Support to the Armed Forces Reward and Incentivisation Review (AFRIR)

As set out in the Integrated Review of Security, Defence, Development and Foreign Policy (16 March 2021), the security threats and challenges facing the UK are increasingly complex and uncertain. If the Armed Forces are to defend the nation from these in future, Defence must manage its service personnel more effectively. Furthermore, the world and workplace are changing rapidly, with the pace of change accelerated by technology. Because of this, society’s expectations and the labour market are also changing and becoming less aligned to how Defence has worked in the past. What Defence offers to service personnel must therefore be adjusted by adopting more sophisticated and differentiated approaches to managing and rewarding their skills and talents. However, the unique opportunities military service provides should be preserved to prevent the creation of a transactional relationship with our people. The Defence Command Paper (22 March 2021) commits Defence to establishing an independent review to examine these issues. This review, known as the Armed Forces Reward and Incentivisation Review (AFRIR), will consider all aspects of the Offer to our people: financial reward in the form of pay and pensions; and benefits such as housing, healthcare, childcare, family support and career flexibility, and many others. Further details of the Offer can be found in Our Finest Asset: what it means to serve in the 21 Century (22 March 2021).
The Review is expected to publish a report by Spring 2023, which will set out recommendations to make military terms and conditions of service fit for the future. These will look out to the 2030s and beyond to ensure that Defence can recruit and retain a diverse and inclusive workforce with the right skills to meet its requirements - mindful of prevailing and expected labour market conditions and assuming the Department overall will have an operating budget that remains the same in real terms. The AFRIR has been designed to take a wide perspective: it will be led by an independently appointed Chair and apply the tools and lessons of global best practice. The Review, in conjunction with DSTL and the MOD’s Analysis Directorate, will draw on Defence-specific and multi-disciplinary research and benchmarking, and apply existing and new analytical frameworks to model or simulate scenarios. External Assistance (EA) is required to complement and build upon the skills and capacity available in Defence to deliver Review. There are four areas of work where EA is required: a) Conceptual Development. This package of work will provide support to the creation of a Reward & Incentivisation Strategy for Defence, focussed at Armed Forces Personnel, set in a 2035 context. This will draw heavily on knowledge and experience of global best-practice benchmarks on reward approach, philosophy and strategy. We are looking for fresh thinking to challenge the status quo. But it must also support us to successfully translate this into the future Defence context. This will require expert input into the shaping and development of a conceptual model that can define and connect Defence’s future operational vision with its people needs, helping to ensure it is framed in effective structures and terms for the Review. This requires the expert knowledge to be coupled with comfort in broader conceptual thinking and in dealing with the uncertainty that comes with formulating a long-term vision; b) Strategic simulation. This package of work aims to enable Defence to gain an understanding of its total Reward & Incentivisation system, including the relationships between different financial and non-financial elements. The work to be undertaken will involve creating a strategic view of the System today and how it may evolve in 2035, pulling in appropriate external best practice. It is anticipated that this work will involve integrating a considerable amount of multi-disciplinary knowledge; it will draw on current Defence data, b