Reinventing Army Recruiting

James A. Knowles Greg H. Parlier Gregory C. Hoscheit Rick Ayer Kevin Lyman Robert Fancher
Program Analysis and Evaluation, United States Army Recruiting Command, 1307 Third Street, Fort Knox, Kentucky 40121 james.knowles@carlisle.army.mil parlier@usarec.army.mil

Imminent catastrophic failure was the mantra as manpower shortfalls were becoming a constraint on the armys ability to support national strategy. The United States Army Recruiting Command (USAREC) reinvented recruiting by developing a Contract Forward methodologya hybrid between a just-in-time and an inventory-based system. This methodology enabled the organization to better support national military security obligations while increasing military recruiting production by 17.5 percent and to completely eliminate a forecasted decit. USAREC had cost-efciency savings of $204 million out of a $1 billion program (20 percent savings). (Military: personnel. Organizational Studies: personnel.)

y the spring of 1999, it was apparent that the United States Army Recruiting Command (USAREC) faced sustained, increasing failure. By years end, the organization was 6,300 personnel short of the annual required number of regular army (RA) enlisted soldier accessions (new soldiers). The scal year (FY) 2000 forecast projected a further shortfall of 17,500 accessions22 percent of the FY 2000 annual accession requirement. Furthermore, those applicants USAREC managed to recruit and place in its traditional inventory-delivery system, known as the Delayed Entry Program (DEP), were dropping out in record numbers. Fiscal year 1999 had a 20 percent attrition rate, equivalent to 15,800 annual DEP losses. Army recruiting faced imminent catastrophic failure, and the projected FY 2000 manpower shortfalls were quickly becoming a binding constraint on the armys ability to support the United States national security strategy. In his testimony before the Senate in March 2000, the chief of staff of the army, General Eric Shinseki, stated the need for a larger army end strength to tackle the military tasks imposed by the current national strategy:
Ive got to go and x my recruiting challenge. We came up short last year . . . its hard for me to make an argument for more end strength even though the analysis makes that case,

if I cant demonstrate we can recruit (Hauk and Parlier 2000, p. 80).

Despite its problems, USAREC completed FY 2000 with all enlistment goals achieved. Recruiting production increased by 17.5 percent, and the organization lowered the DEP loss by four percent, increasing annual production by 12,000 new soldiers over the previous year (FY 1999). By eliminating the forecasted FY 2000 recruiting decit, USAREC saved an estimated $204 million out of a $1 billion program (20 percent savings). How did army recruiting go from imminent catastrophic failure to success in 12 months?

The Importance of Recruiting to National Security

Manning the force is an integral part of the United States national security plan. The worldwide demands for military presence have increasingly put pressure on all of the military services (army, navy, air force, and marines) active, reserve, and national guard components to maintain their congressionally mandated personnel strengths. However, for all of the services, recruiting success depends on economic conditions and available resources (funding, manpower, and infrastructure)with success occurring when economic
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conditions are deteriorating or the services recruiting resources are in a satisfactory state (Gilroy and Sellman 1995, p. 62). Basically, when unemployment is high and the recruiting elements have enough resources, meeting annual recruiting objectives is easier. Such conditions prevailed between 1980 and 1985 when the United States had a high average unemployment rate of 8.1 percent for people 16 years old and older (Bureau of Labor Statistics 2001). During that period, USAREC had the resources it required to penetrate its prime market (that is, American males aged 17 to 21 years old), and the organization successfully recruited the number of new soldiers it needed each year. From 1990 through 1995, the average unemployment rate for people 16 years old and older dropped dramatically to 6.4 percent (Bureau of Labor Statistics 2001). During the same period (19901995), the United States was in the process of reducing its armed forces. This meant that USAREC received fewer resources because the numbers of required new soldiers were lower than during the previous decade. While USAREC achieved its recruiting goals during this period, it did so by focusing the recruiting on the highschool senior market while ignoring the post-highschool market. By excluding the college and college-bound market, it unintentionally set up the conditions that made recruiting a binding constraint on meeting national security obligations in 1998, 1999, and 2000.

