The National Security Agency and other intelligence components across the Defense Department can now offer higher pay for cyber and other technical roles under a new system quietly approved earlier this year.

The undersecretary of defense for personnel and readiness in May approved a “targeted local market supplement” for select positions across the defense civilian intelligence personnel system (DCIPS). The supplement covers employees across 23 occupational series in various cyber and science, technology, engineering and math (STEM) roles, including “2210” IT management series.

The new pay system became effective in the first pay period following the May 10 memo signed by Undersecretary of Defense for Personnel and Readiness Gil Cisneros.

The DCIPS includes agencies like the NSA, the National Geospatial-Intelligence Agency and the Defense Intelligence Agency, as well as intelligence branches of the military services, among other components.

New employees with a bachelor degree hired into eligible positions can be paid a minimum salary of $76,156 under the supplemental rates, while those with a master’s degree could be offered a minimum of $88,250. And it gives agencies flexibility to offer increased rates for high-demand work roles or “exceptional qualifications.”

The highest end of the new pay system for cyber and STEM roles at the NSA and other defense intelligence agencies tops out at $183,500, the same as the salary cap under the new Special Salary Rate for IT employees being adopted by the Department of Veterans Affairs.

Former Federal Salary Council Chairman Ron Sanders, a longtime expert on federal workforce and cybersecurity issues across government, said the new supplemental salary rates will allow defense intelligence agencies to be more competitive in tight labor market for technical talent.

“DoD knows it will never ever be able to compete on dollar-for-dollar basis, but the DoD mission is pretty compelling,” Sanders said. “And the DoD intelligence agencies, particularly the big ones, know how to leverage that mission in the labor market. I think the combination of the special pay rate for all practical purposes, and the DoD mission together, will work to make the intel agencies more competitive.”

The new supplemental salary rates replaced a previous special pay rate structure offered only by the NSA.

Sanders estimated the new rates would allow agencies to offer some employees as much as a 35% pay bump. While all organizations deal with attrition, Sanders said the NSA and other agencies want to stem “regrettable losses” or highly skilled employees who feel compelled to move to the private sector to make more money.

“They’ve already seen attrition rates, particularly for regrettable losses, decline,” Sanders said. “And in fact, there are some who are anecdotally reporting that people who had announced their departure are not leaving now in part because they can get more money. Again, not as much money as a Google or an HP or a startup may give them, but better [pay]. And ‘better’ coupled with ‘mission’ is keeping them.”

The Pentagon didn’t respond to questions about the pay raises.

In a May Frequently Asked Questions document, though, the intelligence directorate at the Pentagon sheds more light on the supplement. The document points to how “private sector compensation for this talent far outpacing the current rates associated with STEM talent.”

The NSA originally requested the pay increases, leading the intelligence directorate’s Human Capital Management Office to conduct a study looking at cyber and STEM pay across all defense intelligence components.

“As a result, we determined that an enterprise approach, rather than component-by-component approach, was required to address the STEM/Cyber hiring and retention issues,” the FAQ explains.

The Pentagon also plans to review the new pay system twice a year moving forward, Cisneros’ memo states, “for alignment to labor market rates, using appropriate commercial compensation surveys.”

The new system for defense intelligence agencies comes amid an increasingly fractured cyber and IT pay system across government.

The Defense Department has had pay flexibilities since 2016 under the Cyber Excepted Service system. The Department of Homeland Security less than two years ago launched its own excepted cyber pay as part of the Cyber Talent Management System.

But most other agencies don’t offer pay flexibilities. So far, only the VA has opted into the Special Salary Rate for IT employees approved by the Office of Personnel Management earlier this year.

“What this doesn’t do is affect the rest of government, and that’s not a good thing,” Sanders said of the DCIPS supplement. “Because that great sucking sound you hear is talent more likely to go to DoD, simply because DoD has the flexibilities to respond more quickly and do more things when it comes to pay then the rest of the federal government.”

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