Current Surface Warfare Officer (SWO) retention is well below the level needed to staff Department Head billets in the Fleet. The Navy is developing a career incentive pay to stem the flow of SWOs leaving the Navy and increase retention. The purpose of this thesis is to capture the training costs of junior Surface Warfare Officers that occur between commissioning and qualifying as a SWO. This thesis also explains the economic theory of specific training and its relevance to the wage streams offered to SWOs. This thesis estimates the training cost of qualifying a SWO to be $80,194.

Since 2000, the Navy has undertaken a number of initiatives to achieve greater efficiencies and reduce costs. For example, it has reduced crew sizes on some of its surface ships and has moved from instructor-led to more computer-based training. This report reviews the training, size, composition, and capabilities of the Navy¿s ship crews. It assesses the extent to which the Navy: (1) used valid assumptions and standards in determining crew sizes for cruisers and destroyers; and (2) has measured the impact of changes to its training programs, incl. the time it takes personnel to achieve various qualifications. This report analyzed Navy procedures for determining crew size compared to guidance, and analyzed current Navy metrics to measure training impact.