(ASVAB). The ASVAB is the military standard test that measures applicants potential for training in a variety of skills, such as accounting, mechanical aptitude, or technology. Through many years and tens of thousands of individual training reports and scores, the military forces have accumulated strong statistical evidence that a high classication category trans-

From a recruiting perspective, a grad can always substitute for a senior.

lates into high trainability. This same empirical evidence collected clearly demonstrates that high-schooldiploma holders are more likely to successfully complete their initial training and term of service. This means that quality in recruits benets the army by reducing its costs in both training and personnel turnover. Hence, CATI-IIIA high-school diploma graduates are referred to as high-quality applicants. From a demographic perspective, in 1998, there were 18.9 million 17- to 21-year-old young people in the US, which is, on the surface, a sizable pool of potential applicants. However, the army cant recruit from the entire pool of potential applicants because, by law, most of the employment vacancies are for male applicants only, with females lling only about 20 percent of the annual new enlistments. This truncates the pool by almost 50 percent, focusing most of the armys recruiting efforts on high-quality 17- to 21-year-old males. Of the remaining pool of 9.4 million 17- to 21-yearold males, some are medically or morally disqualied, incarcerated, currently in the military or in college, or have category scores lower than CAT I to IIIA (see Figure 1). In the end, that large pool of 17- to 21-year-old males dwindles dramatically to approximately 1.4 million. The army denes these individuals as the prime market.

The Recruiting Prime Market Dened

By 1973, President Richard Nixon had discontinued the draft, created the all-volunteer force (AVF) and adopted the recommendations of the Gates Commission. Over the next 22 years (19731995) of the Be All You Can Be army, the Department of Defense (DOD) and the army slowly raised the minimum level of requirements, the quality marks, which forced USAREC to recruit volunteers who meet those requirements: Ninety percent of all new recruits had to be highschool graduates (diploma holders); furthermore, 67 percent of all new recruits had to have an aptitude classication of Category (CAT) I to IIIA, as measured by the Armed Services Vocational Aptitude Battery
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Developing Annual Army Recruiting Requirements

The Department of the Armys deputy chief of staff for personnel (DCSPER) is responsible for determining how many new soldiers the army needs each year to meet congressionally-mandated manning levels. To

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Figure 1: Out of the available 9.4 million 17- to 21-year-old males, some are medically or morally disqualied, incarcerated, currently in the military or in college, or have category scores lower than CAT I to IIIA. The armed forces considers the remaining 1.4 million 17- to 21-year-old men to be the prime market.

calculate the annual accession mission, DCSPER gives credits for the projected reenlistment rate and debits for the forecasted attrition rate. For example, if the armys enlisted strength is 390,000, the reenlistment rate is three percent (11,700), and the attrition rate is 20 percent (78,000), the annual accession mission for new soldiers is 66,300 (390,000 11,700 78,000). This number is further divided into monthly accessions to account for training requirements and budgetary spending limits for military pay. By August, DCSPER issues the new accession mission to USAREC, along with a forecast for the following year, so that by October 1 (the start of the new recruiting year), it can formulate a recruiting plan. This is important because USAREC must convert the current accession mission into a contract mission, rst to ensure that there are adequate resources allocated to meet the annual recruiting goal and, second, to build a DEP inventory for the following year. The contract mission is the total number of enlistment contracts USAREC must produce in a scal year to ensure it

