November 10, 2016

Onward and Upward

Understanding Veteran Retention and Performance in the Workforce

By Phillip Carter, Katherine Kidder, Amy Schafer and Andrew Swick

With more than 11 million veterans in the workforce and approximately 175,000 service members discharged each year from active service, the overall economic performance of veterans is a critical component of veteran reintegration, wellness, and success.1 Indeed, the successful transition of veterans after service is imperative not just for their own economic well-being but for the viability of the All-Volunteer Force, to the extent that this success influences the propensity of future generations to serve in the military. 

It is clear, examining veteran wellness holistically, that gainful employment can provide the foundation for successful transition, offering compensation, a social network, and geographic stability.2 While prior efforts to improve the transition process have focused on unemployment rates and hiring, this study looked beyond initial hiring data to examine the behavior of veterans in the workforce, including retention and performance, as well as corporate perceptions of how veterans perform once hired. This study found that veterans are likely to leave their first job out of service relatively quickly, but their reasons differ widely. Most leave jobs for greener pastures – higher salaries, more responsibility, or a better fit – in positive ways that mirror non-veterans. A minority leave jobs for negative reasons, including those who are terminated, a bad match with their manager, or otherwise unhappy. However, low initial retention rates for veterans3 do not necessarily indicate a problem so much as reflect a general trend in the workforce, seen also in similar populations such as new college graduates or new managers. When movement of veterans between jobs occurs for good reasons, it can be viewed as positive indicator and over time helps veterans find their best fit within the workforce. Notwithstanding all that, there are indications that a significant minority of veterans still struggle to find their place in the civilian sector, with many facing underemployment as they transition from service and move between jobs or positions. A better understanding of veteran turnover will allow public-sector efforts to be more precisely targeted at the population segments that struggle the most during transition. Likewise, a more nuanced understanding of employment and retention will improve corporate execution of veteran hiring initiatives.

This study highlighted a number of dynamics surrounding veteran economic performance, with the primary findings and recommendations as follows:

  • Data collection regarding veteran retention and economic performance ranges from fair to nonexistent across the companies4 interviewed. This partly results from uneven government requirements to collect data that apply mostly to government contractors (rather than all firms), and only to certain classes of veterans. Improving data collection efforts by both private- and public-sector stakeholders to better track and understand veteran employment outcomes may provide more insight into veteran economic performance and also help companies achieve better outcomes with respect to veteran employment and corporate performance.
  • Incentivizing employers to value and measure veteran fit and performance rather than focusing on hiring metrics alone could improve retention, requiring a renewed look at how veteran hiring initiatives evaluate success and promoting programs such as mentorship and affinity groups.
  • Veteran retention rates are comparable to those of other groups in the workforce, making the high first-year turnover rate of veterans a phenomenon not necessarily related to veteran status. 
  • Most veterans will leave their first job after service within one year. However, most of these veterans leave their jobs for positive reasons, such as a move for more money, more responsibility, or a better location. A minority of veterans leave jobs for negative reasons, such as clashes with management or performance issues. However, there are no indications that veterans leave for negative reasons relating to their veteran status.
  • There appears to be lower turnover among veterans once they have found the correct fit, indicating that securing a role in a desired field is one of the strongest factors increasing retention of veterans.
  • While most veterans transition and perform well economically, a significant minority continues to struggle, facing issues such as underemployment and difficulty working in a non-military environment.
  • The current transition programs are well structured and aim to convey the most critical skills and information, but they vary by location, could use more robust oversight of their implementation and effectiveness, and could be extended and broadened to provide more depth and individualization to the course.
  • Financial literacy is an area that could be easily integrated into mandatory training and is essential to successful transition, with a financial safety net providing a greater amount of time to secure initial employment as well as preventing issues such as homelessness.
  • There is evidence to support the economic value of veteran employment. Studies have documented its economic value to society, as well as the greater aggregate profitability of firms that hire veterans.5 The Center for a New American Security (CNAS) survey results corroborated these studies, finding that managers perceive veterans as high-performing employees who add value to their workforce.

