Feasibility study to update annualized cost of leaving (ACOL) procedures at the Navy Personnel Research and Development Center (NPRDC)

Abstract

Accurate forecasts of officer retention rates are required in order to shape correctly the size and internal structure of the Navy manpower force through accession, promotion, and related policies. This study, conducted in 1987 for the Navy Personnel Research and Development Center (NPRDC), reviews existing forecasting and simulation methodologies and suggests new methods to implement in the future in order to improve forecasts of naval officer retention rates. The study also considers alternative sources of data to capture civilian earnings opportunities in the models. Two major types of models -- Annualized Cost of Leaving (ACOL) and Dynamic Retention (DR) -- are discussed in detail with respect to the ability to model and evaluate manpower policies of interest to NPRDC staff. A variety of other techniques which should be considered during the estimation stage are also discussed. The general study approach involved researching the subject area, the current data, the current models, and current estimation procedures. Available data and methodologies were then compared with the NPRDC problem in order to recommend potential solutions. This study did not include data collection or data analysis. This report is organized in eight sections. The Background Section discusses the history of officer retention models, themore » scope of officer manpower analysis at NPRDC, and NPRDC's history of officer loss-rate forecasting. Section 3 discusses the approach to model selection, which includes addition to a thorough discussion of the Dynamic Retention Model (DRM) and a comparison of the DRM and ACOL model. Section 5 presents alternative modeling directions for forecasting and a summary of compensation policy issues. The summary and conclusions appear in Section 6, and recommendations are in Section 7. References are in Section 8.2. 30 refs., 1 tab. (JF)« less