meets the required accession mission. The contract mission has four parts: The annual accession mission, which is determined by the DCSPER; The building of an entry DEP (EDEP) warehouse at 35 percent of the next years accession mission (35 percent is a directive from the Department of the Army and has its roots in the historical AVF recruiting process); Factoring in a warehouse loss rate (DEP loss rate); and Taking into account the starting years DEP. For example, if the accession mission was 75,000 and the following years mission was projected to be 80,000, the rst part of the contract mission would be 75,000, and the second part would add 35 percent of 80,000 (EDEP build), which equals 103,000. The third part adds in a factor to account for DEP losses over the course of the year. Usually, this factor is 19 percent (based on historic trends). In this case, 19 percent of 75,000 equals 14,250, making the contract mission goal
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103,000 plus 14,250, totaling 117,250 contracted recruits. Fourth and last, the starting DEP inventory is subtracted to give credit for the number of enlistment contracts produced in last years effort that are still in the DEP warehouse. If the DEP inventory was 17,000, the contract mission becomes 117,250 minus 17,000 making the nal annual contract mission 100,250. This number, 100,250, is the amount of contracts USAREC must produce to meet all recruiting objectives. Recruiting is a 12-month process, starting October 1 and ending September 30. From a recruiting perspective, applicants who have high-school diplomas (grads) are shipped to the training units during 75 percent of the year (October 1 through June 30) since they are free from secondary school obligations. At the same time, USAREC recruits still-in-school seniors and places these applicants in the DEP. Upon graduation, sometime between the end of May and the middle of June, these seniors (now grads) are shipped to training bases during the remaining 25 percent of the recruiting year (July 1 through September 30). From a recruiting perspective, a grad can always substitute for a senior, but a senior cant substitute for a grad, because seniors can be shipped to training only during 25 percent of

the year. This was an important recruiting principle that USAREC needed to relearn to successfully meet future annual recruiting mission goals.

The Migration of the Prime Market Away from the Military

Todays youth have abundant opportunities in postsecondary education and the labor market that compete strongly with the military sector. In FY 1982, when the army established the Army College Fund (ACF), the fund was a market incentive unique to the army, and it provided recruiters with a tool of foremost importance to the prime market (Hill 2000, p. 78). Depending on the type of contract applicants signed with the army, they had the opportunity to accrue up to $35,000 in educational benets covering college tuition that the army would pay after the applicants successfully completed their military obligation. Since 1982, the ACF has gradually lost its buying power and recruiting advantage as competitors have stepped in to match or exceed the armys offer. By 1997, the high-school-to-college entrance rate was at an all-time high of 67 percent. This rate is not surprising in light of the gap between the earnings of the

Figure 2: The attribute ratio is a composite index of survey questions measuring the attitudes of 16- to 21-yearold males toward 24 desired employment attributes. These attributes helped analysts to gauge the survey respondents propensity or willingness to serve in the military services. A higher ratio indicates a preference for one sector of employment over the other.

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Figure 3: Prior to FY 1998, as the army reduced manning levels, the Department of the Armys deputy chief of staff for personnel made end-of-year adjustments to yearly requirements after accounting for each years nal retention and reenlistment rates so that the recruiting achievements equaled requirements. This practice stopped in FY 1998.

Figure 4: Past recruiting practices centered on managing a large DEP (Delayed Entry Program) warehouse to assure an abundant supply of applicants to meet recruiting needs. During the 1990s, low unemployment rates and good educational opportunities made it difcult to build a sizeable warehouse of applicants available for shipment to a training base. The high turnover rate in the DEP dramatically increased the recruiting tempo and caused the eld force to double its recruiting effort to make up for losses.

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Figure 5: The forecast showed that recruiting in the traditional pattern would result in failure to meet near-term goals because recruiting would emphasize the senior market and ignore the importance of the grad market in meeting monthly goals, resulting in a 17,500 shortfall.