Background

The veteran community comprises over 21 million men and women who have transitioned from the military, as well as current members of the reserve component, most of whom will seek employment in the civilian sector.6 Their continued success is a key measure of the treatment of veterans after service and an integral element of developing broader veteran wellness. Yet, as early as 2011, the unemployment rate for veterans – particularly young veterans of the post-9/11 cohort – was higher than for their civilian peers, raising concerns over the welfare and economic outcomes of veterans after service. The response to this finding from both the public and private sectors was robust, with great strides made to combat the problem. Efforts such as the Veteran Jobs Mission and the White House Joining Forces initiatives have been proactive in promoting veteran hiring and highlighting the unique skill set veterans contribute to the workforce. By spring 2016 the Veteran Jobs Mission coalition had hired 330,296 veterans, with Joining Forces celebrating 1.2 million veterans and military spouses hired as it marked its five-year anniversary.7 While hiring remains an important initiative, veteran economic performance now requires a broader examination, with retention and post-hire trends providing a more comprehensive picture of veterans’ well-being as they move from initial transition through the establishment of careers.

Demographics

In 2016, the number of veterans stands at just over 21 million across the United States.8 Along with the approximately 2.4 million active, Guard, and Reserve service members currently in the military, approximately 23.5 million people in the United States – about 7.6 percent of the total population – either served or currently serve in the armed forces.9 The median age of the veteran population is 64, meaning that roughly half of today’s veterans are at or above retirement age. Consequently, approximately 11 million veterans are currently in the workforce.

Geographically, veterans are spread across the United States, with the highest numbers living in the populous states of California, Texas, Florida, Pennsylvania, and New York.10 Older veterans tend to concentrate in large cities and large retirement areas such as Southern California, Arizona, Texas, and Florida. Working-age veterans are more dispersed, with clusters around major military bases, as well as major urban areas and job centers. A significant factor in this dispersion is the geographic composition of the recruiting pool from which the Department of Defense (DoD) draws the All-Volunteer Force. In today’s military, the South and Midwest are overrepresented, while the Northeast and West are underrepresented. Major urban centers such as New York, Chicago, the San Francisco area, and Southern California are particularly underrepresented in the military.11 In fiscal 2013, the south Atlantic region – including Delaware south through Georgia and Florida – accounted for nearly a quarter of all enlistments.12 This geographic distribution of recruits matters because a significant percentage of veterans return to their home of record after service, and because the significantly higher propensity to serve among military families creates a self-replicating cycle of service in these areas.

In general, the population of all veterans in the United States is less diverse than the current military population and underrepresentative of ethnic minorities in the total U.S. population. This reflects the racial composition of the military 30 to 40 years ago, when the majority of today’s older veterans served. While 79 percent of all living veterans are white, 11.5 percent are African-American, 6 percent are Latino, and 1.4 percent are Asian-Americans.13 Approximately 92.7 are male and 7.3 percent are female.14 The overall veteran population, with a median age of 64, is also significantly older than its civilian counterpart. By contrast, in the current active-duty force, women represent approximately 15.1 percent of service members.15 Ethnic minorities represent nearly a third of the active-duty population, with African-American service members in particular constituting 17.2 percent of the force.16 Consequently, the veteran population of 2020 or beyond will be significantly more diverse than today.

In addition to becoming more diverse, the active-duty force is more educated than in previous years. While only 3.4 percent of enlisted personnel in 1995 reported having a bachelor’s degree or higher, that grew to 7 percent by 2014.17 In addition, 83.8 percent of officers have college degrees, and 92.1 percent of enlisted personnel have a high school diploma, though not a college degree. Among the veteran community, average veterans are more likely than their civilian counterparts to have some college experience, though they lag slightly behind average Americans in having a bachelor’s degree or higher, at 15 percent.18 

Within the veteran community, the post-9/11 cohort stands apart in demographics and characteristics. This cohort includes approximately 5 million service members who have served since 9/11, including more than 2.8 million who have deployed to Iraq, Afghanistan, or other theaters of war since 9/11.19 The post-9/11 cohort is more ethnically and gender diverse as well as more educated than older veterans.20 Regardless, post-9/11 veterans experienced higher rates of unemployment in the last decade than average Americans and the rest of the veteran population – pointing to a unique set of problems for this group.

Veteran Unemployment

For decades, joblessness among veterans sat below the national average unemployment rate; however, in recent years post-9/11 veterans regularly experienced higher rates of unemployment than their non-military peers. Unemployment for the Gulf War-era II21 group of veterans reached crisis levels in 2010 and 2011, peaking at 12.1 percent compared with a national average of 8.7 percent.22 To combat this, federal agencies as well as private-sector companies developed incentive programs and hiring initiatives to improve the employment rate of veterans. Through a combination of these efforts and the overall economic improvement, the jobless rate for post-9/11 veterans has decreased significantly since 2011. As the national unemployment rate fell to 7.1 percent in 2013 and to 5.1 percent in 2015, veteran unemployment likewise declined, to 4.6 percent.23 While the jobless rate for post-9/11 veterans also decreased, their rate still remained higher than both the national average and the rate for all veterans, at 5.8 percent in 2015 and 4.4 percent in August 2016.24

