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The dynamic retention model (DRM) is a state-of-the-art modeling capability that supports decisionmaking about workforce management policy. The DRM can be applied in a wide variety of workforce contexts for a variety of compensation and personnel policies, though to date the focus has been on supporting military compensation decisions to sustain the all-volunteer force in the United States. While the DRM is an extremely powerful tool, a drawback in the use of the model to date is that it has focused on the steady state. That is, implementations of the model to date show only the retention and cost effects of alternative policies when the entire workforce is under the new policy versus when the workforce is under existing policy. The research presented in this report extends DRM to allow simulations of the effects of alternative policies both in the steady state and in the transition to the steady state. It also shows the effects of alternative implementation strategies and how different policies can affect how quickly the population and costs move toward the new steady state.

Key Findings

The Capability to Analyze the Transition to a New Steady State Using the Dynamic Retention Model Approach Represents a Major Step Forward in the Analytical Tool Kit Available to Researchers Concerned with Workforce Management Policy

The New Capability Has the Potential to Be Applied to a Wide Variety of Personnel and Compensation Policies as Well as to Workforces Other Than Active Duty Personnel in the Military

The Capability Is Already Being Applied by Related RAND Projects

  • Our analysis suggests that grandfathering with choice is an implementation strategy that should be given serious consideration if compensation reform is pursued in the future. The approach of grandfathering all members but allowing switching has a number of advantages.
  • First, it would clearly make existing members better off to the extent that those who would prefer the new system can switch and those who prefer the existing system can remain with it.
  • Second, as a voluntary system, it is consistent with the choice-based system that is the foundation of the all-volunteer force.
  • Third, it offers a compromise between the two extreme implementation approaches. It allows the new steady state and associated cost savings to be realized sooner than 30 years while still affording the protection to current members that would occur under a grandfathering policy with no voluntary switching.

Table of Contents

  • Section One

    Introduction

  • Section Two

    Extending the DRM to Incorporate the Transition Period

  • Section Three

    Application to Military Retirement Reform

  • Section Four

    Concluding Thoughts

  • Appendix

    Additional Model Results Related to Retention Effects

The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted within the RAND National Defense Research Institute, a federally funded research and development center sponsored by OSD, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

This report is part of the RAND Corporation research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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