>What are your reasons?
>Take a look inside
>Back to school?
>Nice cushion
>The struggle of one
>Sidebar: 5 Steps
>Sidebar: Decision Resources
>Average Base Salaries for Transitioning Junior Officers

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Back to school?

Assessing the possible need for post-graduate education is another important factor in making career transition decisions. Lee Cohen, an experienced management recruiter with Lucas Careers who has placed more than 1,500 former military officers in the private sector, calls graduate business school the “quarter-million-dollar gamble.” As a former naval officer, Lee knows from experience that many transitioning military officers view immediate graduate education, particularly MBA programs, as the first step in their transition. These feelings might stem from their experience in the military that success requires ticket punching. However, when you consider a two-year program at a nationally ranked graduate business school easily can cost more than $70,000 and combine that with the loss of two-years’ private-sector pay, “it’s easily a quarter-million-dollar gamble that may not be worth the expense and loss of income,” says Cohen.

Although post-MBA employment opportunities are expected to improve in 2004 and 2005, the days of multiple job offers and signing bonuses are long past. USA Today recently reported that among 2003 MBA graduates, males received a median annual starting salary of $75,000 while female graduates started at a median salary of $67,500.

In addition, many MBA programs are assailed for churning out graduates well-versed in finance, corporate strategy, and the language of business but lacking the ability to communicate ideas and influence people. Transitioning military officers, with or without an MBA, bring valuable skills needed in the business world, including experience working with different cultures and socioeconomic groups, a commitment to high standards of conduct, a proven record of establishing and meeting goals, and direct leadership experience.

Wagoner, of SAIC, agrees that in most cases graduate school can come later in the transition and says many employers will underwrite graduate education expenses as one of the benefits of employment. “Investment banking and some high technology work may require the advanced degree upfront—especially in the telecommunications, information technology, and biotechnology fields.”

If you think you need a degree, Wagoner recommends transitioning officers consider the executive programs offered by many business schools. “Executive programs preserve your current income and strengthen your résumé. However, they can be hard on your personal life.” Most executive programs involve two long weekends of classes each month for up to two years while you still work a day job. Summer residency programs and overseas study requirements often can be coordinated with vacation periods.

Nice cushion

While pondering career alternatives, appreciate your active duty pay, pension, and medical benefits and recognize that, in some cases, a civilian job will mean a pay cut. In recent years, military people have received the biggest series of consecutive pay raises in a generation, averaging two to three basis points a year more than the annual rate of inflation. Military people received an overall average pay increase of 4.1 percent for 2004, while the average mid-level executive received a wage increase of 3 percent to 3.6 percent.

Data compiled by the Bureau of Labor Statistics in the 2003 National Compensation Survey indicates senior military officers rank among the seven top-paying professions based on the median annual income among more than 200 professions analyzed in the survey. Professions included in this top-tier group, with a median annual income approaching $100,000, are engineering, college professorships, executive management, finance, law, major airline pilots, and medicine. The total compensation (not considering the state and federal tax advantages associated with military service and special incentive pay) for an O-5 stationed in the Washington, D.C., area exceeds $100,000, and an O-6’s direct compensation exceeds $120,000—comfortably placing senior military officers in the top tier of professional incomes.

By contrast, private sector pay varies were based on industry, experience, job performance, education, geographic region, security clearances, and level of responsibility. Typical starting salaries for transitioning junior officers are detailed on page 19. The salaries listed do not include the potential value of bonuses, profit-sharing, 401(k) plans, or stock options. Senior officers with advanced degrees, high-level security clearances, and significant leadership experience will command greater starting salaries.

Also, military personnel are in that small portion of the work force that had a defined benefit pension plan. Based on data from the Department of Labor, the Vanguard Group, and The Wall Street Journal, only half of all workers in the private sector have an employer-provided pension plan. And among those workers with pension plans, more than 80 percent are offered defined or variable contribution plans where retirement benefits are a direct function of the worker’s contributions to the plan. Even for workers fortunate enough to have an employer-provided defined benefit plan, few retirement programs include the inflation-protected lifetime annuity accorded career military personnel.

The struggle of one

For military officers approaching the end of their careers, there are no easy answers and no alternatives free of risk. Typical of officers struggling with a tough call is Lt. Cmdr. Jon Still, a Navy pilot from Virginia Beach, Va., with 11 years of military service. “I’ve been tearing myself apart trying to make a decision.” For Still, weighing career alternatives is not about money. “My kid is the No. 1 driver, and I just love being a dad.”

Still gravitated to military service following his father’s example and was leaning toward staying in the military following a recent tour in the Naval Air Training Command. But becoming a father changed his priorities, and he now faces “the most agonizing decision” he has ever had to make. Lately he has been considering a transition from the military to commercial aviation, though he remains undecided. If he does transition, he knows he wants to keep his “fingers in the Navy through the Naval Reserve.”

Still has high praise for Navy assignment officers and his unit commander, who have been supportive throughout his decision process. Although eligible for a lucrative aviation career bonus, Still demurred because of the obligated service associated with accepting the bonus and opted to retain flexibility for him and his wife to make a shared career decision. “She will support me either way,” but should he elect to transition to the private sector, it will be a family-focused decision. Clearly, there are no easy answers.

As with all big decisions, career alternatives can be analyzed to the umpteenth degree, but at some point, while there are still many uncertainties, Still, like many other officers, will have to make a decision. In career transitioning, as in business, the essence of prudent decision making is grounded in the core principles of good management. Unfortunately, these three old-fashioned values often are forgotten in the excitement of the moment: be honest, be frugal, and be prepared.

Jim Carman is a graduate of the MIT Sloan School of Management and served as a naval aviator for more than 24 years. He provides aviation officer career information presentations for the Navy Personnel Command, and serves as a business development advisor to a growing technology company.