The Impact of Family-Friendly Compensation

Abstract

This research examines the structure of the military labor market and the potential consequences of using family-friendly compensation practices to address recruiting and retention concerns. The limited opportunities for lateral entry into the military lead human resource managers to fill leadership positions from within. Dynamic considerations force recruiters to focus on young high school graduates and emphasize the benefits of a career in military service, which include an allowance system that rewards family status. Controlling for important demographic characteristics, military personnel are more likely to be married and have children than their civilian counterparts. The implications of this finding depend on the costs of family support programs and differences in performance between soldiers with and without dependents. This case highlights the difficulties that arise when government organizations are forced to compete with the private sector for labor and use social incentives as a means to attract persons into public service.