Figure 6: The three-year recruiting forecast showed only a slight improvement to the more pessimistic imminent catastrophic failure looming on the horizon. Here, the forecast was for a shortfall of 16,300.

average college-degree holder and those of a person with just a high school diploma (Hill et al. 1999, p. 6). Further compounding the militarys recruiting difculties are the growing opportunities for college and technical education that are funded by external sources and again driven by the increasing wage premium college graduates command. The army leadership belatedly discovered that its ACF educational incentive was not competitive with other external college funding sources as Americas youth increasingly found more appealing ways to Be All You Can Be outside of the army. If losing the college incentive was bad, the change in the sociocultural environment was even worse. The
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Ofce of the Secretary of Defense sponsored an annual survey to evaluate attitudes in the prime market. The survey examined 24 attributes to measure the propensity of young males (aged 16 to 21) for military service (Program Evaluation and Analysis Directorate 2000). One key analysis from the survey compared the youths attitudes towards the military employment environment and the civilian employment environment. Specically, which option, civilian or military, did the surveyed population think best reected the ideal employment environment? Previously, the responses of young men in the prime market showed they thought that the military services offered a positive, highly

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Figure 7: The Contract Forward method depended on blending a just-in-time approach with a warehouseinventory approach. For USAREC, this meant changing the recruiting emphasis from the senior market to the grad market. By shifting the recruiting focus, it could meet the FY 2000 recruiting goals.

technical, and seless service environment, but that changed in FY 1997. After reaching a high by the end of FY 1993, the number of critical responses showing a willingness to serve in the military was at its lowest point since the creation of the AVF. The FY 1997 survey (Figure 2) revealed for the rst time that the surveyed population of 16- to 21-year-old males believed that civilian employment had more attributes important to them and their future success than the military (Program Evaluation and Analysis Directorate 1999). The FY 1998 survey showed that their attitude persisted. Youth preference for college and civilian employment increasingly hampered USARECs ability to meet recruiting objectives. In FY 1998, USAREC failed to meet the recruiting objective by 801 new enlistments and, in FY 1999, the shortfall was 6,300 (Figure 3).

Analysis for Developing the Contract Forward Methodology

Between 1990 and 1995, the army reduced its forces and USARECs recruiting-force muscle atrophied because of external and internal factors. Externally, young men in the prime market were still interested in joining the army. The army could pick and choose the best of the best. Internally, the army was downsizing from approximately 750,000 personnel to 480,000

in the standing army. As a by-product, the army created a large pool of qualied, ready-to-serve, priorservice applicants. The prior-service population created a safety net for recruiters, who could contact and then contract these applicants for enlistment into the army again if they had difculty getting enough enlistees from the seniors or grads. By 1996, as youth interest in military service declined, all of the services were completing their planned force reductions. With the completion of downsizing activities, the army was no longer lling the pool of prior-service applicants, and this in effect removed the recruiters safety net. The pressure to meet the annual recruiting goals led the army to concentrate recruiting in the largest single location of potential applicants the high schools. The reason was simple. High schools made it easy for the recruiter to deliver the sales pitch and reach a maximum audience in the least amount of time. But, from a recruiting perspective, the army was recruiting the wrong market at the wrong time. There were detrimental collateral effects in recruiting too many applicants from the senior market. The AVF exists based upon the applicants willingness to, rst, engage in contracts with the army and, second, to go to training in a given month. While it is easy to nd applicants from high-school seniors, it also means building a large DEP. The problem is that not everyone recruited into the DEP stays in the DEP. A variety of factors cause applicants to leave the DEP; the primary reason is that applicants simply change their minds.
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The next leading cause of DEP loss is dismissal because of illegal drug use. Finally, other medical factors cause applicants to become losses (for example, pregnancy and injury). What USAREC inadvertently did between 1996 and 1999 was to expend too much of its recruiting energy in a market that represented only 25 percent of the required annual requirements (Knowles 1997). As a result, the command missed its October-throughMay monthly recruiting goals. An analysis of recruiting production for FY 1996 through FY 1999 examined the efciency of the DEP warehouse. At the start of FY 1996, the command had nearly 32,000 applicants in the DEP. However, over the course of FY 1996, almost 19,000 of the applicants left

