Image: By Manuel Dohmen – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=185802

In cyberspace, the focus is on threats from malicious activity — a tangible threat. A less obvious threat to cyber is inflation which undermines any cyber organization by eroding budget and employee compensation. Inflation can create unseen resignation rates if not addressed, and jeopardize ongoing cyber efforts and the U.S. Defense Department’s migration to cloud-based services. The competition for cloud security talent is razor-sharp in the private sector already.

There are different ways to build and maintain a cyber workforce: recruit, retrain and retain. The competition between the DoD and the private sector for talent will directly affect recruitment and retainment. Inflation and the shortage of skilled cyber professionals create increasing competition between the federal and private sectors for much-needed talent. Retraining professionals to become a part of the cyber workforce is costly, and if the incentives are not in place to stay in the force, it is short-lived as retrained cyber talent moves on. Inflation creates a negative outlook for recruiting, retraining, and retaining cyber talent.

The inflation expectations in 2022 are the highest in decades, which will directly impact the cost to attract and retain a cyber workforce. Even if the peak inflation is temporary due to COVID-19 as well as disruptions in the supply chain and the financial markets, the pressure on increased compensation is a reality today.

What does it mean in practical terms?

According to the Wall Street Journal, salaries will increase in 2022 for white-collar professionals in the range of 10%, and the federal workforce can expect an increase of less than a third of the gains in the private sector. These signs of growing salary gaps are likely far more severe and exacerbated in the cyber workforce.

For example, by browsing the current jobs ads, a manager for incident response in Rhode Island offers $150,000-$175,000 with the ability to work from home with zero commuting. A fair guess would be there’s a federal GS pay scale at 20-30% less, with work taking place from 8:30 a.m. to 4:30 p.m. in a federal facility; not to mention cloud security, where large players such as Amazon Web Services are actively recruiting from the federal sector.

An increasing salary gap directly impacts recruitment, where the flow of qualified applicants dries up due to the compensation advantage of the private sector. Based on earlier data, the difference in salary will trigger decisions to seek early retirement from the DoD, to pursue a second civilian career or to leave federal service for the private sector as a civilian employee.

The flipside of an all-volunteer force is that in the same way service members volunteer to serve, individuals have the option at the end of their obligation to seek other opportunities instead of reenlistment. The civilian workforce can leave at will when the incentives line up.

Therefore, if we face several years of high inflation, it should not be a surprise that there is a risk for an increased imbalance in incentives between the public and the private sectors that favor the private sector.

The U.S. economy has not seen high inflation since the 1970s and the early 1980s. In general, we all are inexperienced with dealing with steadily increasing costs and a delay of adjusted budgets. Inflation creates a punctured equilibrium for decision-makers and commanders that could force hard choices, such as downsizing, reorganization, and diluting the mission’s core goal due to an inability to deliver.

Money is easy to blame because it trespasses other more complex questions, such as the soft choices that support cyber talent’s job satisfaction, sense of respect, and recognition. It is unlikely that public service can compete with the private sector regarding compensation in the following years.

So to retain, it is essential to identify factors other than the compensation that make cyber talent leave and then mitigate these negative factors that lower the threshold for resignation.

Today’s popular phrase is “emotional intelligence.” It might be a buzzword, but if the DoD can’t compete with compensation, there needs to be a reason for cyber talent to apply and stay. In reality, inflation forces any organization that is not ready to outbid every competitor for talent to take a hard look at its employee relationships and what motivates its workforce to stay and be a part of the mission.

These choices might be difficult because they could force cultural changes in an organization. Whether dissatisfaction with bureaucracy, an unnecessary rigid structure, genuinely low interest for adaptive change, one-sided career paths that fit the employer but not the employee, or whatever reason that might encourage cyber talent to move on, it needs to be addressed.

In a large organization like the DoD and the supporting defense infrastructure, numerous leaders are already addressing the fact that talent competition is not only about compensation and building a broad, positive trajectory. Inflation intensifies the need to overhaul what attracts and retains cyber talent.

Jan Kallberg, Ph.D.