In two weeks, the Army National Guard will terminate all reenlistment bonuses after far exceeding retention goals, Military.com has learned.
The bonuses will stop July 1, according to a National Guard Bureau memo given to states and obtained by Military.com. Soldiers must extend their contracts before then in order to secure a bonus. Many soldiers reaching the end of a contract are offered a financial incentive, typically ranging from $3,000 to $20,000, to continue their time in the military. The amount depends on the individual's rank, the demand for their military job, and how many additional years the soldier adds to their contract.
"This was a difficult, but necessary, decision to help mitigate current funding shortfalls," a spokesman with the National Guard said to Military.com in a statement. "We are mindful of the value the incentives program has on retaining quality soldiers in our formations and will continue to analyze the best approach and optimal timing for resumption of the retention bonus program."
The spokesman added that the Guard wants to bring retention bonuses back next fiscal year, which starts in October. The funding shortage, he said, has no impact on recruiting bonuses, which are financial incentives given to individuals who initially enlist. Retention bonuses for the Air National Guard will not be interrupted.
The Guard already exceeded its retention requirements this year, with leaders hailing soldiers' pride in their support of COVID-19 relief and vaccination efforts as a factor. But large bonuses paid to troops also played a role in retention success, the Guard spokesman said. Because of the aggressive retention program, a lot of money was spent quickly.
"Our successful retention program centered on a very competitive retention bonus structure," he said. "As a result of that success, related expenditures are unsustainable, so we had to make the difficult decision to suspend it."
Data from the Guard provided to Military.com suggests that terminating retention bonuses is mostly due to a more than anticipated volume of soldiers wanting to stay in the force. Because soldiers appear eager to continue serving, the Guard may not see the need to hand out generous checks.
In 2019, the Army Guard achieved 103% of its retention goals, meaning more soldiers extended their contracts than the force was aiming for. In 2020, 102% of soldiers whose contracts were expiring decided to stay in, and as of last month, the Guard has achieved 119% of its retention goals for this year. It is unclear how much bonuses are a motivating factor for soldiers to commit to more time in service.
This comes as the Army Guard faces potential cuts to its end strength. There are currently 336,500 soldiers serving in the Guard, according to Defense Department data. However, President Joe Biden’s funding proposal for 2022 calls for a slight reduction of 500 troops. Lawmakers are still negotiating the details, though, and the budget is far from final.
Top leaders touted 2020 as the "Year of the Guard." The force has arguably been the most high-profile element of the Defense Department over the past 15 months, juggling overseas deployments and domestic missions including securing the U.S. Capitol for months after the Jan. 6 pro-Trump insurrection; responding to numerous protests and natural disasters; and playing a key role in the nation's pandemic relief efforts.
National Guard troops are mostly part-time soldiers who have to maintain civilian careers. Some are already concerned about the impact of halting bonuses for several months.
"We are working our tails off, and the potential for receiving retention bonuses could represent a life-changing benefit for our soldiers," a National Guard lieutenant colonel told Military.com on condition of anonymity. "Tricare Reserve Select is great, but it's not remotely enough to retain a young person that has selflessly sacrificed throughout their enlistment period."
Staff Sgt. Greg Johnson, who serves in the Indiana National Guard and recently oversaw company-level retention efforts, said he believes retention incentives are a great way to thank a soldier for their continued service. But, he added, he isn't sure a few thousand dollars will influence the decision to stay in the Guard or leave for many soldiers. Rather, he said, they want a predictable military schedule and more career opportunities.
"I really don't think it makes too much of an impact," Johnson told Military.com. "It's nice, and people won't say no to it. But I also don't think it's the make it or break it incentive. Most people at my unit, so very anecdotal, wanted a more set drill schedule, opportunities for schools, and new [military occupational specialties]."
-- Steve Beynon can be reached at Steve.Beynon@military.com. Follow him on Twitter @StevenBeynon.