Veterans Are Good For Business

Not since WWII have this many veterans, reservists, and Guardsmen been available to the private sector. Business should take advantage of this exceptional talent pool.

Chris Taylor and Phillip Carter

Each year, the military sheds approximately 250,000 active and reserve troops in its normal attrition cycle. In the drawdowns projected to come over the next five years, the services may shed an additional 250,000 to 500,000 troops, above and beyond the normal rate of turnover, depending on how the Pentagon’s budget scenarios play out.

There are approximately 22 million veterans in America. The Bureau of Labor Statistics’ published unemployment numbers for January 2014 saw post 9/11 veterans unemployment increase to 7.9%, up from 7.3% in December 2013 — and still above the national unemployment rate of 6.6%.

Importantly, qualitative evidence also suggests that 40% of veterans are underemployed, and Syracuse University’s Institute for Veterans and Military Families found that 90% of active-duty military spouses are underemployed. So, while statistically speaking, veteran unemployment may have gone down over the last few years, it appears that veterans have been forced to take jobs that do not make full use of their talents. Financial pressures at transition, difficulty translating skills from the military to the private sector, geographic dislocation at the moment of discharge, and other factors, contribute to the unemployment problems. Underemployed veterans and spouses earn less in their positions (thus contributing less in taxes), and initial research suggests far worse job satisfaction and retention in these positions. Because of the high unemployment numbers, particularly for recently returned troops, the Pentagon currently spends more than $1 billion annually on unemployment payments.

To begin to combat these numbers, Secretary of Defense Chuck Hagel paid a visit to Wall Street to convince its leaders to hire more veterans. Business leaders like Jamie Dimon of JP Morgan and Stephen Schwarzman of Blackstone, and Howard Schultz of Starbucks, have all publicly committed to hiring veterans and set the tone and a great example for America’s corporate executives. All companies, small and large, and across all industries, should view veterans coming into the marketplace as a tremendous opportunity to harness the talent of this uniquely qualified group of Americans.

In the 1980s, about 60 percent of CEOs had military experience. Today that number is about 8 percent. That should be alarming because a January 2014 research paper by Ephraim Benmelech and Carola Frydman showed that CEOs with military experience were 60 percent less likely to commit fraud or lead companies that do. The study also showed that military CEOs fared better than other CEOs during challenging economic times. If these numbers are true, why wouldn’t shareholders, boards of directors, and CEOs want to hire those with military experience into all levels of their organizations?

Dan Akerson, former CEO of General Motors, and a 1970 graduate of the Naval Academy, explained in a recent phone conversation how his service informed his future leadership and how veterans are an important part of the General Motors family. “I was given immense responsibility immediately upon joining the fleet — responsibility that none of my civilian friends had at 22 years old. I was taught to be part of a team, be accountable for my actions, to be resourceful when things didn’t go according to plan, and to be above all else, persistent in getting the job done. I was responsible not just for, but also to, those with whom I served. We look for all of those traits in the veterans we hire here at GM.”

Many of the efforts to hire veterans have pitched the case as one of charity. Hire a veteran for your country! Hire a veteran because it’s the right thing to do! They’ve served abroad; now help them at home! These pitches appeal to good motives in employers to help their fellow citizens who have served in uniform. But they are not the strongest pitch that can be made for veterans, because they fail to demonstrate how hiring veterans helps the top and bottom lines.

As retired Army Lt. Gen. Bill Caldwell recently argued in a Center for a New American Security (where Phil works) report, “Veterans leaving the U.S. military represent a tremendous asset to be leveraged by society, because of their education, experience and demonstrated commitment to excellence. There is a powerful business case for hiring today’s veterans — but this case must be made persuasively to dispel the myths that impede veterans from finding employment and achieving their full potential.”

The business case for veterans has three pillars. First, veterans represent, on average, a more educated and more experienced source of human capital than their comparable civilian peers. This is particularly true for young veterans, who have met high enlistment requirements for academic testing, physical fitness, medical and drug screening, and overall suitability.

Second, veterans tend to bring significant added value to market beyond their peers. The military, unlike any other department in government invests in leadership, ethics, and skills training at all levels. It instills creativity in the face of uncertainty; it fosters independent thought while strengthening a team; it requires a relentless pursuit of excellence toward a common vision; and it demands a set of shoulders strong enough to bear the weight of history. A 21-year old Marine corporal has more responsibility for other people, equipment, and tasks than her civilian peers, and the planning processes used in the military teach servicemembers to see the forest and the trees; a skill CEOs should find useful in today’s complex global economy.

Third, veterans bring access to resources that can be leveraged by business too. The post-9/11 GI Bill, a generous program that provides in-state tuition (which many private colleges match) and a living allowance to veterans since 2009, offers one example for how this can be done. Business should embrace these veterans, directing them to fields such as science, technology, education and math that will offer the best career prospects, and creating apprenticeship programs, leveraging the enormous resources of this $30 billion government program to build the talent pool of the future.

The Washington Post features VetConnector as a new technology that can vastly improve veteran employment.

Finally, current web-based employment tools aren’t serving veterans well. They use archaic keyword-search technology that simply puts exceptional military talent into “pipelines” or “buckets” and labels them instead of freeing their talent. People aren’t keywords or job codes. It’s inaccurate, inefficient and frustrating. Military Occupational Specialty translators fail because they describe what the military says your job was, not what you did in that job. In too many cases, veterans who have exceptional experience are dismissed because some keyword didn’t show up in their resumes, so they were overlooked. New technologies can help solve this problem, and the White House, and the Departments of Defense, Veterans Affairs, and Labor, as well as Congress are all working together to get 21st-century technology into veterans’ hands.

As General David Petraeus and Sidney Goodfriend remind us in their recent Wall Street Journal op-ed, businesses have an opportunity not seen since World War II to hire exceptional and proven talent. By adopting a model that includes public, private, and high-touch local community assets and leveraging next-generation technology as the connective tissue, veterans, business, and the Nation all win.

Chris Taylor, a former enlisted infantryman and Force Recon Marine, is Founder & CEO of the Novitas Group— a VA-certified service-disabled veteran-owned small business. Phillip Carter, an Iraq War army veteran, is senior fellow, counsel, and Director of the Military, Veterans, and Society Program at the Center for a New American Security in Washington, DC.