UNEMPLOYMENT OVER TIME

Employment Situation of Veterans, U.S. Bureau of Labor Statistics

To a certain extent, unemployment after service has become a part of the transition process, with over half of post-9/11 veterans facing a period of unemployment after separation. 25 Recent data show that 59 percent of nonretiree soldiers being discharged from the Army applied for unemployment compensation.26 Yet, rates of employment provide only one measure upon which to evaluate veteran economic success. Retention, performance, and other measures matter too, particularly for ensuring that veterans succeed after hiring. Though hiring veterans has become a priority for many companies, only 7 percent of human resources (HR) executives at Fortune 500 companies indicated being either “satisfied or very satisfied” with their veteran hiring programs.27

“Look for work well before you leave the military. You are going to deal with a lot of unexpected changes; not having a steady income can make or break you.”

 —Survey Respondent

Findings

CORPORATE DATA COLLECTION

This study was designed to collect corporate human resources data in order to analyze objective data about hiring, retention, and performance of veterans within the private-sector workforce. CNAS researchers contacted more than 40 companies directly to request that their aggregate data be shared in a secure, confidential manner. Participants in the Veteran Jobs Mission coalition shared the CNAS data request with all of the companies in that coalition, requesting their support and participation. Unfortunately, CNAS was unable to obtain data from a significant or representative enough sample of companies to conduct meaningful analysis for this study.89 Nonetheless, through the process of contacting companies to discuss their human resources data, CNAS was able to identify several issues with respect to corporate data collection and analysis on veterans in the workforce.

The first issue relates to uneven data collection by companies regarding veterans. There is no single legal standard, nor a single best practice adopted by most businesses, for collection of data regarding veterans in the workforce. The federal government requires government contractors to submit data regarding certain classes of “protected veterans”90 via annual report to the DoL. These protected classes include disabled veterans, recently separated veterans, and veterans who serve in certain conflicts, among others. However, these rules do not require the systematic collection of data on all veterans, only on the protected classes of veterans identified in statute or regulation. It also does not require the collection of data beyond the number of protected veterans hired in a given reporting period and the number currently employed, broken down by tier of employment.91 Most significantly, this federal data collection requirement only applies to government contractors and subcontractors – a significant part of the economy, but a minority of companies nonetheless. There is no legal requirement for all U.S. companies to collect data on veterans hiring and retention, let alone report such data publicly.

Despite this relatively narrow legal requirement, most large companies do collect some data during the hiring process regarding employee veteran status. Most of the companies studied include questions about veteran status in their employment applications. The standard practice among most companies is to ask two questions regarding veteran status – one regarding whether a person is a “protected veteran” as defined in federal law, and a second asking if the person has ever served in the armed forces. Corporate personnel interviewed said they had a high degree of confidence regarding answers from “protected veterans,” and also from reservists who might seek to use military leave or other benefits. 

However, nearly all corporate representatives interviewed for this study agreed that self-identification by veterans was poor outside of these classes of personnel and that most corporate data significantly undercounted the number of veterans in the workforce because many veterans did not identify themselves. Further, when asked if they could query their workforces about veteran status, or advertise internally to increase self-identification and affinity group membership, most corporate personnel said they were unable to do so for legal reasons. “Our lawyers analogized this to reaching out to another minority group,” one recruiting professional stated. “You can’t send an ‘all hands’ email asking for Latino employees or disabled employees, and you can’t send one asking for veterans either.” 

Consequently, even among large, sophisticated companies with significant veteran employment initiatives, few companies expressed confidence in their data regarding veteran representation in the workforce. Fewer still expressed confidence in their data regarding retention and turnover, let alone performance. Because of the difficulty in identifying veterans in the workforce, and legal concerns regarding analyzing employee performance on the basis of group membership, few companies indicated they generated data regarding the job performance of veterans either. 

HIRING AND RETENTION

Several prominent themes surrounding the veteran experience emerged during this project, including the importance of expanding and re-emphasizing the current transition programs already in place; the struggle to translate military experience to civilian hiring managers and companies; and the fact that there are key demographics that appear to struggle the most with transition, primarily junior enlisted who lack a four-year college education. Among veterans who had a master’s degree, 53.1 percent found a job within 3 months; the same could be said of just 36.4 percent of those who had only a high school/GED diploma. Similarly, 21.7 percent of enlisted respondents reported needing a year or more for their post-transition job search, as compared with only 12.9 percent of officers and 9.1 percent of warrant officers. Female veterans also appear to struggle with job placement, with 10 percent fewer female veterans reporting finding a position within three months, and 10 percent more needing a year or greater to secure employment. This suggests that female veterans may require a greater level of transition assistance than is being offered. It is also possible that some of the struggle to secure employment may be due to unwillingness to self-identify as veterans92 and make use of the advantages provided by various veteran hiring initiatives.

