The Cost of a Military Person-year

The Department of Defense strives to only use military personnel for military-essential tasks and has consistently recommended the civilianization of ever-more military functions and positions. This guidance also stems from the belief that military personnel cost more than comparable civilians. As a policy, civilianization can only be properly applied when it is an integral element of a broader personnel-management strategy. This work presents a new method of estimating the cost of a military person-year that focuses on the actual cost of the retirement benefits that the federal government must provide to military personal. It provides a better foundation for the development of a broad, force-shaping strategy than previously available measures that focused only on annual retirement-fund accrual costs. A major implication of this alternative calculus is that truly effective force management-using strategic human-resources principles to identify the proper mix of age and experience in the personnel inventory-requires an increased focus on the cost of personnel.