The Army National Guard exceeded its  goals in fiscal years 2006 and 2008 and fell within the allowable margin of  variance for meeting its goals in the other 2 fiscal years. The Army Has Almost Met Its Overall Growth Goal, and Two Components Have Exceeded Their Annual Goals under the Accelerated Growth Plan

By the end of fiscal year 2008, the Army as a whole had met 99 percent of  its overall growth goal, whereas it had initially planned to complete the  growth by fiscal year 2013 under the original Grow the Force plan and by  2010 under the accelerated plan. Since fiscal year 2005,  all three components have made steady progress toward meeting their  recruiting goals. The Army Has Dramatically Increased Bonus Expenditures but Does Not Use Available Research to Calculate the Most Cost-Effective Bonus Amounts

Since fiscal year 2005—the last year in which the Army failed to meet its  end-strength mission—it has dramatically increased expenditures for  enlistment and reenlistment bonuses. The Army Has Not Used Research to Calculate What Bonus Amounts Would Be Most Cost- Effective

While the Army has conducted extensive research on the use of cash and  other incentives such as choice of branch or graduate school, this research  has been focused on comparing different incentive plans. It has not been  directed at determining the most cost-effective bonus amounts. The Army Has Fallen Short of Its Quality Goals and Has Taken Steps to Expand Its Recruiting Market

The Army components have not consistently met their quality goals for the  percentage of new recruits who have high-school diplomas and who  score in the upper half on the AFQT. In fiscal year 2005, none of the Army’s  components met DOD’s 90 percent benchmark for recruits with high- school diplomas (see table 6). The Army Has Continued to Grant Conduct Waivers for New Recruits and Analyzes the Outcomes of Recruits Entering with Conduct Waivers

The Army has continued to grant conduct waivers to recruits who do not  meet some of the Army’s entrance standards for reasons such as prior  criminal misconduct. Initial analyses conducted by the Army and the RAND  Corporation have shown that, while those with conduct waivers tend to  perform as well as those without conduct waivers, they are more likely to  be separated for adverse reasons, such as behavioral issues.All of these  studies, however, examined accessions with waivers from fiscal years  2002 through 2007, years when, according to Army officials, the waiver  data were subject to certain data reliability problems, including the  overcounting of conduct waivers and the miscoding of some  misdemeanors as felonies. The Army Has Experienced Shortages of Captains, Majors, and Lieutenant Colonels

The Army’s efforts to grow the force have exacerbated preexisting  shortages in the officer corps, and the Army projects that some shortages  will continue until fiscal year 2018. An Army official  stated that the Army has not offered incentives to majors or lieutenant  colonels because officials do not believe there is a retention problem with  majors or lieutenant colonels. To determine the extent to which the Army is directing the growth in its  enlisted force to areas of most critical need, we obtained data from the  Army’s Office of the Assistant Secretary of the Army, Financial  Management and Comptroller, on how much the components spent on  enlistment and reenlistment bonuses given to Army recruits and soldiers  for fiscal years 2005 through 2008. Additionally, we obtained information on the numbers and  types of enlistment waivers granted by the active Army, the Army Reserve,  and the Army National Guard in fiscal years 2005 through 2008. To assess the extent to which the Army is directing the growth in its  officer force to areas of need and the extent to which it has determined  whether short-term tradeoffs to alleviate shortages will have long-term  effects on its officer corps, we analyzed various data related to officer  demand, strength levels, promotions, and retention.
Why GAO Did This Study

To ease the pace of overseas deployments, the President announced a plan in 2007 to grow the Army's end strength by about 7 percent by 2013. GAO was asked to evaluate the Army's management of this growth. Specifically, GAO determined the extent to which the Army has (1) made progress in growing the force, (2) awarded cost-effective bonuses to attract and retain enlistees, (3) maintained the quality of its enlisted force, and (4) directed growth in its officer force to areas of need and determined whether trade-offs it has made to alleviate shortages will have long-term effects. GAO reviewed the Army's growth plans, bonuses, waivers, and officer promotions, and interviewed Defense and Army officials.

What GAO Found

Although the Army's Grow the Force plan originally called for growth to be completed by fiscal year 2013, the Army had met 99 percent of this growth goal by the end of fiscal year 2008. Since fiscal year 2005, when none of the Army components met recruiting goals, all have made steady progress. To achieve this growth, the Army substantially increased its number of recruiters and its funding of incentives. In addition, the active Army and Army Reserve exceeded their retention goals from fiscal years 2005 through 2008; the Army National Guard exceeded its goals in fiscal years 2006 and 2008 and achieved retention within the allowable margin in fiscal years 2005 and 2007. While the Army has increased its expenditures for bonuses by almost 75 percent since fiscal year 2005, it has not used available research to set bonuses at dollar amounts that are most cost-effective. Although a substantial body of research exists on how to cost-effectively use recruiting resources, the Army has not used this research to calculate bonus amounts. During GAO's review, Army officials stated that the main proof of success of the bonus program was that the Army had met its goals for accessions and retention. Also, because Defense guidance allows the Army to offer bonuses to enlistees in any occupation, the Army has been able to award and often has awarded bonuses to occupations that are not considered priority. Further, because each component makes decisions on bonuses independently, the amounts of bonuses awarded by different components vary widely. Since GAO completed its audit work, the Army states, however, that it has been reducing the numbers and amounts of bonuses offered enlistees. In fiscal years 2005 through 2008, the Army did not consistently meet quality goals for new recruits, as measured by the percentage who have high-school diplomas and who score in the upper half on the Armed Forces Qualification Test. The Army implemented some new programs to increase the market of eligible recruits, such as programs for overweight individuals or those without high-school diplomas. In addition, the Army has continued to use conduct waivers for candidates who fall short of entrance standards for reasons such as prior criminal misconduct. Existing analyses have shown that recruits with conduct waivers perform similarly to those without conduct waivers-- although they are more likely to be separated for adverse reasons; the Army lacks data on the cost of enlisting persons who require conduct waivers. The Army is experiencing shortages of captains, majors, and lieutenant colonels and projects that these shortages will continue. The Army has offered bonuses to captains; however, it has not offered incentives to majors or lieutenant colonels because those ranks are not considered to have retention problems. While the Army has research focused on incentive packages, this research has not been directed at calculating the most cost-effective bonus amounts. Also, the Army has no method of determining whether actions it has taken that deviate from congressional benchmarks will have any effect on the future Army officer corps.