Connecting companies willing to hire veterans with job-seeking veterans could prove more difficult than one might initially intuit. Both veterans and companies report difficulty in finding each other in the marketplace. On the veteran side of the ledger, individuals say it can be difficult to locate companies with veteran-focused hiring programs, particularly at the local level, among small and midsize firms that do not have the same national exposure as the large companies in the Veteran Jobs Mission. Companies likewise report difficulty identifying veterans transitioning from active duty, because of long-standing policy barriers that preclude DoD from sharing data about (or providing direct access to) imminently separating service members and because of the limited extent to which DoD has participated in public-private partnerships to help transitioning service members connect with training or employment opportunities before discharge.93

Question: How long was you job search post-transition?

Though many acknowledge the concrete steps that have been taken to improve transition programs, there is still a marked variance in the quality of veteran résumé and application materials that belies a distinct difference in quality among various programs. In particular, several interviewees said that veterans tend not to tailor their résumé to individual jobs, do not always translate skills well, and either overvalue or undervalue themselves. Survey respondents also pointed out areas where their transition was insufficient, stating that transition should be “an entire career program from service enter to separation” and that the “best assistance would have been advice in how … military experience related to civilian jobs.” 

The presence of veteran affinity groups was highlighted as a resource that was believed to aid in retention and provide a softer landing for transitioning veterans who may miss the camaraderie and familiarity of the military environment. However, it was also suggested that affinity groups within the workplace or community connecting veterans and nonveterans could serve to bolster veteran networks and close some of the civil-military gap that exists and could be contributing to workplace difficulties overall. One interviewee in particular outlined the value for future job performance and success in expanding veterans’ civilian professional networks through such community groups.

In their survey comments, several respondents further emphasized the importance of networking for their career success. One respondent cited that “networking to be as important as ‘advertised,’” while another stated that networking was “very key to connecting to the right type of professionals that could assist in [the] job search.” These observations are thoroughly supported by the 2016 Veteran Insights Report by LinkedIn. The report, which analyzed data on more than 2.1 million veterans on LinkedIn’s site, found in particular that “networking is the #1 way veterans find career opportunities” and that veterans are significantly more connected on the site than their nonveteran counterparts.94

Responding to the particular challenges faced by veterans coming from the junior enlisted population and those without a four-year college degree, another interviewee emphasized the importance of veterans’ finding ways to continue their education. While many veterans feel the pressure to find a job immediately to establish economic stability after transition, he argued that the next priority after financial independence should be seeking opportunities for acquiring new skills, certifications, and degrees. Despite the growth of programs among some employers that allow veterans to pursue degrees while remaining employed, finding the financial liberty to enter college remains a challenge for many veterans. 

REASONS FOR DEPARTURE

The high turnover of veterans in their first year of employment95 mirrors current typical societal trends96 and in large part it appears also to reflect positive economic growth, with the top three reasons for leaving a job being a desire for new challenges, a need to make more money, and the receipt of a better offer.97 Additionally, 70 percent of respondents report their current employment meets, exceeds, or significantly exceeds the expectations they had for civilian employment upon leaving military service, and 68 percent would recommend their current job to another veteran. However, the next three reasons for leaving a post-transition job highlight that although many veterans have a positive economic experience, a small minority truly struggle upon separation from the military. These veterans, who can be considered an at-risk population, cite lack of purpose or impact, poor match with manager, and involuntarily separated as reasons for leaving their job.98

Although many veterans have a positive economic experience, a small minority truly struggle upon separation from the military.

Those with lower levels of education have a higher likelihood of being involuntarily separated, with 33.3 percent of those with a high school/GED diploma and 30.1 percent of those with some college noting they had been involuntarily separated, as compared with 23.8 percent and 22.7 percent for those with a four-year or master’s degree, respectively. Similarly, 49.7 percent of those with master’s degrees report leaving a job because they “wanted new challenges,” versus only 33.3 percent and 34.4 percent of those with a high school/GED diploma or some college education.

