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The U.S. Army: A Business? Return on Investment?
The U.S. Army: A Business? Return on Investment?
 

About the Author

Lieutenant Colonel David L. Thomas II is a Field Artillery Officer with over 25 years Active and Reserve Service. He served as a Battery Commander during Desert Shield/Storm and is also an Operation Enduring Freedom Veteran after being recalled to active duty in February 2003. He has served nine months in Afghanistan as the Director of Information Operations, and is currently assigned to Fort Benning, Georgia to work as a Special Projects Officer for the Army Substance Abuse Program (ASAP). LTC Thomas promotes ASAP's services as well as educates Soldiers and Leaders on the military readiness impacts of substance abuse.


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December 3, 2004

By LtCol David L. Thomas II

Is the U.S. Army a business? Technically, yes! How so, you might ask? The Army is basically a business: a business of the United States of America. They have a budget, personnel, equipment, etc., just like a private sector business. The Army has to manage time, people and resources, and nowhere is this more evident than in the multiple missions the Army is responsible for all over the world. How does the Army plan, organize, set priorities, conduct operations, develop workforce and workload projections, and conduct all of those other necessary missions? The previous words I used are similar, if not the same, as those used in the business sector. Why? What you read may just surprise you.

Afghanistan, Iraq, and Bosnia, are just a few of the places that American servicemembers are deployed, fighting or contributing to the fight on terrorism. When you think about it, the Army is acting like a multinational corporation. We have bases (offices) located all over the world. Some are temporary (Iraq and Afghanistan, hopefully), and some permanent (Romania and Uzbekistan). We also have people all over the world, just like a multinational company. While we may not be selling a product, we do in effect provide a service called "Freedom."

Just like any business sector company/corporation, the Army has to get a return on investment (ROI in the business sector) for each Soldier it brings into the Army and trains to do a particular MOS (job/position in business terminology). Other branches, the Coast Guard, Navy, Air Force, and Marines also have to get an ROI for their new military members. What does ROI have to do with the military? Isn't that a business problem? Yes, but it is also a military problem. Just like the business sector, companies experience turnover (retainability in military terms to an Army Recruiter or Re-enlistment NCO).

Consider this -- the Army spends approximately $35,000-$50,000 to train a new recruit from the time the individual walks into a recruiter station until he reaches his first duty station, depending on if he goes to Basic Training, Advanced Individual Training or if he goes to One Station Unit Training. This cost represents costs from the U.S. Army Recruiting Command, U.S. Military Entrance Processing Command, and the U.S. Training and Doctrine Command.

If the Soldier does not perform as expected, he/she has not met the expectations the Army has established for the particular Soldier and the ROI on the Soldier has been lost or severely diminished. If the Soldier leaves (quits, get fired, laid off in the business sector) the ROI is not realized. Additionally, the ROI becomes more important and more expensive because an additional individual must be recruited and trained, causing gaps in critical positions or MOS's.

What are the causes of the ROI not being recouped by the Army? Some of the significant causes that might cause the Army to lose or diminish their investment in the Soldier are preventable. When a Soldier gets a DUI, he/she has diminished the ROI, retainability, and benefit to the Army. When a Soldier shows up positive on a drug screen, he/she has diminished the ROI and retainability to the Army. When a Soldier hits their spouse/children and is charged with domestic violence, the ROI costs are twofold, including the ability to retain this Soldier. First, the Soldier is charged and punished and may not be "retainable." Additionally, the Soldier may be precluded from having access to weapons, which is a basic requirement of being a Soldier, and may have to be put into a different MOS (position/job) because he/she cannot legally have access to a weapon -- yes, military weapons as well as personal -- because they were charged with domestic violence.

So the military spends approximately $50,000 to train a soldier and get him/her to their first duty station. This process also has a cost associated with it that many do not think about. The cost is time. It takes anywhere from 6-9 months and sometimes longer to get the Soldier properly trained and to that first duty station where he/she become proficient in the MOS that they are supposed to perform. Those 6-9 months can be very costly for the Army. Not only are they without that individual, there may be a cost in terms of human lives, which is something many "business sector" companies do not have to deal with.

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