current group ofOur people are doing all they can for our country -- putting in long hours, being separated from their families, giving thatthe little bit extra effort when needed. Yet, we continue to ask them for more. As we continue the transition from a forward-based force to an expeditionary force, we are deploying more of our people than ever to achieve the nation’s objectives. In fact, we have four times more people deployed today than when the Cold War ended. This situation is all the more impressive in light of the fact that we also have 34 percent fewer active duty military members than we had in 1989. Our ability to continue meeting the challenges of the future is predicated on recruiting and retaining the same high caliber men and women we have in the past.

We are proud to report that the Air Force met its FY97 recruiting goal with high quality men and women. The Air Force enlisted a total of 30,200 first-time enlistees of whom 99 percent were high school graduates and 79 percent scored above average on their enlistment test. We also enlisted 110 prior service men and women to fill critical skills. We entered FY98 with 44 percent of our 30,000 enlistment goal in the Delayed Entry Program, slightly above our target of 43 percent. Table 1 displays the Air Force active duty recruiting results for FY97 and projected accessions for FY98 and FY99.

Table 1

Our FY97 enlistee quality was the highest in DOD. Despite this success, the percent of our enlistees scoring in the top half on the Armed Forces Qualification Test dropped (down to 79 percent from 88 percent in FY89). We also experienced a drop in the average mechanical aptitude score of our enlistees. Table 2 displays the trends in percent of enlistees scoring in the top half of the Armed Forces Qualification Test and average mechanical test scores. To address these trends, we have directed our recruiters to concentrate their efforts on the college and college-bound candidates. Additionally, we have directed a larger portion of our advertising budget toward the technical market and have raised enlistment bonuses in the most difficult-to-fill skills.

Table 2

While we continue to meet our recruiting goals, the challenges our recruiters face also continue. Ample opportunity to attend college and a robust economy have effectively shrunk the pool of qualified and interested potential recruits. This is verified in the drop in young people’s propensity to serve as noted in annual youth attitude surveys-- young men from 17 percent in 1989 to 12 percent in 1994, where it has stabilized over the last several years, and young women from 7 percent to 6 percent in 1997 (Figure 1).

Figure 1

Given the challenging environment our recruiters face, we are committed to giving them what they need to get the job done. In 1995, we added 116 additional recruiter authorizations to the field and First Sergeants in each squadron to handle mounting personnel and administrative tasks. In addition, thanks to the Congress, we were able to increase Special Duty Pay from $275 to $375 per month for each produc- tion recruiter. Another significant advancement is providing laptop computers and cell phones as we move to a web-based recruiting information support system which will bring our recruiting technology into the 21^st century. Further, we modified our housing policy to give recruiters priority for on-base housing (including our Sister Service bases) and we continued our leased housing program for recruiters in high-cost areas where no military housing is available.

The Air Force must continue to recruit high quality men and women capable of handling emerging technologies to lead our Service into the future. Ample advertising funding and support for our recruiting mission is critical to the future of the Air Force.

Once we recruit the right people into the Air Force and train them, we must keep them to maintain our readiness posture. The increased operations tempo experienced over the past five years, coupled with a robust economy, is challenging our ability to retain highly motivated and technologically adept airmen.

We are addressing deployment and home-station tempo levels by prioritizing and reducing the number of deployments and exercises, reducing the scope of Operational Readiness Inspections (shorter durations with fewer inspectors), investigating the option of conducting inspections in conjunction with deployments, and reducing inspection activity by using sampling techniques. We have also eliminated Quality Air Force Assessments. To help our men and women become reacquainted with their family and friends following deployments, our Major Commands have implemented post-deployment stand-downs tailored to fit their respective needs.

Support to families of deployed members is of special interest to us. We recently added Readiness NCOs to all 84 of our Family Support Centers to help families cope with deployment-related separations. Additionally, we completed testing a unit OMBUDSMEN concept to augment traditional support. Results of the test are positive as revealed by the comment of a deployed member’s spouse who said, "I know now that there is someone out there who’s truly there to help." We have also tested video links between deployed members and their families. As of February 1998, we conducted successful tests at over 40 locations. This initiative met with a positive response -- a deployed First Sergeant said, "I’ve never seen a better morale booster."

In FY97, we saw a decrease in all categories of officer retention as shown in Table 3. Although navigator and non-rated officer retention rates have declined, we remain at sustainment levels and do not project shortages in the next few years.

