tive or unfair now, our ability to attract and retain people will be greatly diminished in the future.

The recruiting, retention, and separation decisions we make today will influence the capabilities of our forces for many years to come. Our current performance and our plans in these areas are detailed in the following sections.

Recruiting

During fiscal year 1991, the services continued the recruiting successes of the recent past, bringing high-quality young people into the active components and achieving 100 percent of their recruiting objectives. The following table compares recruiting accomplishments in fiscal years 1990 and 1991:

TABLE 2.-Active Component Nonprior Service (NPS) Accessions by Service

With the ongoing reduction in the size of the military, the numbers of young people recruited dropped from 224,100 in fiscal year 1990 to 200,700 in fiscal year 1991-a 10-percent decline. This led to an overall improvement in recruit quality. The share of high school diploma graduates rose from 95 percent in fiscal year 1990 to 97 percent in fiscal year 1991; the proportion of recruits who scored average or above on the enlistment test (Armed Forces Qualification Test (AFQT) Categories I through III) increased from 97 percent in fiscal year 1990 to over 99 percent in fiscal year 1991. The percentage of high-quality accessions (high school diploma graduates who score in AFQT Categories I through IIIA) increased from 64 percent in fiscal year 1990 to 72 percent for fiscal year 1991.

Success in recruiting high-quality youth has continued through the first quarter of fiscal year 1992. Over the first 5 months of fiscal year 1992, 99 percent of all recruits were high school graduates, compared with 97 percent for the same period in fiscal year 1991. The percent of enlistees who scored in AFQT Categories I-III went from 99 percent in fiscal year 1991 to 100 percent for the same period in fiscal year 1992.

In fiscal year 1991, Reserve component recruiting experienced a slow-down as a result of Operations Desert Shield and Desert Storm. The Naval and Marine Corps Reserves accomplished their objectives; but the Army experienced a tougher nonprior service market, with potential recruits developing a "wait and see" attitude. Moreover, there were difficulties in recruiting to units that had been deployed, and some recruiters performed deployment-related tasks that took them away from recruiting; also, the halt in voluntary losses from the active force stemmed the flow of people to the reserves. Table 3 compares Reserve recruiting results for fiscal years 1990 and 1991.

TABLE 3. Reserve Component Enlisted Accessions by Service-Continued

In fiscal year 1991, 93 percent of enlistees joining Reserve components continued to be high school diploma graduates. The percentage of individuals who scored average or above on the enlistment test was only slightly changed for fiscal year 1991: Ninety two percent compared to 93 percent in fiscal year 1990. For the first 4 months of fiscal year 1992, 80 percent of Reserve component enlisted accessions were high school graduates, while 98 percent had average or above aptitude.

The fiscal year 1992 DOD-wide recruiting objective for active enlisted members is 214,900, a 4-percent decline from fiscal year 1990. The fiscal year 1992 Reserve recruiting goal for enlisted members is about 5 percent below the fiscal year 1990 level.

The number of officers entering active duty will decrease from nearly 27,000 in fiscal year 1989 to about 19,000 in fiscal year 1992-a 30-percent reduction. The decline will be shared among all of our commissioning programs: Service academies, Reserve Officers' Training Corps (ROTC), and officer candidate schools (OCS). Of the officers brought to active duty in 1992, 36 percent will be in the professional skills (e.g., physicians, nurses, attorneys, etc.), frequently by direct appointments; the remainder will come from the academies (16 percent), ROTC (39 percent), and OCS (9 percent). Commissioning programs will operate at reduced levels over the next several years, but the Department will sustain its ability to respond to short-term requirements for expanded production if needed.

The perceptions of today's youth concerning military service have an impact on recruiting. To assess these perceptions, the Department annually conducts the Youth Attitude Tracking Study (YATS). This survey asks a nationally representative sample of 10,000 young people about their future plans, particularly whether they are considering military service.

The most recent YATS results show a drop in the percentage of youth surveyed who indicated they would "definitely" or "probably" enlist in one of the services during the next few years. As displayed in the following table, 29 percent of 16- to 21-year-old men expressed enlistment propensity for at least one active duty service in 1991. This is a decline of 3 percentage points from the 1990 YATS survey result and reflects a decline of about 10 percent in the number of young men who expressed enlistment propensity. The decline in propensity is plausible, given the reduction in recruiting and advertising resources.

TABLE 4.-Trends in Positive Propensity to Serve on Active Duty for 16- to 21-Year-Old Males

Examination of enlistment propensity data since 1985 shows that the percentage of young people considering military service may possibly have reached a peak in 1989 through 1990. However, because of the Department's reduced accession goals for the next few years, a return of propensity levels to those observed a few years ago is unlikely to prove problematic.