There were several notable differences among veterans from the various branches of service.99 Survey respondents from the Army, Army Reserve/National Guard, and Navy were more likely to report being involuntarily separated from a job, at 28 percent, 32 percent, and 27 percent, respectively, as compared with 21 percent and 19 percent for the Air Force and Marine Corps. Among other reasons for leaving a job, 57 percent of Army Reserve/National Guard veterans cited “want[ing] new challenges,” as compared with 42 percent of all veterans. Those from the Marine Corps and Army Reserve/National Guard were more likely to note leaving because they “wanted to make more money,” and also to report they had left a job for a “better offer.”

When results for female veterans were isolated, many of the emerging trends reflect broader workplace themes that echo dynamics for nonveteran females in the workforce and are not necessarily related to veteran status. Women are 6 percent less likely than men to report being involuntarily separated from a job, and 5 percent more likely to report leaving due to a skill or experience mismatch.

Question: Reasons for Leaving your Job

UNDEREMPLOYMENT

In considering the underemployment phenomenon, it is worth noting that 60 percent of respondents say their experience and skills are greater or significantly greater than what is required for their current job, indicating that veterans are not being effectively matched with jobs that use their applicable skills. The fact that veterans may find themselves not using applicable military skills is also supported by LinkedIn’s 2016 Veteran Insights Report; it found that 67 percent of veterans “are working in a job that is not similar to their military role.”100 Noting this reality, several survey respondents highlight the importance of translating military experience to civilian skills, with one person stating that veterans must “focus less on military-specific experience and knowledge and more on things like teamwork, individual responsibility, [and] leadership.”

Among all veterans, former enlisted personnel felt more undervalued and underutilized than former officers. Veterans from the enlisted population were more likely than officers to claim that their manager did not value their experience as a veteran, and 18.7 percent of former enlisted personnel cited a “skill or experience mismatch” as a reason for leaving a job, versus only 11.2 percent of former officers.

Question: My experience and skills are _____ what is required for my current job.

Veterans of more recent service periods, especially younger veterans, demonstrate that they may be undervalued or underutilized in the workplace. For example, 42.9 percent of veterans in the post-9/11 period claimed that their current job offered them “too little responsibility,” compared with 37.9 percent of veterans of the 1990s and 34.5 percent of those from the post-Vietnam era. Younger veterans of the post-9/11 group felt even further undervalued, with 23.8 percent of post-9/11 veterans in the 18–29 age group either “somewhat” or “strongly disagree[ing]” that “[their] manager values [their] experience as a veteran.”

Question: My manager values my experience as a veteran.

In comparison, only 16 percent of veterans in the 30–49 age group from the post-9/11 cohort felt the same way. 

60 percent of all veterans report their experience and skills are “significantly greater than” or “greater than” what is required for their current job; however, those from the Army and Marine Corps were most likely to feel that their current job offers them “too little” responsibility.


PERFORMANCE AND IMPACT

Question: I make a(n) ____ impact in my civilian job than in the military.

In their current job, over 85 percent of veterans somewhat or strongly agree that their contributions “make an impact to my company or employer’s success,” again emphasizing the desire to continue to engage in work with a sense of mission or purpose, and providing an avenue for employers to improve retention by focusing on the broader role veterans play in the success of the team or company. However, 44 percent “make a smaller impact in my civilian job than I did in the military.”


In surveying both those in a position to screen and hire veterans in human resources and recruiting, as well as those who lead or manage veterans as supervisors and managers, there appears to be a disconnect in perception of veterans and their role at various companies. While managers place a strong emphasis on the leadership qualities veterans bring to the workplace, HR and recruiting are most interested in skills that are directly relevant for a civilian job. Managers are also far more likely to perceive a variance in the amount of time veterans stay with a company; only 37 percent said it is “about the same” as nonveteran colleagues, as compared with HR representatives, who estimate that 65 percent of veterans stay with the company about the same amount of time as nonveteran colleagues. Both groups do note that the top three reasons for veterans to leave employment are: greater opportunity or a promotion elsewhere, better compensation, and a desire to do something different. This seems to confirm what veterans self-report.

More than 90 percent of the managers surveyed say veterans are promoted faster than their nonveteran peers, and 68 percent also say veterans perform either better or much better than their nonveteran peers. Additionally, over 75 percent say veterans are easier or significantly easier to manage than their nonveteran peers.

Veterans responded disproportionately for the surveys geared toward human resources, recruiting, supervisors, and managers, providing what may be a biased sample, but also highlighting that those most invested in these outcomes and key to veteran economic success are other veterans. The value of this network should continue to be emphasized.

