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Parliamentary Budget Office Defence Forces: Remuneration, Recruitment and Retention

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Parliamentary Budget Office Defence Forces: Remuneration, Recruitment and Retention An Oifig Buiséid Pharlaiminteach Parliamentary Budget Office Defence Forces: Remuneration, Recruitment and Retention Publication 30 of 2020 Séanadh Is í an Oifig Buiséid Pharlaiminteach (OBP) a d’ullmhaigh an doiciméad seo mar áis do Chomhaltaí Thithe an Oireachtais ina gcuid dualgas parlaiminteach. Ní bheartaítear é a bheith uileghabhálach ná críochnúil. Féadfaidh an OBP aon fhaisnéis atá ann a bhaint as nó a leasú aon tráth gan fógra roimh ré. Níl an OBP freagrach as aon tagairtí d’aon fhaisnéis atá á cothabháil ag tríú páirtithe nó naisc chuig aon fhaisnéis den sórt sin ná as ábhar aon fhaisnéise den sórt sin. Tá baill foirne an OBP ar fáil chun ábhar na bpáipéar seo a phlé le Comhaltaí agus lena gcuid foirne ach ní féidir leo dul i mbun plé leis an mórphobal nó le heagraíochtaí seachtracha. Disclaimer This document has been prepared by the Parliamentary Budget Office (PBO) for use by the Members of the Houses of the Oireachtas to aid them in their parliamentary duties. It is not intended to be either comprehensive or definitive. The PBO may remove, vary or amend any information contained therein at any time without prior notice. The PBO accepts no responsibility for any references or links to or the content of any information maintained by third parties. Staff of the PBO are available to discuss the contents of these papers with Members and their staff, but cannot enter into discussions with members of the general public or external organisations. Defence Forces: Remuneration, Recruitment and Retention Contents 1 Key Messages 4 Introduction 5 The Defence Forces and the Public Sector Pay Bill 6 Organisational Context 8 Turnover 2002-2017 12 The trend in overall departures 12 Rising Departures at Middle Management Level between 2002 and 2017 14 Career Progression in the Permanent Defence Forces 18 Enlisted Personnel and Non-Commissioned Officers 18 Commissioned Officers 20 Pay-Related Measures recommended by the Public Sector Pay Commission 22 Impact of Salary Scale increases and the Military Service Allowance 23 Privates and Non-Commissioned Officers 24 Commissioned Officers 26 Impact of Increases to Other Allowances 28 Combined Impact of the Pay-Related Measures 30 Conclusions 32 Appendix: Ranks Across Permanent Defence Force Branches 33 Defence Forces: Remuneration, Recruitment and Retention Recruitment Remuneration, Defence Forces: Defence Forces: Remuneration, Recruitment and Retention Figures Figure 1: Gross Voted Spending on Pay and Allowances for the Permanent Defence Force 6 Figure 2: Spending on Pay and Allowances for Members of the Permanent Defence Force as a share of total Gross Voted Spending on Pay 7 2 Figure 3: Turnover Rate in Irish Permanent Defence Forces and UK Armed Forces, 2013-2017 13 Figure 4: Defence Force Departures and the Unemployment Rate – 2002-2017 13 Figure 5: Correlation between Unemployment and Departures from the Defence Forces – in Total and in the First Five Years of Service, 2002-2017 14 Figure 6: Enlisted Departures from the Irish Defence Forces, 2002-2017 15 Figure 7: Departures from Army Middle Management and Privates, as a Share of Officer and Enlisted Strength, Respectively 15 Figure 8: Middle Management Departures from the Irish Defence Forces, 2002-2017 16 Figure 9: Departures of Captains from the Irish Defence Forces, 2002-2017 17 Figure 10: Comparison of Salary Scales for selected Defence Forces Grades 19 Figure 11: Cumulative Relative Impact of the Recommendations of the Public Service Pay Commission and the Pay Increases Promised under the Public Service Stability Agreement in 2019 and 2020 on Selected Salary and Military Service Allowance of Enlisted Ranks 24 Figure 12: Cumulative Relative Impact of the Recommendations of the Public Service Pay Commission and the Pay Increases Promised under the Public Service Stability Agreement in 2019 and 2020 on Salary and Military Service Allowance Pay of Selected Commissioned Officer Ranks 27 Figure 13: Combined Indicative Impact of PSSA and PSPC on Salary, Military Service Allowance and Security Duty Allowance 31 Defence Forces: Remuneration, Recruitment and Retention Recruitment Remuneration, Defence Forces: Defence Forces: Remuneration, Recruitment and Retention Boxes Box 1: Pay for Recruits, Privates and Ordinary Seamen 10 Box 2: Military Pay Calculation 21 3 Tables Table 1: Percentage Change in Basic Pay and Military Service Allowance for 3-Star Private and Equivalent Ranks, 2011-2017 10 Table 2: Indicative Pay Calculation Examples w/e from 1 September, 2019 21 Table 3: Amount in Euros Paid in Allowances Reduced by the HRA and Number of Employees Paid 29 Table 4: Estimated Impact of Restoration of Patrol Duty, Security Duty and Overseas Support Allowances based on 2018 Levels 30 Defence Forces: Remuneration, Recruitment and Retention Recruitment Remuneration, Defence Forces: Defence Forces: Remuneration, Recruitment and Retention Key