Americas youth found more appealing ways to Be All You Can Be outside the army.
the DEP, a 60 percent loss that forced USAREC to aggressively seek replacements for previously contracted enlistments just to meet recruiting objectives. The rate of loss steadily increased; by FY 1999, it was a staggering 98 percent (Figure 4) (Knowles 1999). Detailed analysis of contract placements suggested that USAREC would have to change its recruiting practices to meet monthly recruiting targets and reduce the turnover rates. USAREC would need to redirect its efforts from the seniors to the grads and focus on meeting monthly targets by pulling the contract enlistments forward. Specically, USAREC would need to shift recruiter focus to an 80 percent effort in the grad market and a 20 percent effort in the senior market. As a by-product, this method would likely result in a smaller DEP inventory and, therefore, a lower annual turnover rate and reduced management overhead costs. This controlled inventory method, which is similar to a just-in-time tactic, became known as the Contract Forward methodology. The Contract Forward methodology is fairly simple in application and practice. Although it uses relatively simple linear regression techniques, the integration of many other facets of the recruiting process is what enables this methodology to be a powerful management device for recruiting. Why? First and foremost, it returns control of the recruiting process to the leaders by
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empowering them to direct the efforts of the recruiting force into the right market at the right time. The Contract Forward methodology, in effect, acts as an earlywarning system and allows the command to maximize the success of monthly recruiting efforts without jeopardizing the annual mission. This Contract Forward strategy illuminated the theoretical road to success. However, to apply it in practice, USAREC had to overcome its traditional reliance on the senior market that had been its major source of new enlistments for 20 years. The shift into the grad market required USAREC to confront current competitive market dynamics: high-school seniors and graduates increasingly preferred higher education and opportunities in the commercial sector to serving in the military.

Contract Forward Application and Discussion

The recruiting force historically tended to recruit for far-term contracts, seeking seniors and ignoring grads. As long as USAREC continued to disregard the importance of the grads in the near-term recruiting goals, it would fail to meet the near-term monthly mission, as it did in FY 1998. Logically, since USAREC was now aware of this phenomenon, it should be able to avoid this pitfall and make an adjustment in FY 1999. If so, why did USAREC increase the FY 1998 shortfall of 801 to 6,300 in FY 1999? Furthermore, without a change in strategy, was it really any surprise that the FY 2000 forecast was for a shortfall of tens of thousands? If USAREC repeated in FY 1999 the month-to-month recruiting pattern established in FY 1998, the projected shortfall would be 17,500 (Figure 5). Aside from failing its manpower obligations, USAREC, according to the forecast, would pay a higher cost per recruit. The FY 2000 command operating budget (COB), which includes employee pay and allowances, facilities costs, recruiting incentives, training, advertising, computers, and communication costs, was $1.03 billion. Since the COB describes xed operating costs, the efcient expenditure of the funds is directly related to recruiting success. Ideally, a lower cost per recruit translates into better use of the funds. From

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Figure 8: Contract Forward recruiting gave the US Army Recruiting Command (USAREC) the exibility to identify troublesome months and to plan and execute overproduction in the remaining months. Consequently, it successfully met all recruiting objectives in FY 2000.

a FY 2000 perspective, the accession mission was for 80,000 new soldiers, and the forecasted shortfall of 17,500 meant that USAREC would enlist only 62,500 (80,000 minus 17,500). The cost per recruit would be over $16,400 ($1.03 billion divided by 62,500) (Program Evaluation and Analysis Directorate 2000). Naturally, neither USAREC nor the army was willing to accept the forecasted failure. As many in the leadership pointed out, this forecast was too pessimistic, but even using a three-year, month-to-month recruiting average, the DCSPER projected a forecast with only a slight improvement over the catastrophic failure scenario (Figure 5). The three-year monthly achievement average forecast a 16,300 shortfall (achieving only 63,700 new enlistments) at a cost of $16,200 per new soldier ($1.03 billion divided by 63,700) (Figure 6). Since the advent of the AVF, USAREC approached recruiting as a marketing process that relied on strict brand recognition including, since the early 1980s, the Be All You Can Be slogan. This had been an extremely successful marketing approach, but it reinforced the organizations inherent belief that recruiting success hinged upon aggressive marketing to highschool seniors. Unfortunately, while the army stayed focused on the Be All You Can Be marketing campaign, the environment changed and recruiting fell at. Recruiting mainly from the senior market couldnt support the current armys manpower requirements. The Contract Forward methodology examined the