Recommendations

Veteran economic performance plays an important role in fulfilling the nation’s obligation to its All-Volunteer Force, as well as fostering civil-military ties and promoting service as an appealing option among youth. The available data show that hiring and retaining veterans is good for business – veterans bring a level of dedication and professionalism that promotes the bottom line while lower turnover increases institutional knowledge and cuts costs.

Recent statistics surrounding high veteran turnover in the first year of employment raised curiosity and concern, though that appears to largely be a positive story. Most veterans are changing jobs to find new challenges, for better compensation, or for a better offer. Though seemingly indicative of struggle, for the post-9/11 cohort, job movement tracks with societal trends, as the economy shifts to encompass careers where a breadth of diverse experience is valued. However, despite positive trends, there are still a number of veterans who, while employed, feel underutilized in the private sector, and first-year turnover could also indicate initial underemployment. This could represent a number of issues, including difficulty with key transition skills such as résumé building and interviewing, a mismatch of expectations, or difficulty on the part of companies to accurately account for military experience. 

Transition from the military is better thought of as an extended process than a one-time event, and both public- and private-sector efforts at retention may be better served by aiming at second, third, or even fourth jobs out of service, to allow an adjustment and socialization period. In fact, data indicate that once settled in a satisfactory job, veterans have a retention rate that is higher than that of nonveteran peers.

Though veteran economic outcomes have improved demonstrably since high unemployment numbers in 2011 created the impetus for action, there are still several key areas where progress can be made. 

"Transition shouldn’t be ‘just in time’ but an entire career program from service entry to separation.”

-Survey Respondent

Improve Data Collection and Usage

One area for improvement across the public and private sectors is in tracking the data surrounding veterans, to both demonstrate their added value and have a clearer picture of who is struggling so practical solutions can be developed. Though some firms are beginning to track longitudinal data, society as a whole lacks key measurements of both success and failure. Improvements in data collection and usage could provide a clearer picture of the economic outcomes of veterans, highlighting areas where public-private partnerships could be most impactful, at-risk communities within the veteran population, and how efforts should be allocated going forward. Many of the efforts currently focused on hiring veterans may be better-served by shifting their metrics of success to focus on retention.

Specifically, current Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) rules regarding hiring practices of federal contractors for protected veterans can be expanded to collect more data about veteran employment. While hiring benchmarks and other VEVRAA-required policies would not be changed, federal contractors should track the number of all veterans – not just covered veterans – who apply to jobs and are hired. Additionally, requiring contractors to maintain data on how long those veterans remain with their companies would provide a fuller picture of the veteran employment situation past initial hiring. The DoL should also encourage private employers not subject to VEVRAA requirements to develop similar data collection practices when possible.

Another untapped resource for enlarging the view of veteran employment and retention exists in Internal Revenue Service (IRS) tax data. While taking care to protect private information, the IRS could provide the DoL or private research organizations access to tax data so they could identify and analyze employment trends in the veteran community, including income trends among veterans, patterns of employment activity, and trends among employers hiring veterans, including data on the size and industry of employers hiring veterans.

“The best assistance would have been advice in how my military experience related to civilian jobs.”

-Survey Respondent

One of the primary challenges in determining veteran outcomes post-hire is the lack of data surrounding veteran retention, which is currently measured largely through self-reporting survey mechanisms, such as in this study, and is left largely untracked by companies or the government. Both the DoD and VA lack a robust tracking mechanism for veterans, resulting in a dearth of data on both economic and health outcomes – data that could be used to better measure success in these respective areas. While progress has been made in reporting of veteran hires, especially within companies that belong to hiring coalitions, few businesses track data surrounding veterans after hire, making metrics such as retention and promotion rate difficult to determine and stymieing the broader narrative and body of knowledge around the economic value of veterans in the workplace.

Currently, DoL regulations surrounding who qualifies for protected veteran status and how companies can legally comply with privacy regulations lead to confusion among companies as to the legality surrounding tracking some of the key retention data. Companies largely rely upon veterans to self-report their status, with a cultural reluctance to report or self-identify limiting the data available. Encouraging veterans to self-identify with companies as well as clarifying what can legally be tracked should help to eliminate several of the obstacles currently precluding more accurate data collection.

While VEVRAA requires employers to invite applicants to self-identify as protected veterans, some veterans may fear a stigma about their military service and be reluctant to do so. To avoid this, employers should clarify on all hiring forms that self-identification is only used for data collection purposes and that any discrimination based on veteran status is strictly prohibited. The DoL can assist employers in developing this clarifying language by providing examples in DoL literature explaining VEVRAA requirements. 

