Company Performance Improves with Military Veterans
Recent research performed by Efraim Benmelech and Carola Frydman, both associate professors of finance at Kellogg School, found “firms that are run by CEOs with military experience perform better than other CEOs.”
The same holds true for companies that hire veterans as part of their overall team.
While the trend in the early 2000s was for hiring managers to be apprehensive in their hiring of veterans, according to a 2015 nationwide survey by Harris Poll on behalf of CareerBuilder, of the more than 2,500 responses from hiring and human resources managers, nearly half (47 percent) said “they pay more attention to the applications submitted by veterans, and 69 percent said that if given two equally qualified candidates—one veteran and one not—they are more likely to hire the veteran.”
In the case of the Benmelech/Frydman research, they found three distinct reasons why veterans make better CEOs than their civilian counterparts:
They perform better under pressure
When industry is going through a decline or in some sort of distress, research found that those firms that are run by CEOs with military experience perform better than their civilian counterparts. The interpretation is that service in the military may prepare one to make tough decisions and show leadership in tough times.
They exercise “conservative corporate behavior”
While this may seem counterintuitive given that many psychological studies have shown “that military service leads to aggressiveness, overconfidence, and increased risk-taking,” the military is incredibly good at training soldiers and commanders to make decisions without gambling. The reason, of course, is that you might be gambling with the lives of your soldiers. As a result, decisions in business tend to be more conservative in nature.
The third distinction is truly compelling – They are less likely to commit corporate fraud
Benmelech and Frydman found that chief executives with military experience not only perform better under pressure but are also much less likely to commit corporate fraud - up to 70% less likely. No small margin.
Recognizing that veterans not only make great CEOs, Nick Baucom, a U.S. Marine veteran, who served in the U.S. Marines from 2002 to 2008, and was in Iraq in 2003, makes hiring veterans a priority for his company, Two Marines Moving (www.TwoMarinesMoving.com).
“As a group, veterans bring with them experience and attitudes that make them great employees.”
Baucom’s moving company employs more than 100 veterans between its two locations – the Washington, D.C., area and Miami. He’s wanting to hire more because his company is booked three to four weeks in advance and he could use the extra help.
“But with the unemployment rate for veterans dropping, it’s becoming more challenging to hire them,” says Baucom, who also is author of “On the Move: A Marine’s Guide to Entrepreneurial Success.”
Baucom says there are several reasons veterans make topnotch employees, including:
• Their tenacity. Veterans know what perseverance is all about, if for no other reason than they survived boot camp, an arduous challenge that puts a person’s fortitude to the test. Marines, for example, must prove they can hike 20 miles carrying a fully loaded pack.
• Their decisiveness. People in the military don’t always have the luxury of taking all day to analyze a situation before making a decision. Yes, they must gather data and understand it thoroughly – but they understand the need to do it expediently. “A 90 percent solution now is better than a 100 percent solution later,” Baucom says. “Both in the Marines and in the business world, I’ve found that waiting for that 100 percent solution just leads to paralysis.”
• Their initiative. Anyone in the military learns to follow orders. But they also understand that there are situations when they need to take action in the absence of orders. If something needs to be done, they don’t have to wait to be told.
Bottom line: While some still view Veterans as America’s problem, those “in-the-know” recognize that Veterans are America’s solution to many of the issues communities and corporations face today.