Part 5: Managing military attrition

5.1
In this Part, we discuss NZDF's efforts to reduce attrition in the Air Force, Army, and Navy and to understand the causes of attrition.

Progress in reducing attrition

By 30 June 2008, attrition in the Army had decreased by about 4%, and increased in the Air Force by about 1%, and in the Navy by about 4%. Most personnel received pay increases of between 10% and 12% during the foundations phase. NZDF believes that its new remuneration strategy is reducing attrition.

5.2
Personnel numbers can increase by recruiting more personnel and retaining more of the personnel who are enlisted. Nonetheless, some attrition is desirable. For example, vacancies in the higher ranks provide opportunities for promotion for suitably qualified personnel in lower ranks. However, attrition that occurs at the wrong time or that is too high causes problems for NZDF.

5.3
NZDF expected attrition to decrease during the foundations phase.

5.4
We compared attrition rates for 2004/05 (the year before the foundations phase started) with attrition rates for 2007/08 (the last year of the foundations phase):

• The Air Force's attrition rate increased from about 9% to about 10%.
• The Army's attrition rate decreased from about 19% to about 15%.
• The Navy's attrition rate increased from about 13% to about 17%.¹

5.5
Trained military personnel who have leadership experience are often able to get higher-paid employment outside NZDF. NZDF knew that matters relating to pay were affecting attrition. Therefore, as part of the Initiative, NZDF introduced a new military remuneration strategy in July 2008. NZDF had planned to complete the strategy's implementation by 30 June 2009. The strategy's purpose is to recruit the right people and to keep skilled and committed personnel, which includes producing a fair and equitable pay system.

5.6
During the foundations phase, most personnel received pay increases of between 10% and 12% (the range was from 0.5% to about 15%). NZDF believes that the new remuneration strategy is reducing attrition. NZDF recognises that the wider economic situation is also helping retention.

Understanding the causes of attrition

In 2008, the Air Force and Navy commissioned detailed studies to find out why personnel stay or resign. The studies identified a broad range of reasons that affect attrition. We consider that the Army should commission a similar study.

5.7
The Air Force, Army, and Navy conduct exit interviews to find out why personnel resign. Most personnel who leave before completing their term of service are interviewed.

5.8
In 2008, the Air Force and Navy decided that they needed to explore the reasons for attrition in more depth. They commissioned private providers to carry out detailed studies to identify the precise causes of attrition and the actions that would encourage personnel to stay longer.

5.9
The Air Force found that the top five areas of concern were:

• career development and management;
• workload and work-life balance;
• leadership and command;
• pay and remuneration; and
• housing and accommodation.

5.10
The Navy found that the top five areas of concern were:

• workload, stress, and resilience;
• pay and remuneration;
• balancing home and family with Navy demands;
• career opportunities and management; and
• housing and living environments.

5.11
Because of these surveys' findings, some smaller studies are planned. For example, the Air Force will survey the civilian partners of uniformed personnel to discover their views.

5.12
The studies' reports included recommendations for improvements. Actions to carry out the recommendations will take place over the short term, medium term, and long term.

5.13
The Air Force and Navy studies have shown that the causes of attrition involve matters other than pay. We suggest that the Army would benefit from commissioning similar research to identify reasons for attrition.²

5.14
We recognise that the:

• Army met its personnel targets for the foundations phase (see Part 4);
• Army's higher deployment rate (see Part 2) was the main reason it was not able to improve its ability to prepare for potential new deployments (see Part 3); and
• Army reduced its attrition rate during the foundations phase (see paragraph 5.4).

5.15
NZDF expects, and we agree, that it might be able to improve its ability to quantify the effects of individual deployments as its performance management systems mature. However, quantifying the effects of deployments after the event is different from being able to forecast the effects of a new deployment with enough confidence to, for example, schedule intakes of recruits. We accept that NZDF may never be able to accurately forecast the effects of individual deployments on retention and capability.

1: We asked NZDF to update these figures. Attrition rates at 30 June 2009 had improved since 30 June 2008. Attrition rates in the Air Force and Army were below the 30 June 2005 rates. The Air Force's attrition rate had decreased from about 10% to about 6%. The Army's attrition rate had decreased from about 15% to about 12%. The Navy's attrition rate had decreased from about 17% to about 14%. NZDF's annualised attrition in 2009 was about 11%, which was about 3% less than in 2008. NZDF attributed the decreased attrition to the combined effects of the remuneration project and the economic environment.

2: We note that, in March 2008, the Army asked children of deployed soldiers to contact NZDF if they were interested in taking part in research designed to provide effective resources for families who will experience a deployment. This should be a useful project, but will not cover the same areas as those covered by the studies the Air Force and Navy commissioned in 2008.