Will Force reductions drive civilian salaries down?

2014-11-14T13:30:39-05:00

With the reduced need for uniformed members, the branches have been and continue to force good members out into the civilian workforce. There will be a demand for more jobs and possibly in short supply. This could be seen as an advantage to employers to increase profits by lowering salaries.
I transitioned from 10 years Active Duty in 2009. What I've noticed in the past five years of contracting is such a trend. Budgets are being cut but some companies are not willing to take the profit hits. Instead they place the financial burden on the new employees by reducing salaries. I am seeing this trend especially in contracts in Afghanistan, there are great Analyst working 84 hour weeks deployed, getting paid around what a 40 hr/wk job in the D.C. area would bring. Most of these guys are taking these jobs to float them until they can find a job with better compensation.
Occasionally I am approached by recruiters for programs I used to work on. In the past two years I've seen several program salaries take more than 50% pay cuts, and they competency of the workforce sometimes reflects it. With the mass influx of recently separated service members flooding the market, the job will go to the lowest bidder. Often I have had to fight for my position at higher compensation than employers want to deliver. Sure, employers can find someone willing to do the job for less, but then again that is what they get, something "less".
I've even seen 20 year retirees enter the workforce not knowing what they are worth. One retiree in particular was very well versed in my career field, much more than me. For this program we were hired as equal peers. Yet he didn't do his homework and was making 30% less than me.
For those looking to transition, prepare yourselves. From my TAP class, most veterans working their first civilian job start looking for a new job within the first 4 months. Unless you are lucky, consider the first job a practice run unless it truly is your dream job.
I'm curious, do i have tunnel vision? Am I missing something, can someone see this issue from a different prospective and predict a different outcome?

Response by CW5 Private RallyPoint Member made Nov 14 at 2014 6:10 PM

2014-11-14T18:10:11-05:00

SSgt B Mac, I think there is something to what you are saying. A colleague of mine just left the DoD contracting world because of two reasons:

1) positions were going away very quickly

2) the positions that remained were having their pay cut

I'm seeing it where I work as well. There's at least talk of cuts to contractor personnel. Some companies do their best not to let people go - they find them jobs elsewhere - but if they're losing contracts and contract positions, it only makes sense that they'll have to cut salaries or cut personnel, or possibly both.

Response by SSgt Private RallyPoint Member made Nov 14 at 2014 7:22 PM

2014-11-14T19:22:32-05:00

I can see this being more true than false. The job markets getting flooded because the military is pushing thousands out the door; and with so many qualified individuals companies are taking advantage because so many people need jobs. Very interesting to think about... but also forboding

Response by SSG Peter Muse made Nov 14 at 2014 9:43 PM

2014-11-14T21:43:33-05:00

I think we are coming off of nearly 20 years of continuous technical advances made in military systems. That lead to highly technical military members and supporting contractors. Now as the numbers begin to decrease, the number of highly skilled people in the market is soaring and that is driving salaries downward. We are currently recruiting for blue collar apprentices in the aviation industry and one of the top southern California schools' Dean asked me why we would want to take on apprentices and pay for years of training when we could get skilled journey level candidates right off the street who are willing to work at the lowest entry level wages. This is just one example of how abundance drives pricing.

Response by SSG Gabriel Lord, MHRD made Nov 14 at 2014 10:55 PM

2014-11-14T22:55:15-05:00

The talent market is already overflowing with folks looking for work. The military exodus, while a stiff injection of talent into the civilian workforce, may not have as significant of an impact as one might think in the way of numbers. Remember, a very small percentage of the American population volunteers for service. The biggest difference is, separating service members are typically more skilled. There's no shortage of people looking for jobs of which the supply fluctuates with market conditions as it always has. I'll admit, I'm not strongly versed in the happenings within the world of contracting but they know as well as us that a huge chunk of their talent comes straight from the military, many of who right now are willing to settle for less financially in order to simply secure a position.