The Department of Defense (DOD) must recruit and retain hundreds of thousands of servicemembers each year to carry out its missions, including providing support in connection with events such as Hurricanes Katrina and Rita. In addition to meeting legislatively mandated aggregate personnel levels, each military component must also meet its authorized personnel requirements for each occupational specialty. DOD reports that over half of today's youth cannot meet the military's entry standards for education, aptitude, health, moral character, or other requirements, making recruiting a significant challenge. GAO, under the Comptroller General's authority (1) assessed the extent to which DOD's active, reserve, and National Guard components met their enlisted aggregate recruiting and retention goals; (2) assessed the extent to which the components met their authorized personnel levels for enlisted occupational specialties; and (3) analyzed the steps DOD has taken to address recruiting and retention challenges.

DOD's active, reserve, and National Guard components met most aggregate recruiting and retention goals for enlisted personnel from fiscal years (FY) 2000-2004. However, for FY 2005, 5 of 10 components--the Army, Army Reserve, Army National Guard, Air National Guard, and Navy Reserve--missed their recruiting goals by 8 to 20 percent. Most of the components met their aggregate retention goals for FY 2000-2004, but the Navy experienced shortages in FY 2005 of up to 8 percent. Also, factors such as the shrinking numbers of new recruits in delayed entry programs and the use of stop loss, which delays servicemembers from leaving active duty, indicate that the components may experience future recruiting challenges. All components exceeded authorized personnel levels for some occupational specialties and did not meet others. Specifically, GAO found that 19 percent of DOD's 1,484 occupational specialties were consistently overfilled and 41 percent were consistently underfilled from FY 2000-2005. While the components offered reasons why occupational specialties may be over- or underfilled, GAO believes that consistently over- and underfilled occupational specialties are a systemic problem for DOD that raises two critical questions. First, what is the cost to the taxpayer to retain thousands more personnel than necessary in consistently overfilled occupational specialties? Second, how can DOD components continue to effectively execute their mission with consistently underfilled occupational specialties? In FY 2005, almost 31,000 more servicemembers than authorized served in occupational specialties that have been consistently overfilled. GAO determined that it costs the federal government about $103,000 annually, on average, to compensate each enlisted active duty servicemember in FY 2004. In contrast, DOD was unable to fill over 112,000 positions in consistently underfilled occupational specialties, raising concerns about the validity of the authorized personnel levels. DOD requires the active components to report on critical occupational specialties for recruiting and retention, which amounts to at most 16 percent of their 625 specialties. However, DOD does not require them to report on their noncritical occupational specialties, and does not require the reserve or National Guard components to report on any of their 859 specialties. Consequently, DOD does not have the necessary information to develop an effective plan to address the root causes of the components' recruiting and retention challenges. DOD has taken steps to enhance recruiting and retention, but lacks information on financial incentives provided for certain occupational specialties. GAO found that the components offered financial incentives to servicemembers in consistently overfilled occupational specialties. However, because DOD only requires the components to provide minimal justification for their use of financial incentives, it lacks the information needed to provide assurance to the Secretary of Defense, Congress, and the taxpayer that the increasing amount of funding spent on recruiting and retention is appropriately and effectively targeted to occupational specialties for which the components have the greatest need.