“Empowering Our Heroes: How the Quadrennial Review Enhances Military Pay Standards”

Every four years, the Department of Defense conducts a comprehensive examination of the principles and ideas surrounding the military remuneration system — the Quadrennial Review of Military Compensation. Apart from the DOD, this review also encompasses the Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, as well as the Public Health Service. 

The 14th QRMC released its findings today.

On January 31, 2023, President Joe Biden established the 14th QRMC. In this announcement, he emphasized our “sacred obligation to support our men and women in uniform;” “our service personnel deserve a modern military compensation system that acknowledges their contributions … and motivates the following generation of men and women to serve.” 

In pursuit of these aims, he tasked the 14th QRMC to explore five subjects, with the secretary of defense adding a sixth at the request of the commander of U.S. Special Operations Command and the chairman of the Joint Chiefs of Staff. 

“The objective of the QRMC is to guarantee that service members are compensated competitively with their civilian counterparts, ensuring they can meet life’s essentials, alongside a benefits package sufficiently attractive to recruit and retain the personnel DOD requires,” explained a senior defense official. 

“This is crucial because, based on long-standing research and lived experiences, we understand that when the department prioritizes the fundamental needs of its personnel and families, they can more effectively concentrate on their mission to protect the nation, which calls for a competitive pay structure, both to attract the next generation to serve, as well as to [retain] specific military skill sets,” stated the senior defense official. 

The QRMC is recognized as an independent entity with a director collaborating with federally funded research and development centers to carry out its analysis. They perform evaluations and present their findings to a senior advisory group. This group includes uniformed members, senior civilians, and senior enlisted advisors who have relevant knowledge and experience in pay and compensation matters. 

“The 14th QRMC determined that the department’s compensation offerings are highly competitive with the civilian job market. Nonetheless, there are certain areas for enhancement that will ultimately benefit service members, their families, and the department,” remark the senior defense official. 

The department has fully embraced these recommendations and will strive to implement them over the upcoming years, according to the official. 

This marks the first QRMC to assess the influence of dual-income households on military retention choices, including how military lifestyle factors, such as permanent change of station relocations, service separations, and access to childcare, affect a military spouse’s ability to pursue a career, according to the official. 

“This may compel us to consider adjustments to policy and programs related to compensation, as well as nonfinancial initiatives to guarantee effective recruitment, retention, and readiness of the force in the future,” the senior defense official indicated. 

In 2002, the 9th QRMC concluded that to attract the necessary service personnel, DOD should compensate them at the 70th percentile compared to similar civilians. This means that among 100 comparable civilians and service members of similar age and education, service members earn more than 69 of the 100 civilians on average. 

“This premium illustrates some of the distinct characteristics of military life,” a second senior defense official stated, highlighting challenges that civilians typically do not face. 

The 14th QRMC reviewed the standard military compensation for all ranks and proposed an increase to the 75th percentile, according to the second senior defense official. 

The 14th QRMC also suggested enhanced communication with service members and others concerning their overall compensation package, the second senior defense official noted. 

For instance, it is vital that DOD conveys to prospective recruits and current members that base pay constitutes just one aspect of military compensation. The compensation package encompasses benefits like free dental and health care, childcare incentives, a generous Thrift Savings Plan, a traditional retirement scheme, and an ample leave policy, affirmed the first senior defense official. 

“There are numerous components of the compensation package that members might overlook. … Our retention rates are notably high, so I believe that as members continue to serve, they gain a better understanding of the overall value of the full compensation package,” remarked the second senior defense official, adding that this could serve as an effective recruitment tool.

The three principal findings of the 14th QRMC are: 

• The military compensation structure is largely competitive with the civilian employment market.  
• Mitigating pay volatility and variability, in addition to enhancing data quality, will yield benefits for service members and the department; the QRMC has recommended improvements in data gathering and processing to enhance predictability regarding pay and compensation. 
• Targeted noncash compensation may offer more significant returns on investment for service members and military families than raises in basic pay and compensation. 

The eight recommendations of the 14th QRMC include: 

• Raising the standard military compensation benchmark from the 70th to the 75th percentile.   
• Enhancing communication with service members regarding their total compensation package and its relative quality compared to similar civilians. 
• Improving “constructive credit” provided to lateral entrants who join the military with existing and in-demand skill sets, such as surgeons. 
• Revising the methods used to calculate the basic allowance for housing. 
• Updating the process for calculating both contiguous United States and overseas cost-of-living adjustment rates. 
• Reviewing deployed entitlements on a five-year basis. 
• Exploring additional retirement savings options available for military spouses. 
• Establishing a regular review of quality of life or quality of service to evaluate areas like housing, health care, childcare initiatives, and Morale Welfare and Recreation programs. 

The report was submitted to the president and congressional armed services committees. It was also shared with interagency partners and military and veteran service agencies. The first senior defense official clarified that while some of the QRMC’s recommendations can be put into effect immediately, others may take several years to implement, and some will necessitate congressional backing for execution.