Army Warrant Officers will bid against each other for retention bonuses for six-year active duty contracts. Army photo by by K. Kassens.
The Army will soon have senior warrant officers bid against each other in an eBay-style auction for retention bonuses and six-year service commitments. Soldiers who agree to take a “minimum” bonus can cash in, while those who ask for larger ones will lose out, Army officials announced in a recent press release.
Dubbed the “Warrant Officer Retention Bonus Auction,” the system will debut in March, an Army official said Friday. In the news release, Army officials said the new system represents a “shift from traditional, fixed‑rate bonuses to a more flexible, market-driven system and that the auction encourages warrant officers to bid their “true value.”
Here’s how the Army says it will work:
Senior warrant officers hoping to receive a bonus for extending their active duty service commitment will submit confidential “bids,” which represent the minimum monthly paycheck bump each soldier “would be satisfied receiving” to sign a new six -year contract.
Once all eligible warrant officers submit their bids, Army officials will determine both the amount of the bonus payment and who will receive it by calculating the auction’s “market-clearing” rate, a concept used widely in economics and finance. In that process, the “winning” bid is the bonus amount that would spread all of the program’s funding for the year among the most soldiers who agreed to accept a payment that size or smaller with their bids (all soldiers who win in the auction will receive the winning bonus, even if their bid was lower).
Those who bid too high get nothing.
“The goal is simple. Reward as many qualified Warrant Officers as possible with the most competitive bonus the budget allows,” Lt. Col. Tim Justicz, an Army economist who helped design the program, said in the release.
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The auction is open to warrant officers in the CWO-3 and CWO-4 paygrades in “critical” military occupational specialties, or MOSs, according to the release. An Army official said the auction process would be for warrant officers in “technical” fields, a term the Army often uses for a variety of careers like cyber warfare, human intelligence collection, software operations and drones. The auction process will not apply to Army aviators.
“Army leadership believes the system rewards transparency and encourages officers to carefully consider the compensation that would make them comfortable with continued service,” officials said in the release.
The redesign of warrant officer bonuses comes as the Army is embarking on a slew of new human resources reforms. The Army also recently announced the Quality Tiered Incentive Program, which ties higher reenlistment bonuses to on-the-job performance, including “physical, technical, and tactical proficiency” in day-to-day tasks and fitness tests scores.
An Army official said additional information on the auction process will be released soon.