Fewer Hands on Deck

Chief of Naval Operations Adm. Vern Clark wants to reduce the Navy's ranks by tens of thousands in the next six years. Clark says his reforms will mean a more powerful Navy. The sailors who remain will be able to choose their jobs and will receive more and better-targeted training. Commanders will for the first time be responsible for their personnel budgets. New technologies and designs for ships will radically reduce the need for crew. "It became clear to me if we didn't do something about running this organization more efficiently and more effectively, that we were not going to have the Navy we needed in the future," Clark says.

All three military services want to do more with less and are struggling to stretch funds, equipment and personnel. The Army is remaking its divisions into lighter, more agile combat brigades and relying on the National Guard for combat support. The Air Force has organized its airmen into expeditionary forces that deploy three out of every 15 months. But the Navy is taking a more radical approach, inspired by corporations that have attempted to improve profit and productivity by slashing staffing while improving the management of those who remain.

Clark's effort builds on the work of former Navy Secretary Richard Danzig, who championed smart-ship technologies and began eliminating some of the Navy's most menial jobs, such as chipping paint off decks. Clark is attempting to extend those reforms and make them permanent by tying them directly to the Navy's ability to wage war.

Applying efficiency and effectiveness standards to personnel management is a big change for the Navy. Two-thirds of the sea service's 900,000 sailors, civilians and contractors work in support jobs ashore-during last year's war in Iraq, only about half of all uniformed Navy personnel were deployed. Traditionally, a third of sailors have had no voice in their job assignments. Most of the service's ships were built with little regard for crew size. Training programs were not designed to create a versatile force.

Clark says the Navy's "readiness-at-any-cost attitude" inefficiently uses personnel and has become too expensive. His Fleet Readiness Plan replaces the Navy's six-month sea tours with shorter, more frequent deployments and new maintenance schedules. In effect, the plan doubles the Navy's combat firepower by increasing the number of aircraft carriers available on short notice from three to at least six. Clark is trading people for flexibility, firepower and better weapons, and he's determined to ensure that the remaining force is more productive.

Pricey People

The Navy has nearly 300 ships, more than 4,000 aircraft and 22 home ports around the world, but spends most of its money on people. In fiscal 2005, the Navy proposes to spend about 65 percent of its $125 billion budget paying salaries and benefits, training costs and other expenses for 470,000 active-duty and reserve sailors, 180,000 civilian workers and an estimated 250,000 contract employees. Even with downsizing in recent years, the Navy has spent between 66 percent and 75 percent of its annual budget on people since the late 1990s. "Do we have the right number? I am not convinced we have anywhere near the right number," Clark says. He is determined to cut the payroll, to help pay for a modernized fleet. For every 10,000 active-duty sailor slots the Navy cuts, it will save $1.2 billion that can go toward buying more planes and ships, speeding up maintenance schedules, and hiring more contractors for short-term jobs, he says.

The Navy has a tradition of attempting to solve problems by throwing people at them. For example, the Navy's Spruance-class destroyers first sailed in the mid-1970s with 225 sailors, but today the ships-which will be phased out by the end of the decade-commonly have crews of more than 350. "We had difficulty making [the ship] work the way we wanted, and we progressively added more people," Clark says. "We have designed capabilities into it that we never really did harvest the benefits from." Clark commanded one of those destroyers in the mid-1980s.

The Navy has two wide-ranging efforts under way to locate excess staff. One is scrutinizing 600,000 onshore jobs; the other will create a database of the skills needed for every enlisted position and attempt to better match sailors with jobs. Both will provide data crucial to trimming the uniformed ranks to 357,000 by 2009.

Rear Adm. (Select) Robert Cox, the Navy's director of total force programming and manpower, leads a task force reviewing all work performed ashore by uniformed, civilian and contractor personnel. During the next four years, the task force will recommend alternatives for getting shore work done. They could include assigning jobs now done by sailors to civilians, contracting out some support work and eliminating other jobs altogether. "There probably is a lot out there that could be done more efficiently and effectively," says Cox. "We have a larger footprint than we need based on years of progress in technology and processes that the Navy hasn't take advantage of." The Navy's Southwest Region in San Diego, which provides base operating support for all eight naval installations in California, Arizona and Nevada, has cut staffing from 6,200 in 1997 to 2,150 today.

Cox's task force also will count Navy contract workers. Clark has said his best guess is that the Navy employs 250,000, but he's not certain because the service lacks a central system for tracking contractors. Navy personnel chief Vice Adm. Gerald Hoewing likens contractors to reservists who can be brought in quickly for a short-term assignment and then let go. The Navy can hire contract workers at a shipyard for a few months to make quick repairs on a ship deploying on short notice.

Henry Griffis, an expert at the Center for Naval Analysis, a nonprofit independent think tank, says the Navy's outsourcing of support work reflects private-sector trends. "The Navy should pick out its core responsibilities, roles and functions, and then some of those shore functions could be farmed out," he says.

In the second initiative, Capt. Steven McShane, deputy commander for the newly created Task Force Sea Warrior, is leading a review of all enlisted jobs as part of a larger effort to update the service's human resources strategy. Eventually, the Navy will create a database of the skills enlisted jobs require and compare them with fleet priorities. Ultimately, the database will allow Navy leaders to easily identify shortages and excesses of skills and people, McShane says.

Increasingly, the Navy is asking commanders who rarely have worried about personnel costs to consider them. "We've said, 'Understand the cost and drive the unnecessary costs out,' " Clark explains. For example, Vice Adm. Michael Malone, who oversees both the readiness and cost of naval aviation, has explained to aviators that the high price of keeping existing aircraft manned and flying has kept the Navy from buying new airplanes.