looming failure from an inventory-control perspective. The underlying philosophy behind recruiting mainly from the senior market stems from the armys desire to build a large EDEP inventory35 percent of the next years accession mission. The desire for an EDEP was a legacy from the Be All You Can Be campaign when (in FY 1982), the national unemployment rate was above 11 percent. The army recruited seniors, put them under contract, and then held them for up to 12 months in the DEP. As long as unemployment was high, the army didnt have a problem maintaining and stocking its DEP. In the 1990s, the unemployment rate fell to its lowest point in the last 40 years. Along with increasing college attendance rates, this indirectly caused the depletion of the DEP warehouse and, without a sizeable DEP, USAREC didnt have enough in the inventory to meet demand. Analysis of recruiting market conditionsdecreasing propensity and unemployment rates, increasing numbers of seniors attending college driven by the college wage premiumstrongly supported the theory that the prime market was heading into a just-in-time market trend. Individuals would no longer tolerate being held in inventory before going into the army. Once they decided to join the army, they wanted to go within 45 to 60 days. This didnt mean that USAREC should abandon the senior market. On the contrary, the Contract Forward method depended on blending a new just-in-time approach with the traditional
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Figure 9: Operating in the high/high quadrant means that there is good market penetration and that recruiters are producing a large number of new enlistment contracts. In contrast, a low/low position indicates that there is poor market penetration and that recruiters are not producing enlistment contracts to the full potential of the market. The annual comparison chart between FY 1998 and FY 1999 clearly demonstrated a downward shift in penetration and decreasing market share by the brigades, indicated a loss of market leadership. The armys loss in the market translated to failure for the army and DOD. For USAREC to have success, the subordinate units needed movement to the right and up.

warehouse-inventory approach. The potential existed for a successful recruiting year using the Contract Forward method at a cost of $12,800 per accessionalmost $4,000 lower than the worst case and at a costefciency savings of over $204,000,000 (Figure 7). USAREC leadership understood that Figure 7 represented an optimal ow. The basic assumption underlining the Contract Forward optimal ow was that the recruiting force could nd the right person, for the right military training, to ship at the right timea tall order considering that the methodology also demanded a shift in market focus from seniors to grads. At best, the Contract Forward method gave USAREC
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a chance to reduce the forecasted shortfall from tens of thousands to about 3,000 if USAREC could ll more near-term requirements. Management did not decide to shift the market strategy overnight. Ultimately, senior army leaders understood and accepted the philosophy and potential of the Contract Forward approach, and they ordered its implementation in June 1999. It took three months for the recruiting force to make the adjustment from recruiting primarily in the senior market to recruiting increasingly in the grad market. While the FY 2000 recruiting year began successfully (Figure 8), the application of the methodology didnt

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Figure 10: The end-of-year survey for FY 1999 showed that a change in the attitude of 16- to 21-year-olds now favored the military and directly inuenced the armys success in penetrating and recruiting from the prime market.

Figure 11: The Contract Forward methodology stressed recruiting for near-term requirements and, therefore, a change in market strategy. By emphasizing near-term accessions from the grad market instead of long-term goals with seniors held in the Delayed Entry Program (DEP) warehouse for long periods, the US Army Recruiting Command (USAREC) lowered losses from the DEP and, as a result, it reduced its operating costs.

have a true optimal ow. The historically troubled November proved to be a mettlesome month as did other historically challenging months of March, April, and

May. Despite these difcult months, the command enjoyed success because the Contract Forward methodology provided exibility and the ability to plan for
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Figure 12: All of the subordinate units (brigades) managed to have a shift to the right, signifying an improvement in GSA market share. The penetration rate dropped downward slightly, but the drop was statistically insignicant, indicating that the penetration rate remained stable between FY 1999 and FY 2000. This was a necessary step in the Contract Forward approach to posture the army and DOD for recruiting success.

overproduction during the summer months of June, July, and August. The primary tenet of the Contract Forward technique is to ll as many slots as possible early, by focusing on the grad market.

