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The Work Opportunity Tax Credit for Hiring Veterans

In addition to the numerous and diverse skills that veterans bring to the civilian workforce, there is an additional benefit to hiring them: The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain target groups (see Veteran Target Groups, below) who have consistently faced significant barriers to employment. Employers can earn up to $10,000 in federal and state tax credits.


For each veteran hired, the federal government gives from $2,400 to $9,600 for the first year of employment. The amount of tax credit depends on certain criteria, including the number of hours employed during the first year, disability status (particularly service-connected disabilities), unemployment status, and receipt of vocational rehabilitation services from a state-certified agency or the U.S. Department of Veterans Affairs (VA).

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Veterans have (and leverage) advanced technical training.

Military experience, on average, exposes individuals to highly advanced technology and technology training at a rate that is accelerated relative to that received by their nonmilitary, age-group peers. This accelerated exposure to high-level technology contributes to an enhanced ability to link technology-based solutions to organizational challenges. Consequently, not only do military veterans, on average, have more advanced exposure to high-level technology relative to their age-group peers, but they also make the most of that knowledge by effectively leveraging knowledge across other, disparate work-related tasks (U.S. Army Combined Arms Center).


Here is an example, people who enlist in the U.S. Army are tested in special skills and awarded an Expert Infantryman Badge (EIB) if completed.


The purpose of the EIB is to recognize infantrymen who have demonstrated a mastery of critical tasks that build the core foundation of individual proficiency that allows them to locate, close with, and destroy the enemy through fire and maneuver, and repel an enemy assault through fire and close combat (U.S. Army Maneuver Center of Excellence).


Numerous and arduous tasks at multiple stations must be completed in order to get the EIB. Stations include first aid; nuclear and biological chemicals training; indirect-fire station; basic technique training (e.g., moving under direct fire and using visual signaling techniques); communications (e.g., operating the Single Channel Ground and Airborne Radio System (SINCGARS) and Advanced System Improvement Program (ASIP) radio channels); map reading; security; and intelligence (Army Study Guide, January 2017). These skills, all technical in nature, are in fact transferable skills for a variety of civilian roles, including logistics and project management, information technology, medical care, personal security, engineering, and manufacturing, along with cultural and multi-lingual communications.


Many military automated systems are similar to the technology used by corporate employers. Thus, many military job seekers have the skills necessary to learn and use a complex system. This is just one of the unlimited examples of the skill sets that veterans posses.

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Veterans exhibit advanced team-building skills

Compared to those who have not served in the military, veterans are more adept with regard to organizing and defining team goals and mission, defining team member roles and responsibilities, and developing a plan for action.


Those with prior military service are shown to have a high level of efficacy for team-related activities; that is, veterans exhibit an inherent and enduring belief that they can efficiently and effectively integrate and contribute to a new or existing team.

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Veterans have (and leverage) cross-cultural experiences

Multiple studies consistently highlight that people with military backgrounds have more international experience, speak more languages more fluently, and have a higher level of cultural sensitivity as compared to age-group peers who have not served in the military.


The cross-cultural experiences characteristic of a veteran’s military career represent a competitive advantage for any employer organization, given the increasing globalization of the business environment.

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Veterans exhibit strong organizational commitment

Military institutions are particularly adept at institutional socialization, and as a result, the military experience engenders a strong linkage between the individual and the organization. Military veterans bring this strong sense of organizational commitment and loyalty to the civilian workplace.


For the organization, this strong sense of organizational commitment contributes to reduced attrition/ turnover, which, in turn, is reflected in a positive, high-level work product.

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Veterans have experience and tools to work in diverse work settings

While the military has been publicly criticized for a lack of diversity on several important dimensions, research conversely and consistently highlights the fact that the all-volunteer military represents a heterogeneous workforce across myriad dimensions, including educational background, ethnicity, culture, values, and the goals and aspirations of organizational members.


Consequently, those with military experience are, on average, highly accepting of individual differences in a work setting and thus exhibit a high level of cultural sensitivity to such differences in the workplace.

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The Return on Investment (ROI) of Hiring Veterans

According to research conducted by Guo, Pollak, and Bauman, the aforementioned tax credits cost roughly $10,000 or less per job-year. The cost is “on par with other tax credit programs and substantially less than some larger-scale federal employment initiatives (e.g., the American Recovery and Reinvestment Act, which cost $151,000 per job-year). Overall, the new credits cost $610 million or less, while increasing yearly income for disabled veterans by more than $1 billion.


The results suggest that hiring tax credits can be a powerful and cost-effective policy tool to stimulate the hiring of veterans.” Business leaders often support the development of veteran employment programs within their organizations, believing that hiring veterans represents both good citizenship and good business.


Metrics demonstrate higher performance, longer retention, and cost savings related to veteran employees.

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