We are optimistic about the health of future recruiting. However, there are many factors that can jeopardize recruiting success, including youth labor market variables (such as unemployment and pay) and youth population demographics. We are

also concerned that recruiting and advertising resources not be cut to an extent that would jeopardize our future recruiting success.

Funding for recruitment advertising, for instance, has been cut by more than 40 percent between fiscal year 1989 and fiscal year 1992, and current advertising fund reductions are far in excess of reduced accession goals. As a result, all of the services have reduced paid awareness advertising. The Army and Marine Corps will be the only services with paid television advertising in fiscal year 1992. The Joint Recruiting Advertising Program, which was designed to be the corporate advertising voice of the Department, currently has no resources for paid television advertising. Table 5 depicts the decline in advertising resources since fiscal year 1989.

Although recruiting is going well, past experience indicates that success is fragile and requires sustained support. Our recruiting success now is in large measure a product of sufficient resourcing in the 1980s. Resources for fiscal year 1993 and beyond must provide a balanced mix of recruiting personnel, enlistment incentives, and funds for recruiting support and advertising to sustain recruit quality and provide nationwide exposure to military opportunities.

Retention

Our goal continues to be retention of those who are best qualified to serve. To do this, we have to continue to provide challenging and viable opportunities for professional development and career advancement. During the last decade, retention patterns have been healthy. We attribute this primarily to the dedication, sense of contribution, and accomplishment of our military members; a renewed popularity of the military; improved pay and compensation; and improvements in programs designed to maintain a stable living environment for our people. However, we anticipate that there will continue to be retention shortfalls in selected critical specialties, such as mid-grade pilots, nuclear-trained members, medical personnel, and certain mission-critical and highly technical enlisted specialties. These shortages will require intensive management to meet future retention goals.

Incentives like selective reenlistment bonuses, aviation career incentive pay, aviation retention bonuses, nuclear retention bonuses, and medical bonuses continue to be the most effective and efficient tools for meeting retention goals in our most critical skills. As we reduce the force, these programs will remain influential in helping the services align their personnel inventories with the emerging force structure; protect extensive training investments in highly technical skills; and avoid the substantial accession, training, and readiness costs associated with replacement of seasoned professionals.

We are sensitive to the impact of reductions on minorities and women. We anticipate that minorities and women will constitute about the same percentages of the future force as they do now. We will especially consider the role of women during the coming year as we support the Presidential Commission on the Assignment of Women in the Armed Forces and evaluate issues involved with expanding opportunities for women in combat aircraft.

Separation

We have developed policies designed to retain by grade, skill, and experience the highly qualified individuals we need, while treating those who are separating with compassion and fairness.

The voluntary separation programs authorized in the Fiscal Years 1992-1993 Defense Authorization Act will be instrumental in stimulating voluntary separations, and we thank this subcommittee for its invaluable work in enacting these programs. The Voluntary Separation Incentive (VSI) and the Special Separation Benefit (SSB) will minimize the involuntary separations that might otherwise have been required to align existing personnel inventories with the smaller force structure. These incentives are being offered to service members with 6 to 19 years of service, in career fields and year-groups for which existing inventories exceed future requirements. Individuals offered these incentives have the option to apply for either VSI or SSB; if their applications are approved, recipients will he separated from active duty and transferred to a Reserve component.

Initial offers of VSI/SSB are currently being made by the services to over 230,000 eligible members. The voluntary separation programs allow those members to make choices about the length of their careers. Naturally, those should be informed choices, and the Department is working to ensure that everyone serving in the Armed Forces understands these important programs. Explanations of our implementation procedures are in place, and thousands of members already have volunteered to separate. Further offers will be made as necessary.

We will also continue to use early retirement authorities to reduce and reshape the force and will take maximum advantage of the expanded selected retirement authority provided by Congress. While these expanded authorities cause us to deviate from normal retirement policies, they are necessary to ensure a balanced force reduction. At the same time, we are more carefully controlling the number of people who move into the career force following completion of initial service obligations.

Although most of our reductions will be accomplished through voluntary means and early retirements, the timing, scope, and magnitude of the reductions may require the involuntary separation of some who are not eligible to retire. While the Department will use VSI/SSB to the extent possible, the consequences of not using involuntary authorities, when voluntary approaches have been exhausted, could be severe. For example, retaining senior people who would be excess to the new force structure would reduce advancement opportunities for younger service members. This would affect morale, and cause many of our brightest young people to leave the military. We intend to mitigate the impact of these involuntary separations, if they become necessary, through maximum use of the transition benefits, such as separation pay and extended medical care, authorized in the Fiscal Year 1991 Defense Authorization Act.