Contract Forward Management Controls

Contract Forward gave USAREC a direction for success. To ensure that the organization stayed on track, the Program Analysis and Evaluation (PAE) Directorate of USAREC developed tools to track key marketintelligence factors. These analytical control devices provided leaders with snapshots of the recruiting process and provided insight for informed decision making on such issues as when to shift between the grad and senior markets and when to use spot advertising
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for these markets. Ultimately, these tools enabled USAREC to penetrate the markets following economyof-scale principles to target the right market at the right time. The tracking of monthly and quarterly market share serves as an important indicator for the army and for the DOD. To compute market share, PAE totaled all recruiting achievements of the other military services on a monthly, quarterly, or annual basis. The sum of all of the services new accessions is referred to as the DOD total. Dividing the armys accessions by the DOD total provides a percentage of the market share that is owned by the army. The army, as the market leader, must recruit the largest share of the market. The army has the largest mission (approximately 125,000 new soldiers each year) and the most military recruiters (approximately 8,000, representing a 43-percent share

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Figure 13: Using the Contract Forward approach, the US Army Recruiting Command (USAREC) continued to increase high-grad (more than 30 college hours) enlistments through the rst quarter of FY 2001.

of the total number of DOD recruiters). More important, the key indicator is the share of the grad market the army recruits compared to the other services. When the armys share of the grad market is equivalent to its share of recruiters, then the army has an equal chance at recruiting success (Knowles 1999). The air force and marines rely heavily on the senior market in recruiting. The navy is similar to the army in that it recruits aggressively from both the senior and grad markets, and it is staffed to train new seamen from both markets. The army emphasizes recruiting efforts in the grad market because it has a larger pool of applicants and, in contrast to the senior market, grads can be processed to the training base during the entire year. If the army takes too large a share of the senior market, the air force and marines fail to meet their recruiting requirements. To ensure competitive equilibrium among the services, the army must have the majority of new soldiers from the grad market in order to ensure its own success and to ensure that DOD as a whole is successful. A second tool that measured the armys market share and penetration, the USAREC portfolio model chart, tracked the Category I to IIIA quality grad and senior marketsreferred to as the GSA market. Using

the portfolio model chart, an adaptation of commercial marketing techniques (Peter and Donnelly 1997, p. 36), USAREC can track subordinate units (the brigades) monthly, quarterly, and annual performance in taking and sustaining its share of the GSA market. The number of GSA applicants indicates the health of USAREC and how well incentives, such as the Army College Fund, are working. The chart shows market penetration and market share, the standard measurements that determine the armys take from the GSA market. Penetration measures the number of DOD enlistment contracts written per 1,000 from the Category I to IIIA 17- to 21-year-old population. A larger penetration number indicates greater overall DOD recruiting success, while market share is the percentage of the armys GSA take compared to the rest of DOD. In FY 1999, when the army did not penetrate the GSA market sufciently and had a lower market share, it failed to meet the recruiting objective (Figure 9) (Knowles 2000). To succeed in FY 2000, as a minimum, USAREC had to improve the armys market share.

Conclusion/Impacts
What the Contract Forward methodology did for USAREC and the army was to bring together new business approaches and sales strategies that supported
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the recruiting shift into the grad market. In June 1999, USAREC began an advertising campaign and a repositioning of its recruiting force to reconnect America with its army. The army conducted an advertising blitz in markets of opportunity using new channels,

In FY 1999, the shortfall was 6,300.

