which shore billets to
  add to FC(A) community
• Many shore billets are nontechnical and outside
  of FC community
• Shore billets specific to FC(A) skills
  (instructors, maintenance, etc.) add to skill
  level of FC(A) sailors
• Nontechnical billets (recruiting, facilities
  maintenance, etc.) might degrade skill levels and
  decrease retention

5
How Should the FC(A) Community Decide What
Billets to Add?

• Shore billets to be added a combination of two
  factors
• Cost
• Readiness
• Use of monetary and nonmonetary incentives for
  sea duty can reduce the number of shore billets
  that the Navy needs to add
• Incentives to lengthen sea tours
• Incentives to rotate early back to sea
• Geographic stability in exchange for shorter
  shore tours

6
Estimating the Cost and Readiness Effects of
FC(A) Shore Billets

• Shore billet quality may have large effects on
  the FC(A) community
• Cost
• Readiness
• Measuring readiness is difficult
• Ideally, we would measure readiness directly
  (exercises, etc.)
• Must measure readiness indirectly since direct
  measures dont exist
• Relative promotion probabilities for those
  serving in different types of shore billets
• Measuring costs is easier
• Retention (SRB cost of retaining sailors)
• Extra cost to remilitarize billets now contracted
  out

7
Regression Design

• Wish to measure effects of different types of
  shore billets on outcomes
• Retention (retained to 123 months)
• Promotion (advanced to E-6 by 109 months)
• Types of shore billets
• Instructor
• Other in-skill, technical
• Recruiter
• Other non-technical, CONUS
• Other non-technical, OCONUS
• Other variables to control for other factors
  involving retention and promotion
• Probit regressions

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Regression Results Promotion - Probit

• Dependent variable promotion to E-6 by 109
  months
• Marginal values from probit regression (in
  percentage points, relative to Other CONUS)
  (Standard errors in parentheses)
• High-skill instructor 17.8 (5.9)
• Other instructor 15.1 (7.2)
• Other high-skill not significant
• Recruiter 13.5 (6.7)
• Other OCONUS not significant
• Other CONUS (omitted)
• Significant () top 10 to E-4, higher AFQT
  score, length of first sea tour

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Regression Results Retention - Probit

• Dependent variable retention to 123 months
• Marginal values from probit regression (in
  percentage points, relative to Other CONUS)
  (Standard errors in parentheses)
• High-skill instructor not significant
• Other instructor 23.1 (6.4)
• Other high-skill not significant
• Recruiter 20.8 (6.3)
• Other OCONUS 28.8 (7.9)
• Other CONUS (omitted)
• Significant () Black, Top 10 to E-4, age 23-25
  at accession, became a parent, length of first
  sea tour
• Significant (-) Age 20-22 at accession

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Controlling for Simultaneity

• Promotion and retention may be simultaneously
  determined
• Promotion prospects may affect retention
• Cannot promote if you dont retain
• We used binomial probit regression with selection
  to control for simultaneity
• Need variable that is correlated with retention
  but not with promotion
• Used average home state unemployment rate between
  102 and 105 months of service
• Window in data between 105 and 123 months when
  many FC(A) Sailors leave Navy
• Excluded Sailors that left before 105 months
• Poor correlation of error terms suggested that
  original probit regressions were valid

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Results Summary

• Out-of-skill, non-recruiter billets bad for FC(A)
  retention and promotion
• Recruiter billets and non-FC instructor billets
  correlated with higher FC(A) retention and
  promotion
• High-skill instructor billets correlated with
  higher promotion, but not retention
• High-skill non-instructor billets not associated
  with higher retention or promotion

12
Conclusions and Recommendations

• Effect of FC(A) shore billets on retention is
  unclear
• Billet types showing highest retention represent
  less than 25 of total billets
• Those serving in recruiter, non-FC instructor,
  and OCONUS billets may have higher retention due
  to self-selection
• Instructor and recruiter billets (but not other
  in-skill FC(A) billets) may lead to higher
  promotion rates
• We recommend a mixed strategy
• Remilitarize instructor shore billets when
  possible
• Continue to aggressive pursue sea duty incentives
• Navy should allow willing FC(A) sailors to serve
  in recruiter, OCONUS, or non-FC instructor billets

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Questions?
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Backup Slides
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Memo on Shore Billets, Retention, and Promotion