Understand Veterans in the Context of the Broader Population

Though veterans are a subset of the population worthy of study and attention due to the sacrifice of their service, many of the trends reflected in this paper are mirrored in the general population. Veterans are people, and many of the issues they face are universal across those transitioning career fields or finding their first job. This provides an opportunity to draw lessons and garner resources from the private sector, as well as to put into perspective the struggles to find employment as a normal phenomenon – not one that is reflective of veteran status. This serves to reinforce the idea that transition programs could be broadened to encompass more time both prior to leaving service and for the first three to 12 months post-service. Additionally, charting goals over a three- to five-year period may ease the stress of the “first” job and provide a more pragmatic approach to career development.

Change the Metrics of Success from Hiring Veterans to Retaining Veterans

Shifting from a focus on number of veterans hired to also take into account the retention and career trajectory of veterans after hire and aligning the incentive structure to reward outcomes may help ensure veterans are being hired into positions that will be a good long-term fit. Right now many programs focus on number of veterans hired, which may lead to underemployment or hiring veterans into jobs in which they are not necessarily going to achieve success. Current hiring incentives may push the problem to the right, contributing to high turnover among veterans and the necessity to continue to job-hunt. 

One element of embracing a longer-term view of veteran success is promoting both military and civilian mentorship. While military affinity groups are an excellent resource to aid in transition from a military workplace to a civilian one, when providing mentorship veterans could be further enabled by being mentored by whoever is the most successful in their given role, not just limited to veterans. These efforts can prove complementary, providing not only a veteran network but also promoting the best possible economic outcomes and familiarizing nonveterans with the work ethic and value-added of veteran hires. Several interviewees highlighted the role that affinity groups play in their company, creating a greater sense of belonging and impact among veterans and providing insights into the civilian career and hiring structure from those familiar with the military system. Additionally, collaborative research by Syracuse University and Team RWB found that participation in community groups has an indirect impact on employment, leading to better networks of contacts, more productivity, and higher levels of job satisfaction.

“You need to remember that you’re starting over. While you have the intangibles, such as a good work ethic and leadership skills, you need to gain the professional skills that your colleagues were working on for years while you were in uniform.”

-Survey Respondent

Articulate the Economic Value Proposition

Though there are many appeals to patriotism when promoting the hiring of veterans, the most compelling reason is to boost economic performance. The Corporate Executive Board company analyzed performance data of companies and found that “veterans, on average, perform at higher levels” and that their turnover rates are lower, both of which positively affect business results and revenue.

Our survey of supervisors and managers reinforces this notion, that veterans perform better than their nonveteran peers. The most highly ranked characteristic that makes veterans attractive job candidates to supervisors and managers is “leadership,” followed by “perseverance/ethic” and “alignment with company culture/values.” One respondent found veterans to be attractive employees due to “PRODUCING!” and cited their excellent work product, with others saying veterans offer “honesty, integrity, and initiative.” 

Improve Transition

Recent efforts to improve the transition assistance programs have made significant progress in areas such as résumé and interview preparation, and going forward it will be important to track whether these changes bring improvement. Additionally, the military might consider a more extended transition program, in which service members are encouraged to take proactive steps earlier and also allowing for feedback through multiple sessions at different key junctures, such as after an initial round of job applications or interviews. Though language reflective of this is part of the newly implemented TAP, in execution it is highly dependent on individual commanders and op tempo.

Aligning programs with final geographic location and potentially integrating the reserve component in this process could also aid in the development of a network and prevent feelings of isolation after separation. 

Reshaping the narrative of transition as a process, rather than an event, highlights the growing shift to multicompany careers and the evolution of veterans past their first job to establishing careers. Though the data show that most veterans will change jobs in their first year after service, this appears to be in many cases a sign of positive growth – with the most commonly cited reasons for change being greater compensation, a better job, or a better location. Additionally, veterans feel their military experience helps them perform their civilian job and that their manager values that experience. However, a significant minority of veterans feel underutilized and underemployed in the private sector. Given the likelihood of veterans to have multiple jobs in their first three to five years out of service, the importance of robust and substantive transition programs with a focus on job-seeking skills is paramount. There are many benefits to furthering the body of knowledge surrounding veteran economic performance, from providing key areas for improvement to aid those veterans who struggle after leaving military service, to further illustrating the business case for hiring veterans, as well as demonstrating to young men and women considering military service the added skills and positive economic outcomes for those who choose to serve their country in uniform. Additionally, rather than focusing solely upon hires directly out of the military, this indicates there is a significant secondary market for veteran hiring due to the increased likelihood of turnover in the first three to five years of employment post-service. 