such as direct Internet mailings and Internet cyberrecruiter chat rooms, to help it compete with the education and industrial sectors. The annual survey conducted at the end of FY 1999 showed that the advertising and the repositioning of the recruiting force had a positive effect on the attitudes of 16- to 21year-old males in the prime market (Figure 10). Using the Contract Forward methodology, USAREC exploited the change in attitude of the group. It reduced the DEP turnover rate by putting fewer seniors in the DEP warehouse, which reduced the loss from the DEP (Figure 11). Army recruiting reasserted its leadership among the services, which is important to the health of the nations military. The army led the DOD in the grad market, increasing its share by three percent or 6,000 accessions. From an army-only standpoint, its enlistments from the grad market were up 16 percent. To help subordinate units improve recruiting in the GSA market, the army expanded its recruiting presence on college campuses. The armys goal was to increase enlistments among the college dropout market. These applicants from the prime market are classied as high-grads (more than 30 college hours); they are usually in the quality category I-IIIA. When USAREC was successful in reversing an eroding market share (Figure 12), all of the brigades increased their GSA market share. USAREC continued to recruit successfully from the GSA market, among applicants who had some college (less than 30 college hours) through rst quarter of FY 2001 (Figure 13). USAREC could not have recruited over 80,000 new soldiers in FY 2000 without the underlying operations research and management science analyses that identied the trends, wants, and needs of potential recruits.
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The true impact of USARECs reinventing army recruiting is immeasurable. Recently, General Shinseki charted a bold vision for the army of the future: Soldiers on Point for the Nation . . . Persuasive in Peace, Invincible in War (Army 2020 Vision 2000). The armys successful implementation of the Contract Forward methodology precluded imminent catastrophic failure and transformed USAREC into a successful recruiting organization in the face of the most daunting challenges in the history of the all-volunteer force. Former secretary of the army, the Honorable Louis Caldera, stated,
The Armys recent decision to remove recruiting as a binding constraint and to give serious consideration to near-term manpower-level increases to meet growing national security requirements exemplies the condence the Army now places in the United States Army Recruiting Commands robust recruiting capability (Caldera 2001).

As an endnote, the army again achieved recruiting success in FY 2001 using the Contract Forward methodology. References
Bureau of Labor Statistics. 2001. http://www.bls.gov/webapps /legacy/cpsatab5.htm . Retrieved July 17, 2001. Caldera, Louis. 2001. Letter to Donald R. Smith, chairman, Franz Edelman Award Competition, May 18, 2001. Gilroy, Curtis L., W. S. Sellman. 1995. Recruiting and sustaining a quality army: A review of the evidence. Proceedings of Future Soldiers and the Quality Imperative: The Army 2010 Conf. 5372. Hauk, Keith B., Greg H. Parlier. 2000. Recruiting: Crisis and cures. Military Rev. (3) Professional Bulletin 100995/6 7380. Hill, Christopher M. 2000. The all-volunteer army: Historical challenges. Military Rev. (May-June) 7678. Hill, Christopher M., Rob Fancher, Greg Parlier. 1999. Recruiting Americas army at the millennium: Challenges ahead. PHALANX (September) 67. Knowles, James A. 1999. Analysis of post-recruiting production scal years 1996 to 1999. Internal working document. United States Army Recruiting Command. . 2000. Analysis of post-recruiting production scal year 1999. Internal working document. United States Army Recruiting Command. Peter, J. Paul, James H. Donnelly Jr. 1997. Marketing Management, 7th ed. Irwin McGraw-Hill, Boston, MA 3136. Program Evaluation and Analysis Directorate. 1999. Propensity and

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the prime market for scal year 1998. Internal working document. United States Army Recruiting Command. . 2000a. Propensity and the prime market for scal year 1999. Internal working document. United States Army Recruiting Command.

. 2000b. State of the youth market. Internal working document. United States Army Recruiting Command. Resource Management Directorate. 2000. Big ten report. Internal working document. United States Army Recruiting Command.

Executive summaries of Edelman award papers are presented here. The complete article was published in the INFORMS journal Interfaces [2002, 32:1, 78-92]. Full text is available by subscription at http://www.extenza-eps.com/extenza/contentviewing/viewJournal.do?journalId=5
Interfaces Vol. 32, No. 1, JanuaryFebruary 2002

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