In addition to these benefits, we have put in place Operation Transition to equip service members with the skills, tools, and self-confidence necessary to begin successful civilian careers. Integral to this effort are the standard automated tools we have worked with the services to develop and place in each family center or transition office. These will be available to all separating service members and their spouses across the United States and overseas.

The Defense Outplacement Referral System (DORS) is an automated registry and referral of military, civilian and spouse applicant mini-resumes to other Defense installations, other Federal agencies, and the private sector. So far, DORS has been very well received. In August, we sent out 800 letters to major corporations, large trade associations, military and veterans' organizations, and State Governors describing the system; and their response has been enthusiastic. Since our announcement of DORS in October, we have also had numerous inquiries from Federal agencies and their personnel offices seeking additional information.

Another automated feature of our transition program is the electronic bulletin board in family centers that allows employers to place ads for employment openings. In addition, the Transition Bulletin Board enables States to provide information on opportunities and veterans' services; allows military, veterans', and civic as

sociations to post information; and makes other announcements pertinent to transition.

We plan for the last of the automated tools to be available in late spring. A standard DOD document will be provided to all eligible military separatees verifying their military experience, training history, associated civilian equivalent job titles, and recommended educational credit information. This Verification of Military Experience and Training document will assist service members in verifying previous experience and training to potential employers, writing their resumes, interviewing for jobs, negotiating credits at schools, and obtaining certificates or licenses.

Another important component of the transition effort is the Transition Assistance Program (TAP)/Disabled TAP (DTAP) sponsored by the Departments of Defense, Labor, and Veterans' Affairs. Currently, a series of career options and veterans' benefits workshops are being conducted on a routine basis at over 125 military installations across the United States. We project that these workshops will be available at 178 installations in fiscal year 1992.

Another cooperative effort that has been a success is the All Veterans Job Fair. The Office of Personnel Management and the Departments of Defense, Labor, and Veterans Affairs sponsored five job fairs across the United States and are currently discussing conducting them overseas. An average of 4,000 personnel at each job fair have requested information on current and projected transition programs.

In conjunction with the transition assistance program, we will continue to improve and automate relocation assistance on each installation. The fiscal year 1993 budget provides a basic level of relocation services in family centers. We are also establishing a joint service relocation training school for staff and continue to make progress in networking installations through a joint services computerized information network.

As with military personnel, we are trying to keep the number of civilians involuntarily separated to a minimum; however, the dynamics of funded workload, mission, and turnover prevent us from accurately predicting the number who will be affected by a reduction-in-force (RIF). Prior to fiscal year 1990 when the Department's major personnel reductions began, we still ran RIFs to adjust for workload and skills imbalances in organizations. As a result of these types of RIFs, we involuntarily separated 750 employees in fiscal year 1988, 400 in fiscal year 1989, and 1,300 in fiscal year 1990. Involuntary separations rose to 5,000 in fiscal year 1991, primarily because of workload and budget reductions.

To minimize the actual number of involuntary separations, we have taken a number of actions. Our civilian reduction plans include restrictions on hiring from outside the Department, voluntary attrition, innovative outplacement efforts, and our internal Priority Placement Program.

The Department imposed a civilian hiring freeze in December 1989, allowing just a few exceptions for certain categories of critical employees (for example, those hired in support of Desert Storm) and relying on voluntary attrition to achieve our reduction targets to the greatest extent possible. In March of last year, we modified these hiring restrictions to provide more flexibility within overall budgeted employment levels. By the end of January 1992, under these hiring constraints, civilian employment had fallen by over 87,000 from its December 1989 level.

The DOD Priority Placement Program (PPP) continues to be the backbone of our placement efforts for civilians within the Department. Any DOD employee adversely affected by a work force reduction is automatically registered in the PPP. A computer listing of all registered employees is issued on a bi-weekly basis to each of 760 DOD activities that employ 50 or more civilians. When a registrant qualifies for a particular vacancy in an area where he or she is willing to relocate, he or she is offered the position. If the individual accepts the offer, we pay any relocation expenses involved. If the registrant declines a valid offer, he or she is dropped from PPP rolls. In other words, a registrant typically receives only one job offer, but-by definition-it is a job offer that should be acceptable.

The Priority Placement Program has been most successful, placing over 100,000 employees since its inception in 1965. It is an integral part of a comprehensive DOD strategy-ranging from hiring limitations and attrition to voluntary outplacement and mandatory internal placement mechanisms for dealing with civilian reductions in a positive and sensitive manner.

As required by the Fiscal Years 1992-1993 Authorization Act, we will, in conjunction with the Department of Labor, report later to you on steps taken to assist civilian employees adversely affected by base closures and realignments. Last year we made an agreement with Labor to transfer $150 million to them for job search, job placement, or vocational retraining needed by workers dislocated because of reduced Defense spending. This funding was provided in the Fiscal Year 1991 Defense Ap