Increase Financial Literacy

Promoting financial literacy within the armed forces and for transitioning service members would go far in facilitating a more secure transition and the future economic success of veterans. Encouraging service members to begin saving for transition well in advance could provide an economic safety net to prevent some of the more extreme unemployment-triggered issues such as health care problems or homelessness, while allowing some the luxury of a more extended job search, potentially resulting in a better initial fit.

Support the Role of Management/HR

Those who work in hiring, either in a supervisory or human resources capacity, play a critical role in veteran economic performance, governing the hiring and placement of veterans. Though managers value the “soft” skills of veterans, such as leadership and dedication, first veterans have to clear HR hurdles. With many companies using online résumé scanning software, the lack of understanding of military experience or of missing components such as certain certifications or a four-year degree requires further efforts to ensure veterans are given a fair chance to compete for roles. This is not to say that veteran status should lower the bar for hiring, but rather that veterans bring a unique skill set that may not always be readily identified by traditional means, costing both the veteran and the company a potentially mutually beneficial hire.

Given the unfamiliarity of much of the American public with military service and the veteran population, it is easy for the narratives surrounding those veterans who suffer from post-traumatic stress disorder (PTSD) or mental illness to be generalized across the entire veteran population in hiring. One survey respondent noted that many veterans – particularly combat veterans – are unfairly categorized in this way; as the veteran stated, people “automatically assume that [veterans] are all PTSD-prone.”

Lastly, veteran hiring goals may not create the net benefit employers intend – by incentivizing numbers over fit, veterans may be hired into roles that they leave quickly. By reframing the incentive structure to focus on veteran retention and success, companies can align outcomes with hiring using metrics such as turnover rate and reasons for leaving to evaluate the efficacy of veteran-oriented programs. Given the high cost of turnover, this shift in focus may lead to lower numbers of veterans hired, but longer tenures, or the ability to hire veterans several years out of service who are looking for new challenges or better offers.

Two HR practices that provide obstacles specifically to veterans are the baseline educational requirements for positions and the lack of understanding of military service. This creates an opening for informational sessions and public-private partnerships to educate both companies and those who conduct initial hiring screens as to how they could be more veteran-inclusive. Both of these filters largely prevent candidates from being considered as initially qualified, and therefore preclude veterans from reaching the interview stage. Given the robust approval of veteran performance by supervisors and managers, opening the pipeline so more veterans are given the initial opportunity to interview may yield greater hires, as managers will be able to evaluate holistically rather than based on a résumé. This also opens the door for companies to undertake initiatives to provide military equivalency for certain qualifications, providing automatic certifications for certain skill sets or waiving education requirements for equivalent experience. Similarly, HR partnerships with veteran-friendly unions or schools may provide a broader pipeline for hiring veterans with specific skill sets or certifications.

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Endnotes

  1. Though this study focused specifically on veteran economic performance, there are numerous parallel obstacles facing military spouses and families that warrant further research but fall outside of the scope of this study.
  2. Employment is thought to be a critical step in avoiding homelessness and creating a network that may aid in preventing feelings of isolation.
  3. Rosalinda Maury, Brice Stone, and Jennifer Roseman, “Veteran Job Retention Survey Summary,” (Institute for Veterans and Military Families at Syracuse University and VetAdvisor, 2014), http://vets.syr.edu/wp-content/uploads/2014/10/VetAdvisor%20Report(FINAL%20Single%20pages).pdf.
  4. In the completion of this study, CNAS conducted interviews and discussions with personnel representing a broad range of medium and large companies, drawn mostly from the membership of the Veteran Jobs Mission (https://www.veteranjobsmission.com/meet-the-coalition).
  5. “The Business Case for Hiring Veterans,” (CEB Corporate Leadership Council, 2013), http://img.en25.com/Web/CEB/CLC7538513SYN.pdf.

    Please view the full list of endnote in the report PDF.
  • Phillip Carter

    Senior Fellow and Director, Military, Veterans, and Society Program

    Phillip Carter is Senior Fellow and Director of the Military, Veterans, and Society Program at the Center for a New American Security.  His research focuses on issues facing v...

  • Katherine Kidder

    Fellow, Military, Veterans, and Society Program

    Katherine Kidder is a Fellow in the Military, Veterans, and Society Program and the Center for a New American Security (CNAS). She leads the CNAS Rebuilding the Bipartisan Def...

  • Amy Schafer

    Research Associate, Military, Veterans, and Society Program

    Amy Schafer is a Research Associate with the Military, Veterans, and Society Program at the Center for a New American Security (CNAS), where she focuses on civil-military rela...

  • Andrew Swick

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