• 1998 CNA paper on cost of outsourcing in-skill
  shore billets found that Sailors who served in
  in-skill billets were more likely to
• Retain to 109 months
• Advance to E-6 by 109 months
• Advancement and retention effects were larger for
  higher-skill sailors
• For FC Sailors
• Instructors
• 9.7 percentage points (pp) more likely to retain
  to 109 months
• 20.9 pp more likely to advance to E-6 by 109
  months
• Other in-skill billets
• No effect on retention
• 11.9 pp more likely to advance to E-6

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Memo on SDIP and Differential SRB

• Navy proposing 500/month SDIP to get FC(A)
  Sailors and others in very sea-intensive ratings
  to extend sea tours
• Targeted for FC(A) E-5 shortages at sea
• No real precedent for large sea pay incentives
  after five-year sea tour
• SDIP likely to be more cost-effective than
  recruiting more FC(A) Sailors
• High cost to train FC(A) Sailors
• High cost of maintaining extra FC(A) Sailors at
  lower pay grades
• Additional cost savings from civilianizing shore
  billet
• Navy should study effects of SDIP before
  increasing incentives further with Differential
  SRB

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Key Summary Statistics - Retention

• 602 observations
• 59.3 retention to 123 months in-sample
• Division between shore billet categories
• High-skill instructor 18.1
• Other instructor 9.3
• Other high-skill 31.4
• Recruiter 11.8
• Other OCONUS 2.8
• Other CONUS 26.6
• Large categories Other CONUS, High-skill
  instructor, other high-skill
• Small categories Other instructor, Recruiter,
  Other OCONUS

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Key Summary Statistics - Promotion

• 650 observations
• 55.8 promotion to E-6 by 109 months in-sample
• Division between shore billet categories
• High-skill instructor 16.9
• Other instructor 9.5
• Other high-skill 27.5
• Recruiter 11.4
• Other OCONUS 2.0
• Other CONUS 32.7
• Large categories Other CONUS, High-skill
  instructor, other high-skill
• Small categories Other instructor, Recruiter,
  Other OCONUS

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Control Variables

• Demographic variables
• Sex
• Race
• Marital status/dependents
• Change in marital status/dependents
• Age
• Recruit Quality
• AFQT score/high school diploma
• Percentile of speed of advancement to E-4
• Other variables
• Fiscal year
• Length of first shore tour

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Sample Selection Criteria

• Fiscal Years of Accession
• 1986-1996 for retention regressions
• 1986-1997 for promotion regressions
• Uninterrupted service
• Served shore tour after sea tour after FC(A)
  qualification
• Retain to 73 months of service
• Other criteria (retention)
• FC(A) qualified within four years of service
• Other criteria (promotion)
• FC(A) qualified within three years of service
• E-5 within 73 months of service

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Regression Results Bivariate Probit

• Dependent variables promotion to E-6 by 109
  months, retention to 123 months
• Home state unemployment rate from 102-105 months
  of service used to separate effects of retention
  and promotion
• Very weak correlation between regression error
  terms
• Suggests that original results of probit
  regressions are valid

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Notes on Retention Results

• With 602 observations, regressions have low power
• Need retention effect of about nine percentage
  points to be statistically significant
• Small but real effects, say 6-7 percentage points
  would not be statistically significant
• Effects sensitive to sample inclusion
• We excluded FC(A) Sailors who started shore tours
  after serving sea tours as FC(A), but did not
  complete 73 months of service
• Over 90 of those Sailors were stashed in Other
  CONUS billets, probably anticipating their exit
  from the Navy
• Including these Sailors increases difference in
  retention between Other CONUS Sailors and all
  others
• Placing Sailors in high-skill instructor billets
  increases their career prospects both inside and
  outside of the Navy, making expected retention
  effects unclear

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Contributors to FC(A) Shore Billet Shortage

• Historic training system decisions contributing
  to problem
• FY-98 capped FC(A) instructor billets
• despite continuing growth in sea billets with new
  construction.
• RiT (2002-2006) - replace some existing
  instructor billets with civilians, contractors
  and technology.
• No separate treatment for FC(A)
• No I-level maintenance for Aegis systems
• All contracted out, giving the benefits of
  maintenance experience to people that will not
  return to sea duty.
• All have potential for affecting technical
  expertise average for sailors returning to sea
  from shore duty.

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FC (AEGIS) vs. NavywideSea Shore Billet Ratio
SSR
Current FC(AEGIS) Sea/Shore Tour Lengths
E3 E4 E5 E6 E7 E8 E9 Sea
N/A 60 60 54 39 39 39 Shore N/A 24
36 36 36 36 36
FC3 sea tour length increased from 54 months to
60 months in May 06
1.33