Pay Compression in the DoD Workforce : Defense Acquisition University , February 28 , 2024
Pay Compression in the DoD Workforce : Defense Acquisition University , February 28 , 2024
From the document: "The U.S. Department of Defense (DoD) seeks to attract and retain the best civilian workforce to ensure the highest quality products are delivered to our Soldiers. DoD civilian workers are a key element of the National Defense Strategy and successfully modernizing our military; hence recruitment and retention of these resources is paramount. This qualitative study examines pay compression and the impacts on the DoD Civilian Workforce. Pay compression is a mismatch in employee pay based on one or more conditions such as position, qualifications, seniority, or supervisory status.
The research revealed factors that contribute to pay compression including candidate supply and demand, failure to correct for market changes when giving raises, minimum wage increases, poorly structured or broad pay scales, pay transparency, differences in terms, mergers or acquisitions, pay caps, and federal regulations. Specific to the Federal workforce, which includes the DoD Civilian workforce, many of the factors that drive pay compression are controlled by federal regulations such as pay scale, pay caps, annual adjustments, and rules for pay increases.
One of the most cited factors for pay compression in the Federal workforce was pay caps. While locality pay was instituted to help bring pay parity for Government Civilians, the pay cap counters the benefit by creating pay compression within the workforce. The pay cap most heavily impacts those employees in areas where the greatest help is needed to compete with Industry for personnel. The issue with pay caps has grown over the years as it continues to impact more locality regions and greater populations of Government Civilian employees."
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