Sorry, the Boss Is in Baghdad

The reserves are acquiring a higher executive profile

When Todd and Teresa Uterstaedt returned to their Cincinnati home after a holiday trip in January, 2002, the newlyweds found an ominous FedEx package waiting for them on the kitchen counter. Inside were orders for Todd, a 34-year-old ex-military intelligence officer and Army reservist, to deploy--fast. Uterstaedt, a vice-president at organizational consultancy Right Management Consultants, had 10 days not only to get his personal affairs in order but also to brief clients and match them up with other consultants. For his colleagues and boss, it meant a frenzied scramble to deal with Todd's orphaned workload and easing in his new temporary replacement. "I left behind six or seven high-level projects," says Uterstaedt. "It put a big burden on my co-workers."

Corporate America has little trouble plugging holes when a military call-up involves low-to-mid-level workers. All companies have to do is tap a temp agency and raid the legions of eager unemployed. It's far more daunting when a key executive or manager has to be replaced virtually overnight. Yet increasingly, as warfare evolves from a solidly guns-and-ground-troop affair into high-tech mastery and intelligence-gathering, the reservist call-up is changing, too.

The warriors of the 21st century are increasingly white-collar. More than 60% of reservists surveyed in 2000 by the Defense Dept. say they work in the corporate world, and a growing number come from the managerial ranks. While the Defense Dept. doesn't collect specifics, reservist associations and human resource consultants say the number of management types called up in the past year outpaces those activated in the Persian Gulf War by an estimated 20%. And a higher percentage of the 111,600 reservists now on active duty are officers, says John O'Shea of the reserve Officers Assn. Senior military rank typically translates into a senior role in the civilian world. "The makeup of reservists is evolving to [more] highly skilled, higher-earning individuals with bigger job responsibilities," says Gary Peck, president of the Staffing Group of Spherion Corp., a human resources and staffing firm. "They are leaving a bigger hole behind."

The challenges to corporations could soon get worse. With an estimated 250,000 more reservists expected to be activated if the U.S. declares war on Iraq, more senior-level employees who once served in the military full-time may get their marching orders to serve as intelligence officers, doctors, covert-ops strategists, and commanding officers. And with domestic security issues on the front burner, more of these specialists could also be called to pull some duty in the new Homeland Security Dept. Already, calls to the Employer Support of the Guard & Reserve, a volunteer group that helps companies cope with reservist issues, are up some 50% in the past year, many from companies dealing with management-level reservists for the first time.

The biggest issue for companies and reservists alike: pay. Because companies aren't required to maintain salaries, reservists can lose up to half their wages. Mid-level officers pull in about $3,000 to $5,000 a month, which hardly covers the jumbo mortgages and car payments many of them shoulder in civilian life. Not to mention the loss of the yearly bonus--the big money for many consultants and bankers. During the gulf war, companies didn't go to the same lengths they do now to make up for lost pay or benefits. Today, though, a growing number, including J.P. Morgan Chase (JPM ), AstraZeneca (AZN ), and Pfizer (PFE ), offer 6 to 12 months or more of pay to supplement lower military wages, along with continued health care for families. IBM even sticks to scheduled raises, vacation time, 401(k) matches, and profit sharing--and will make up for lost pay indefinitely.

Employment lawyers advise companies to draw up plans for a reservist exodus, which could last a year or even two. Losing high-level staff is always a challenge--now add to the problem the unpredictable departure of the country's many manager-warriors.

By Jennifer Merritt in New York

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