Messages 4 n Departures from the Irish Defence Forces within the first five years (from enlistment) exhibit a strong relationship with the national unemployment rate, while departures in total do not. This suggests that while departures within the first five years are closely related to labour market conditions, this may not be the driving factor for longer-serving members. n There has been an upward trend in departures at Captain level since 2009 that has followed domestic economic growth closely. n Despite the upward trend in departures, the staffing complement at Captain level is stable, as the workforce planning system for the Defence Forces facilitates the filling of the vacancies created by these departures. n Career progression, in both enlisted and commissioned ranks, is dependent on completion of training courses and is generally not open to public competitions. This means that retention issues at higher grades, and among training instructors places increased pressure upon the career progression system. n Reform of the recruitment system may therefore be necessary to alleviate bottlenecks in the current system when replacing officers departing prior to their retirement age. n Including the latest increase in pay (from 1 January 2020), the Public Service Stability Agreement and the Public Service Pay Commission recommendations will result in increases in total remuneration of: l 5.6% to 6.3% for 3-Star Privates; l 5.5% for Corporals; l 4% for Sergeants; l 5.8% to 5.4% (decreasing as the salary scale ascends) for Lieutenants; l 5.3% to 5.0% for Captains; l 5.1% to 4.8% for Commandants; l 4.8% to 4.7% for Lt. Colonels; and, l 4.7% to 4.5% for Colonels. n Due to limitations on the remit of the Pay Commission, it is not clear that the measures proposed by the Public Service Pay Commission would address the areas of most concern (e.g. the specific retention problems at certain specialist technical personnel in a targeted fashion. Further measures, such as those outlined in Phase One of the Strengthening Our Defence Forces plan, may be required to address retention problems Defence Forces: Remuneration, Recruitment and Retention Recruitment Remuneration, Defence Forces: for those specific areas. Defence Forces: Remuneration, Recruitment and Retention Introduction 5 The recruitment, retention and remuneration of members of the Defence Forces has been an issue of extensive public and parliamentary debate. In the 32nd Dáil, Defence Forces remuneration was the subject of at least 820 Parliamentary Questions. In addition, recruitment and retention was the subject of a specific module of the work of the Public Service Pay Commission. The Irish Defence Forces are made up of three branches: Army, Naval Service and Air Corps. The ‘Establishment’ is the size of the Defence Forces that the Government has committed to maintaining, and this is set at 9,500 personnel, made up of 7,520, 1,094 and 886 in each of the three branches respectively. At the end of 2018, the strength of the Defence Forces was 8,957 whole-time equivalents (WTEs), with 7,243, 989 and 725 in each branch respectively. In this paper, the Parliamentary Budget Office (PBO) will set out the organisational context relevant to these discussions and will review the impact of the existing Public Service Stability Agreement and the recommendations of the Public Service Pay Commission on the pay of members of the Defence Forces. To give further context, the PBO will also consider the historical trends in departures from the Defence Forces (using data submitted to the Pay Commission) and the career progression system that exists within the Defence Forces. This paper is laid out as follows: n Firstly, we outline the organisational context of the current situation in the Defence Forces, including the reductions and restorations of pay and allowances; n Secondly, we review Defence Forces departure data between 2002 and 2017, and then review trends in levels of departures at different ranks; n Next, the paper reviews the nature of career progression in the Defence Forces; and, n Finally, we examine the impact of the Public Service Stability Agreement and the Public Service Pay Commission’s recommendations on the pay and allowances of members of the Defence Forces. Defence Forces: Remuneration, Recruitment and Retention Recruitment Remuneration, Defence Forces: Defence Forces: Remuneration, Recruitment and Retention The Defence Forces and the Public Sector Pay Bill 6 Throughout this paper, we will present statistics that cover Defence Forces personnel in the period 2002-2017. This is the time period chosen because it is covered by the data provided in the Employer’s Submission to the Public Service Pay Commission, but it also makes a logical timeframe to cover as it provides a long-run view of staffing in the Defence Forces, and covers a period of significant change both for the Defence Forces and the country. Before discussing the Defence Forces in detail, it is worthwhile to discuss the overall public sector pay bill, the pay bill for the Defence Forces and the position of the latter within the former.
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