Negative demographic trends and international security situation require proactive measures for attracting and retaining new specialists in the National Armed Forces.
- Until now, the HR policy of the National Armed Forces (NAF) has focused on motivating and keeping existing personnel in the service as long as possible, which also reflects in the NAF personnel structure with few low-ranking soldiers (about 20%) and many high-ranking soldiers (about 80%).
- Similar to many other countries, attracting and retaining new specialists is also a challenge in our armed forces. It would be necessary to do more to attract and retain new soldiers in the service, providing for measures specifically aimed at this group of personnel.
- In general, the number of vacant military positions tends to increase.
- International experience shows that the remuneration of soldiers must be competitive and stand out in labour market.
Taking into account the international security situation and the ever-increasing security challenges, the NAF human resources and their availability have become increasingly relevant. During performance audit “The effectiveness of the measures taken in the HR policy of the National Armed Forces”, the State Audit Office has assessed whether the NAF HR policy created the necessary prerequisites for attracting and retaining sufficient, qualified and motivated military personnel in professional service. The audit has confirmed that the prerequisites have been created for attracting and retaining such personnel for the performance of national defence tasks in groups of experienced and senior personnel (officers and instructors), but it would be necessary to do more to attract and retain new soldiers in the service, providing for measures specifically targeted at this personnel group.
Although the number of NAF military personnel has increased in all positions and the number of professional soldiers has increased from 4,496 to 6,658 soldiers in the period from 2011 to 2022, attracting and retaining sufficient, qualified and motivated personnel for national defence tasks is a constant challenge in the implementation of the NAF HR policy. As of 1 January 2022, there were 838 military posts and 100 civilian posts vacant, and the number of vacant soldier posts has a tendency to increase.
“The audit on the effectiveness of the NAF HR policy is the second audit in the audit cycle of the State Audit Office on human resources in the armed forces. In previous audits, we have assessed the development of the National Guard, and we have started an audit on the effectiveness of the reserve system of the armed forces at the end of this audit, thus, we aim to assess issues related to the attraction, development and retention of human resources for the fulfilment of national defence tasks in all segments of the armed forces,” explained Kristīne Jaunzeme, Member of the Council of the State Audit Office. She also emphasises that “the completion of this audit comes at a time when the Minister of Defence is pushing the initiative for the establishment of the National Defence Service, and it has been repeatedly said that the internal resources of the existing system have been exhausted. The plan to establish the National Defence Service can be seen as a response to the limited number of recruits and the ever-increasing needs of national defence in the context of current security challenges. At the same time, we believe that the opportunities of professional service are certainly not exhausted and that there are potential improvements in the NAF HR policy, which would promote both the attraction of new soldiers and the retention of existing soldiers in the service for the performance of national defence tasks. In addition, the experience of other countries shows that a positive experience in compulsory military service increases interest in professional service and the desire to continue a career in the armed forces”.
NAF military personnel structure: few low-ranking soldiers and many high-ranking soldiers
Until now, the NAF HR policy has paid the greatest attention to motivating and keeping the existing personnel in the service as long as possible, and this is also reflected in the personnel structure of the NBS with more than 80% of professional soldiers in the category of instructors and officers, and only less than 20% of soldiers in the category of soldiers. Although soldiers of professional service are involved in the implementation of the tasks of the National Guard and the provision of the system of reservists and reserve soldiers, continuing such a vector of development of professional service can cause significant restrictions on the development of the organization in the long term including both an insufficient number of soldiers and an insufficient number of instructors and officers needed by the state for the performance of defence tasks. Typically, the balance of personnel in military organizations is ensured by a pyramidal structure - with a large number of low-ranking soldiers and a small number of high-ranking soldiers.
Similar to other countries, attracting and retaining new specialists of NAF is also a challenge
Much has been done in the NAF HR policy, and our armed forces are an attractive and stable employer. A significant contribution to increasing the motivation of soldiers has been made by the reform of soldiers’ compensation implemented since 2015, which has generally increased the competitiveness of soldiers’ compensation. The NAF expenses for personnel compensation have significantly increased from 75.2 million euros in 2011 to 201.9 million euros in 2021. In the revision of the monthly salary of soldiers, the main changes were aimed at keeping the existing personnel, giving greater importance to the period of service, that is, the longer the service, the higher the monthly salary. Also, a differentiated system of monthly salary rates for soldiers has been established, depending on a soldier’s education, professional qualifications and taking into account the positions especially needed by the NAF. By increasing the maximum age of service, immediate benefits have been achieved, however, the long-term impact on military personnel structure should also be assessed.