Table 3

The decline in pilot retention is cause for concern. Our retention rate of 71 percent in FY97 is down 6 percent from FY96 and down 16 percent from our all-time high of 87 percent in FY95. Causing even greater concern is the fact that all three of our leading pilot retention indicators point to a very challenging environment.

The first indicator is the Aviator Continuation Pay take rate. We experienced a significant drop in the number of pilots accepting Aviator Continuation Pay from 59 percent in FY96 to 33 percent in FY97 as shown in Table 4. In fact, our Aviator Continuation Pay take-rate has now dropped 48 percent from 81 percent in FY94.

Table 4

Although the 33 percent take rate for FY97 concerns us, it is an improvement over the 30 percent take rate which we experienced prior to retroactively allowing pilots to accept the Aviator Continuation Pay increase which you provided in the FY98 National Defense Authorization Act, along with a 3-year variable length contract option. Your action in providing retroactive authority helped retain an additional 100 pilots who had previously declined the bonus. Thirty-two of those accepted long-term contracts, including two who withdrew their decisions to separate. The remaining 68 pilots accep- ted short-term contracts. In total, our FY97 take rate grew to 43%. Although long-term contracts are preferable, short-term contracts help keep pilots who are currently unwil- ling to make a long-term commitment. Our goal is to keep these pilots long enough to allow other retention initiatives to take effect and hopefully convince them to stay for the long term. Thank you for your support of our initiative which restored the original incentive value of this critical program and allowed for its retroactive application.

It is still too early to predict the impact of the increased Aviator Continuation Pay on FY98 pilot retention. As of March 1998, only 26 percent have become eligible. Of those, 46% have accepted Aviator Continuation Pay; however, only 29% have accepted long-term contracts. Nearly 40 percent of our FY98 eligibles will not become eligible until the last quarter of FY98.

A second leading indicator is pilot separations, which are increasing at a signifi- cant rate. While approved separations jumped 27 percent from FY96 to FY97, they are up 85 percent this year compared to the same time last year. This represents 775 pilots already approved to separate during FY98, compared to 632 actual separations for all of FY97. This is more disheartening when you realize there are 2,343 pilots eligi- ble to separate in FY98, but that grows to 4,237 who will decide to stay or go in FY99.

The third leading indicator of pilot retention, major airline hiring, peaked at 3,854 in FY97. This represented a 45% increase over FY96. We project major airline hiring to range between 2,000 and 3,000 throughout the Future Year Defense Plan.

We are currently projecting a pilot shortage of 836 in FY98, and could have a shortage as high as 1,410 in FY00. We are aggressively addressing this situation. In April 1997, the Air Force’s senior leadership approved a gameplan designed to improve pilot retention. The increase in Aviator Continuation Pay, combined with the authority to increase Aviation Career Incentive Pay (from $650 to $840 per month for 14-22 years of service) beginning in 1999, is an integral part of this gameplan.

In addition to restoring compensation programs to original levels, our plan focuses on reducing tempo, further increasing pilot production, reducing rated require- ments, improving support to families of deployed personnel, and improving personnel programs. Many of these initiatives will also positively impact the entire officer and enlisted force. We are continuing to monitor the effects of this gameplan; however, if pilot retention worsens, it may directly impact the readiness of our combat units.

Within the enlisted force, first- and second-term reenlistment rates have declined over the past three years, while reenlistment rates for career airmen have remained relatively constant, as shown in Table 5.

Table 5

Although the FY97 first-term reenlistment rate of 56 percent was above our goal of 55 percent, we’re monitoring it closely since the rate is down 7 percent from FY95. First-term reenlistment data for the first quarter of FY98 is encouraging at 57%. Our FY97 second-term reenlistment rate of 71 percent was below our goal of 75 percent, and down 6 percent from FY95. First quarter FY98 data shows an additional decline of 2 percent. This is cause for caution, as our second-term airmen are our skilled techni- cians. At the end of FY97, 114 of 378 enlisted specialty codes were below the 75 percent goal for second-term reenlistments. These shortages include second-term reenlistments in all four functional areas: operations, logistics, support, and medical. For example, the second-term reenlistment rate for our electronic warfare system specialists is 57%, for air traffic controllers is 66%, and for security forces is 69%.

To address shortages we’ve experienced in reenlistments, we’ve doubled the number of Selective Reenlistment Bonuses (SRBs) and increased Selective Reenlistment Bonus rates in specialties where manning and retention rates are lowest. In FY95, we provided SRBs for 41 skills at a cost of $24 million; today that number is 88 skills at a cost of $33 million. We greatly appreciate the support you’ve provided in making this possible by funding the Selective Reenlistment Bonus Program.

