Workforce Downsizing and Restructuring in the Department of Defense

Beth J. Asch, James Hosek, Michael Mattock, David Knapp, Jennifer Kavanagh

"The U.S. Department of Defense (DoD) plans to reduce the size of its civilian workforce through 2021. An important downsizing tool available to personnel managers is the Voluntary Separation Incentive Payment (VSIP), but its cap, $25,000, has not been adjusted since 1993. The authors of this report used RAND's dynamic retention model (DRM) for DoD civilians to compare the cost-effectiveness of alternative approaches to achieving a given downsizing. These include packages of VSIP, voluntary early retirement authority (VERA), and involuntary separation if also needed, versus using involuntary separation alone. Increasing the VSIP cap to $41,000 (the real value of VSIP in 2015 dollars) increases voluntary separations by about 45 percent and, compared with the $25,000 cap, would result in greater net savings to DoD and greater net savings in government outlays over five years. Although...