Similar to many other sectors and also armed forces of other countries, the attraction and retention of young specialists in the Latvia’s armed forces is also a challenge. Although the NAF Concept of Staffing for 2020-2024 recognised that increased attention should be paid to the retention of existing soldiers in the service by focusing on the soldiers in the first five years of service, in which a high number of people leave the service, the audit did not establish that any measures had been taken to motivate this group of military personnel to stay in the service. “Negative demographic trends in Latvia create ever-increasing competition for human resources in all sectors, and this requires proactive action by employers. Although the armed forces are “hostages” of demographics and public health in the field of recruitment, recruitment opportunities are not exhausted and defence sector must continue specially targeted measures for the attraction of new specialists and expand the pool of recruits,” proposed K. Jaunzeme.
The experience of NATO countries shows that reforms in the field of compensation and social guarantees to reduce resignation rates are carried out as a primary measure. Nevertheless, compensation is not the only issue to address in reducing resignation rates. Staff attraction and retention initiatives, the implementation options of which would also be useful for the NAF to evaluate, may be related to more flexible service contract terms, greater involvement (participation) in career decision-making, timely training, improved rotation options, workload balancing, family support policy and other targeted measures that would promote retention after the first year, after the first five years, ten years, and fifteen years.
International experience: soldiers’ compensation must be competitive and stand out in the labour market
International experience shows that compensation of soldiers must be competitive and, taking into account the specifics of the military field (staffing high-ranking positions is possible using only internal resources that have “grown” from low-ranking personnel), it must stand out on the labour market - for the defence of one’s own country a person may and should be paid more. “The remuneration of junior personnel can be higher than their productivity because soldiers are enrolled and paid for the service relying on their growth and contribution in the future,” emphasised K. Jaunzeme.
The NAF compensation system should be planned for the long term
The NAF compensation system should be planned in the long term so that it is aimed at achieving the objectives of the NAF HR policy and proactively reacts to changes in salaries in the labour market. Also, the effectiveness of NAF social guarantees should be assessed so that they contribute to the motivation of soldiers and provide mechanisms compensating for the specifics and conditions of soldiers’ service.
In general, the auditors assess that NAF HR development planning has not proceeded in accordance with the principles of strategic planning, as there is a lack of conceptual and successive vision for HR development in the medium and long term. Although the Law on the Development Planning System does not apply to development planning in national defence policy, the basic elements of the development planning documents provided for in the aforementioned Law apply to HR development planning of the National Armed Forces in order to facilitate targeted and effective personnel development planning taking into account the scale of HR management processes of the National Armed Forces and the close connection with society.
The audit provides 17 recommendations in total, which will lead to improvements in the NAF HR development planning, the organization of HR management processes, and the effective use of available military personnel when implemented. The timeframe to implement the recommendations that the State Audit Office provided is 31 December 2024.
- The National Armed Forces consists of the regular forces, the National Guard and the reserve (reserve soldiers and reservists). The core of the staff of the NAF regular forces is made up of professional soldiers. In order to achieve the goals for national defence set in the National Defence Concept, the number of professional soldiers in the NAF must reach 8,000 soldiers during the period of the Concept until 2024.
- This audit has assessed the NAF HR policy regarding the military personnel in service and employment relationships including professional soldiers, civilian employees and national guards, who also perform tasks in accordance with the concluded contracts in the NAF units in addition to serving in the National Guard.
- Audit report
About the State Audit Office
The State Audit Office of the Republic of Latvia is an independent, collegial supreme audit institution. The purpose of its activity is to find out whether the actions with the financial means and property of a public entity are legal, correct, useful and in line with public interests, as well as to provide recommendations for the elimination of discovered irregularities. The State Audit Office conducts audits in accordance with International Standards of Supreme Audit Institutions (ISSAI) of the International Organization of Supreme Audit Institutions (INTOSAI), whose recognition in Latvia is determined by the Auditor General.
100 years of AUDIT STRENGTH
On 16 August 2023, the State Audit Law will turn 100 years old. With the adoption of this Law, the State Audit Office from a formal de facto institution founded on 2 December became a de jure independent, collegial supreme audit institution of the Republic of Latvia. The State Audit Office is one of the independent state institutions enshrined in the Satversme (Constitution) of Latvia. The Constitution was signed by Roberts Ivanovs as the secretary of the Constitutional Assembly, who was then confirmed as the Auditor General. He worked as the first Auditor General for 12 years. His signature confirmed the text of our Constitution alongside that of Jānis Čakste.
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