In an effort to drive down costs and reduce the need for people, the Navy is buying new technology and changing the design of ships. In 2005, the service will award a contract for the next generation of surface ships to replace today's destroyers. They will feature automated navigation systems, reducing the need for crew on the bridge. They'll be designed with fewer corners and maintenance-free deck coatings, wiping out swabbing. The Navy has told contractors vying for the multibillion-dollar deal that crews must number fewer than half the 350 people serving on each destroyer today.

In June 2003, the General Accounting Office reported that trimming crews would save the Navy $600 million over the 35-year service life of each ship, $18 billion if it buys 32 ships as planned (GAO-03-520). Fielding the new Joint Strike Fighter also will bring savings: It requires less maintenance and can fly farther without refueling than current Navy fighters can.

Auctioning Jobs Online

Even as he's presiding over a reduction in the force, Clark is moving to improve the careers of the sailors who survive the cutback. He says that better training, giving sailors more say in their career choices and making them compete for jobs will produce a more seasoned and mobile Navy. The goal is to increase the number of enlisted personnel in senior positions from 69.9 percent in 2000 to 75.5 percent by 2007. "A force that's richer in experience is going to require less supervision," Clark says. "It's going to allow us to be more output-oriented and more effective."

For decades, the Navy has sent enlisted sailors wherever they were needed, regardless of whether they or their families wanted to go. Sailors call it "slamming." In fiscal 2003, roughly a third of enlisted sailors were slammed into jobs. Clark wants this practice eliminated because he believes it breeds disgruntled, unproductive sailors eager to leave the service. So far during fiscal 2004, only 2 percent to 3 percent of jobs have been filled by slamming.

Traditionally, personnel specialists, known as detailers, have assigned jobs to sailors. Detailers search a database for sailors whose skills and availability match job openings. Clark wants to turn that process around. "I want the power of choice to be with the sailor, as opposed to the . . . detailer," he says.

As a result, the Navy has created an online job auction site. The service posts hard-to-fill jobs online and asks sailors to bid for them. Sailors can set their own salaries for work no one else wants. Some bid higher than standard salaries; others don't even seek extra pay. For example, an information technology specialist willing to move to Japan won an extra $350 per month in salary. Overseas assignments, such as the posting in Japan, typically are hard to fill because sailors don't want to move their families out of the United States. An aviation personnel administrator for the Navy's new F-18 fighters at the Naval Air Station in Lemoore, Calif., won an extra $150 a month using the online auction site.

The Navy caps incentive pay at $900 a month over the normal salary. Jobs remain open for online bidding for two weeks, and sailors can reduce their bids during that time to beat lower offers. Sailors are permitted to bid on as many six positions per month. Detailers have a say in who gets each job, but for the first time, ships and organizations offering jobs can review applicants' education and experience.

"Sailors definitely like [bidding for jobs]," says Chief Petty Officer Linnea Montford, a detailer for aviation administration positions at Navy Personnel Command in Millington, Tenn. In the past, Montford says she often felt more like a saleswoman than a human resource specialist as she pitched the career benefits of unpopular jobs.

Since the electronic bidding began in 2003, the Navy has posted 7,508 jobs, received 2,920 applications and filled 794 positions at average of $254 over normal salary per month, says Tony Cunningham, a research analyst for the Navy's Personnel Research, Studies and Technology Office. Most of the online positions have been shore-based information technology jobs in Italy, Japan and Sicily. The air station in Lemoore is the only stateside installation posting jobs so far. The Navy sought and won congressional approval to offer additional pay and has budgeted about $150 million to cover salary increases due to the auctions during the next five years. All Navy jobs might one day be posted online, Cunningham says.

Clark says that paying sailors a few thousand dollars in extra salary annually is a good deal compared with losing them because they were forced into jobs they didn't want. Recruiting each new sailor costs $12,000. Moreover, the online auction demonstrates the growing importance of performance and education.

Eventually, enlisted sailors with mediocre work records or limited training will find themselves without chances for promotion and out of the Navy, while top performers who seek extra education and a broader range of assignments will be able to advance more quickly.

Smarter Sailors

In the past, enlisted sailors weren't encouraged to earn college degrees because they were believed to be more likely to leave the service. But the Navy has found that sailors earning 60 or more college credits within their first five years in uniform are nearly twice as likely to re-enlist as those who take classes.

Within a decade, Clark says, a sailor will not be able to rise to a senior enlisted rank, such as chief petty officer, without a college degree. Today, only about half of them hold degrees. Task Force Sea Warrior chief McShane says the Navy is creating for every enlisted sailor a career development plan laying out the experience and education needed to rise in rank. All sailors should have college degrees or professional certification because the smaller, more technical Navy will demand a better educated workforce, he says.

The Navy is reforming the 76 very specific job codes, known as rates, that tie sailors to career fields. For example, there are separate rates for electronic technicians on submarines and on surface ships. McShane says the service will consolidate or eliminate rates in favor of more generic job descriptions freeing sailors to serve in more varied positions. A sailor now rated as a submarine electronics specialist might be deemed simply an electronics technician who, with extra specialized training, could work on an aircraft carrier or at an installation ashore.

McShane says the move would not only make sailors more mobile, but also could save the Navy hundreds of millions of dollars by combining training facilities. A plan for consolidating all the Navy's basic engineering courses at a single center could save as much as $200 million over the current system of running separate engineering courses for various classes of ships and submarines. Sailors also could receive specialized training through less expensive Web-based programs, McShane says.

Clark concedes his personnel reforms are only the first of many changes that will continue well beyond his term as CNO, which is expected to end in 2006. "My task is to lay the foundation for what is going to be incredible change in the way sailors are grown and treated, what their standing is," Clark says. "Ultimately, this Navy, with the same number of ships and airplanes in it, will have somewhere around half the number of sailors."