Between now and FY01, 91 percent of our enlisted force will make a retention decision. We are investigating options to positively influence those decisions. The 1997 CSAF Survey, in conjunction with a 1998 Readiness Integrated Process Team and a 1998 Enlisted Retention Workshop, have helped us identify the factors most affecting enlisted retention. Not surprisingly, high tempo tops the list. Other factors, such as compensation, retirement, health care, housing, and education highlight the importance of robust Quality of Life programs.

current group ofWe must ensure an adequate quality of life (QoL) for members and their families. QoL programs strive to mitigate the impact of the increasing demands we are placing on our people and are intended to create an acceptable service-life environment, enabling us to recruit and retain the skilled and experienced people required in the world’s preeminent aerospace force. Your support of our ongoing efforts to provide a reasonable quality of life for our members and families is greatly appreciated and reflects your acknowledgment of the increasing sacrifices they are making in support of our country.

We recently canvassed our field leadership regarding the impact quality of life issues have on readiness and retention in their units. They responded by revalidating the seven areas we have been focusing on for the past several years: compensation and benefits, balanced tempo, health care, housing, retirement, community and family support, and educational opportunities. I will address our goals in each.

Pay and compensation are important to everyone. We appreciate Congressional support for both aviator continuation and aviation career incentive pays already addressed. Our enlisted flyers also recognized the increase you provided in Hazardous Duty Incentive Pay (HDIP). We applaud your efforts to enhance compensation for our critical enlisted aviators by increasing the minimum rate of HDIP. It is important to realize, however, that the increase in HDIP, the first since 1985, only affected a very small segment of our enlisted flyers. Specifically, our four most junior enlisted ranks received the increase that averaged $25 to $40 per month depending on rank. We are also concerned about retaining our mid-level and senior enlisted aviators who represent the core of our force and provide the ability to train recruits and meet our readiness requirements. We are beginning to experience difficulty in supporting requests from our theater combatant commanders because of shortages in these mid-level enlisted flyer positions. It is imperative that we act now to increase their compensation to obviate future problems.

Tempo is identified by commanders, First Sergeants and Major Command leadership as the most pressing readiness issue. As stated before, four times more members are deployed today than when the Cold War ended in 1989 and we continue to examine ways to alleviate this strain. Air Force leadership realizes that a day away is a day away whether on deployment overseas or a training exercise within the United States, and our goal is to limit this tempo to no more than 120 days away per year.

We are also very cognizant of the burden this tempo places on the home station, where less people often have to pick up the work left behind. This was verified by our 1997 Chief of Staff Quality of Life Survey that showed the average hours worked per week increased from 47 to 50 per person over the last year.

The continuing evolution in health care delivery is a critical component of our QoL landscape. TRICARE is designed to ensure military families – active duty and retired – receive the appropriate care and procedures they require. By implementing TRICARE, the Air Force Medical Service is able to optimize quality, cost, and access to care, while offering beneficiaries a choice of health care plan options.

Unfortunately, TRICARE still remains unavailable to Medicare-eligible benefici- aries. However, thanks to Congress, a three-year Medicare subvention demonstration project will be tested at six regional sites in the Continental United States starting this summer. While a limited number of Medicare-eligible beneficiaries will be allowed to enroll in the initial demonstration project, it is an important first step in providing seamless health care to all our beneficiaries.

The Air Force also supports the preservation of civilian employees’ access to quality, affordable health care--both for themselves and their families. The Air Force appreciates Congressional interest in health care issues and their efforts to maintain the availability of care for civilian employees at a reasonable cost. In the five year period from 1990 to 1995, the average monthly employee out-of-pocket cost for family coverage increased 20 percent.

The stress associated with downsizing and increased operations tempo remains a challenge for military and civilians alike, and we are responding with a variety of force enhancement initiatives, such as tobacco cessation classes and individual fitness prescriptions. To support these programs, we are establishing Health and Wellness Centers (HAWCs) at every Air Force installation. We now have HAWCs on 53 bases and installation fitness program administrators to help members improve their fitness at 70 bases. Our HAWCs provide "one-stop shopping" for health promotion and fitness assessment. These efforts are paying off, as we are beginning to see a decrease in smoking and an increase in fitness rates in our active duty force.

