Recently, the Army announced that it will not meet its goal of recruiting 80,000 active-duty soldiers this year, and has lowered the goal to 76,500 for 2018.
The struggle to meet this year’s recruiting goal was attributed to the favorable U.S. economy, increased completion from private-sector employers and the declining quality of potential recruits.
On the plus side, for the Army, retaining current soldiers has been more successful, with 86% choosing to stay on, compared to 81% in previous years.
Investors take note. This is just one more indication that the U.S. has a serious labor shortage problem, that is likely to lead to higher employment costs and, potentially, to lower profit margins.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA