Myth #5: Veterans Are Uniquely Underemployed

Written by Laura Schmiegel, SVP Strategic Partnerships, Orion Talent

Reality: The pay drop after leaving the military is how the market works when anyone changes industries.

For years, the idea that veterans are uniquely underemployed has circulated through news stories and advocacy campaigns. The implication is that employers either don’t understand veterans’ skills and leadership, or worse, that they don’t value them. The truth is more practical and encouraging.  But in order to help veterans understand why this is a myth, we need to first understand where the myth come from and what the data actually show.

Bureau of Labor Statistics [BLS] data show that  when someone changes industries there’s often a short-term pay drop. The drop is normally 10–30 %, and it takes about two to three years to recover.   Economists call it the cost of lost “occupation-specific experience.”

Contrary to the accepted narrative, the data show that Veterans experience the same thing, although they don’t have to. According to RAND, Veterans with technical or analytical military occupational specialties, or MOS’s, like cyber, intelligence, engineering, transition near civilian pay medians if they transition to a civilian job that uses their technical military skills.

But more than 55% of transitioning veterans change occupations when they enter the civilian workforce. In fact, the rates by which career-switching veterans’ pay drops mirrors that of the general population.  These veterans often start lower, but close the gap within two to three years as they build industry experience.

Where does the myth come from?

Most studies rely on self-reported surveys where veterans say they feel underemployed.  More rigorous studies that track veterans’ acquired skills vs. the skills their new jobs require show that skills mismatches lead to lower pay.  Yet veterans in mismatched jobs still report feeling underemployed. 

This is often presented as a problem to be solved, such as employer discrimination, or a lack of recognition of the veterans’ leadership skills.  Yet employers consistently list ‘leadership’ as the #1 quality they seek in veterans. 

The myth persists because the narrative of veterans as heroes who are being discriminated against plays on emotions, leading to good press releases and full nonprofit coffers. The truth that veterans must re-earn market value isn’t as glamorous.

The underemployment myth can actually hurt transitioning service members by setting unrealistic expectations, and overlooking the natural learning curve every career switcher faces. Veterans are at risk of overlooking opportunities for rewarding, long-term careers simply because as an entry-level worker, they must start at a lower pay grade.

Money spent to try and “solve” underemployment won’t change the behavior of hiring managers, who are paying market value for the talent they see in front of them.  Misinterpretation or misunderstanding of military skills is one thing. Correctly valuating talent or skills levels in a new industry is another

Employers buy proof of results and impact. They already have candidates who’ve done this exact work. They don’t doubt veterans’ leadership; they just can’t yet measure it in their context. Once veterans show results, the pay gap narrows fast.

How to Close the Gap Faster

The veteran advantage is the ability to learn fast, adapt, and close that gap sooner.  Veterans can minimize dips in pay and reduce attrition in the first 1-2 years by doing the following:

1. Consider a career that uses at least some of your military skills.  Research shows that for most new jobs, a better fit = better retention.  The #1 reason veterans say they leave their first job after the military is a poor match between their skills and the job.  The more your first job resembles what you did in the military, the more likely you are to feel successful, eliminate pay gaps, and stay for a career.
   
   
2. Make sure you understand the job description.  A good fit means you understand what the job requires, and whether your skills fit that job.  Make sure you ask a lot of questions about the job so that you are sure you are a good fit.
   
   
3. Always track opportunities to upskill.  Veterans who stray from their military skills can quickly make up gaps through training.  But rather than rushing into a training program before transition, maximize your research.  What is the career progression you want?  What certifications will be needed over time?  Can you start working first, and have your employer pay for your training?  Sometimes, training does not lead to a pay bump in that first job – you will still be considered entry level.  It may be wiser to start work and ensure you are learning a skill that will advance your career as quickly as possible. 
   
   
4. Talk to a recruiter.  In our survey of over 20,000 veterans, the #1 thing they say would have improved their job search was to talk to a recruiter.  Most candidates rely on employer application sites or large job boards for their search.  These methods are expedient, but virtually guarantee you won’t speak to a recruiter unless your resume and their job description match perfectly.  Seek out recruiters at job fairs or search firms for a better, consultative approach (Orion Talent is here to help!)
   
   
5. Be patient!  Many careers start with lower pay, but promise a great career, pay advancement, job security and a sense of purpose.  That gig job may pay a few dollars more, but it will likely not lead to a solid future.

At Orion Talent, we’ve seen this pattern across thousands of transitions. Veterans who understand the market, plan their next move, and communicate in business terms don’t stay “underemployed” for long.

The market rewards proof, not potential. At Orion, we know that Veterans have potential in abundance. Let us show you how to turn it into career success.

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