Access to Safe, Affordable, and Adequate Housing

Survey results and field commanders indicate the adequacy of living quarters makes up a large portion of quality-of-life perceptions among our military members. People will gladly go anywhere in the world for us as long as they know their families have a safe place to live and are taken care of while they are gone. For this reason, we applaud Congress’ consistent efforts to provide funding for housing and housing allowances to maintain reasonable housing standards for our people and their families.

Our efforts to eliminate gang latrine dorms by FY99 and the new "1+1" dormitory standard are drawing rave reviews from the troops in the field.

We are committed to maintaining a stable, inflation-protected retirement system for our people to partially compensate them for the tremendous demands we place on them during their careers. In the past, the military retirement system has proven to be an indispensable force management tool for the Air Force. However, the effects of the 1980s reforms to the military retirement system are now manifesting themselves. Our surveys indicate that the military retirement system has lost some of its pull. Our career-minded military personnel are no longer rating retirement as their number one reason for staying in the military. In a recent survey, retirement had slipped to the number three ranking behind job security and medical care. We’re concerned that our primary retention tool has been diminished to a point that long-term retention could be adversely affected.

In our strategic planning, the Air Force recently reaffirmed a commitment to preserve a "sense of community" at our bases and to maintain high quality of life standards. The installations where our people live and work serve not only as the platforms for launching aerospace power, but also a central component in defining who we are as an Air Force. The sense of community created by Air Force communities taking care of Air Force families is critical to our ability to achieve its mission.

With ever-expanding, world-wide commitments, the Air Force continues to see a strong connection between mission accomplishment and family readiness. Our robust Family Support, Child Development, Fitness, and Youth programs are essential to our community readiness posture.

Our young recruits continue to tell us education benefits are their prime motiva- tion for entering the Air Force. By providing voluntary professional and personal oppor- tunities through Tuition Assistance and our installation continuing education programs, we enhance our mission readiness. With advanced education, our people are better able to perform in today’s fast-paced, high-tech world. They’re also prepared to assume greater roles in a smaller but more efficient Air Force.

The Air Force is committed to promoting equal opportunity and treatment (EOT). We recognize the special responsibility associated with service to our nation and must ensure unit effectiveness and mission readiness while promoting individual opportunity and fairness. It is an integral part of the Air Force’s commitment to core values -- "Integrity First, Service Before Self, and Excellence In All We Do."

The Air Force was the first service to conduct mandatory sexual harassment training in 1982. Most recently, as of February 1998, we have trained over 347,000 military and civilian personnel, including our senior leaders, in an effort we call EO-2000 to reemphasize the importance of equal opportunity. Since 1985, we have incorporated sexual harassment training into all human relations courses and have since conducted two complete reviews and constant revisions to ensure our lesson plans are accurate and complete. The training and awareness have paid off -- our total number of EOT complaints has dropped each of the last four fiscal years. There were 904 complaints during FY94, 810 during FY95, 676 during FY96 and 607 during FY97.

If our personnel experience unlawful discrimination or harassment, we strongly encourage them to use the chain of command first to resolve issues informally. If informal intervention is not successful, our personnel can file a formal Equal Employ- ment Opportunity (EEO) or EOT complaint. Commanders may request unit assess- ment visits to evaluate the climate of their organization. Having just completed a climate assessment of my staff in January, I can personally attest to this tool’s value.

Our Air Force pamphlet, Discrimination and Sexual Harassment, contains advice for members who may face a problem with discrimination or sexual harassment. This is another means to ensure our people remain aware of the issues impacting productivity, morale and readiness. The pamphlet is even available on the Internet.

Leading and managing the world’s finest aerospace force will remain a challenge in the years ahead. Propensity to enter the military is down and the "pull" to leave the Service due to a good economy is up. The recruiting and retention success we’ve achieved to date are due in part to the quality of life programs we have been able to implement with your assistance. We must maintain this momentum.

As you consider the FY99 budget proposal, we believe it is vitally important to remember the sacrifices our military members have made for our country. They’ve gone where we’ve asked--deploying anywhere in the world at a moment’s notice, and they have responded by doing their jobs better than any other Air Force in the world. They are some of America’s best, and we must recognize their efforts and maintain our readiness by providing a reasonable standard of living for them and their families. We’re not asking that our peopletroops enjoy "the good life," but rather we seek to provide enough to recruit and retain the best and brightest America has to offer. You’ve provided many of the tools we’ve needed, but your continued support of our efforts is critical to maintain the momentum we have established in this endeavor.