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An Untapped Talent Pool: Why SMBs Should Hire Military Spouses

ExtensisHR8 minute read
Military spouse hugging her partner and holding an American flag

Quick look: Military spouses are, on average, highly educated, skilled, and motivated—a combination that makes 80% of HR professionals eager to hire them. Yet only 16% of HR teams have a strategy to recruit and retain military spouses, and less than half feel they understand this group’s challenges. Here, explore what makes military spouses a valuable workforce segment and how to attract, hire, and retain this talent pool.

Businesses consistently seek resilient, adaptable, and dedicated employees. One highly valuable, yet often overlooked, group to meet these needs is military spouses.

With their unique experiences, diverse skills, and high level of determination, the spouses and domestic partners of armed forces members have much to offer organizations of all kinds.

Keep reading to discover why hiring military spouses isn’t just the right thing to do; it’s the smart thing to do. From fostering a diverse culture to potentially building a long-term talent pipeline and accessing tax incentives, becoming a military spouse and family-friendly employer can benefit your business in many ways.

All about military spouses

To successfully recruit military spouses, you must first understand this unique demographic. The Society of Human Resource Management (SHRM) and USAA provide a detailed overview of them in the recent research report, Insight to Action: Leveraging the Potential of Military Spouse Talent.

According to the report, the average military spouse is:

  • Female
  • Age 35 or younger
  • Highly educated, with 34% having earned bachelor’s degrees (versus 24% of overall U.S. adults)

Additionally, military spouses face a much higher unemployment rate than the national average: 21% versus 4.1% as of September 2024. This inflated rate is mainly due to factors associated with their frequent moves: a lack of a local network, gaps in employment, limited childcare access, licensing and certification issues across states, etc.

The benefits of hiring military spouses

Despite the setbacks they face, military spouses can improve businesses in various ways. Here’s why you should consider recruiting from this community:

Flexibility and resilience

Military members’ partners often wear multiple hats. Many coordinate their family’s moves, manage household finances, act as advocates, volunteer, and more.

Through these experiences, they’ve likely gained valuable skills and overcame many personal challenges, meaning they may smoothly adjust to a new organization, role, and team.

Highly skilled

As mentioned above, military spouses are very knowledgeable, and many have earned advanced degrees. They are also eager to learn and apply their skills, with 45% considering themselves underemployed and working in roles that don’t fully utilize their abilities.

Cultured

Due to their frequent moves, military households often experience many different locations and cultures. These broad horizons can bring fresh perspectives, positively affecting company culture and promoting innovative thinking.

Ongoing recruiting pipeline

If they must leave, military spouses can connect you to job candidates within their community. These introductions can help business leaders quickly find top talent, save on recruitment costs, and expedite the hiring process.

Demonstrate a commitment to diversity

Thoughtfully networking, recruiting, and employing military spouses shows that your company strives to understand and accommodate this demographic’s unique challenges. This can positively contribute to the organization’s diversity, equity, and inclusion (DEI) efforts.

Potential tax benefits

When an organization employs armed service personnel’s spouses and domestic partners, they may also become eligible for certain tax incentives. For example, the SECURE 2.0 Act enables businesses with less than 100 employees to earn tax credits if they provide the following to spouses of active-duty service members:

  • Immediate eligibility for plan participation (within two months of hire)
  • Eligibility for any matching or non-elective contribution that they would have been eligible for otherwise at two years of service
  • Immediate full vesting in all employer matching contributions

A bill, S.596 – the Military Spouse Hiring Act, has also been introduced to expand the Work Opportunity Tax Credit (WOTC) to include qualified military spouses as a targeted group. More information on the bill’s progress can be found here.

Note: This is not an exhaustive list of SMB tax implications. Please refer to your accountant and/or tax experts for more information.

A hiring and retention strategy gap

An interesting trend exists when it comes to hiring military spouses: many companies see the value in doing so, yet most haven’t implemented strategies to achieve this.

According to the above-referenced SHRM report, approximately 80% of HR professionals think hiring military spouses is appealing. However, just 16% say they have a program to hire and retain them. Further, only 48% feel their organization understands the specific hurdles that military spouses encounter.

Implementing a plan to effectively recruit and retain this talent often pays off. SHRM found that 86% of businesses with formal military spouse-specific recruitment programs believe they are effective at hiring this demographic (compared to 30% of companies without programs).

6 ways to successfully recruit and retain military spouses

So, what should a military spouse employment strategy include? Here are six steps to get started:

1. Learn about them and engage in outreach

Becoming familiar with this demographic’s perspective, pain points, and aspirations is the first step to attracting them to your organization. Business leaders can engage with organizations like Hiring Our Heroes, Blue Star Families, and the Military Spouse Employment Partnership, which provide resources for hiring military spouses, post job listings, host recruiting events, and more.

2. Offer flexibility

When military spouses have flexible work schedules, they can better focus on the needs of both their families and employers. Remote work can help organizations entice these workers to stay, as it allows them to more easily tend to personal responsibilities and potentially even remain employed at your organization if/when they move.

3. Avoid interview bias

Keeping an open mind is crucial when hiring military spouses. While their resumes may reflect employment gaps or a slower career progression, this doesn’t make them any less qualified. Business leaders and HR teams should review how to avoid the different types of interview bias and consider implementing artificial intelligence (AI) tools to help minimize unconscious human bias during the hiring process.

4. Focus on retention

The above SHRM research reveals that 60% of businesses find it more challenging to retain military spouses than employees with no military affiliation. However, companies with retention strategies for this workforce segment are twice as likely to say they effectively retain them. Further, SHRM found that the most impactful strategies include things like flexible scheduling, remote work, and employee resource groups (ERGs).

Treating military spouse employees the same as the rest of your workforce is also critical. In fact, regardless of moving regularly, your military-affiliated staff may stay even longer than other workers. Military families remain at a station for an average of two to four years; this aligns with the national average employee tenure of 3.9 years. It’s important to demonstrate that you respect and value all employees equally.

Lastly, if it comes time for a military-affiliated worker to move, business leaders can consider keeping them on board as a remote employee or identify potential transfer options for in-person work.

5. Review FMLA military leave protocols

If you’re looking to hire military spouses, it’s wise to review the Family and Medical Leave Act (FMLA)’s military family leave policy. Provisions include:

  • Qualifying Exigency Leave, which may be taken by eligible employees when their spouse, parent, or child is a military member is deployed or has been notified of an impending deployment to a foreign country.
  • Military Caregiver Leave, which may be taken by eligible employees whose spouse, parent, child, or next-of-kin is an injured or seriously ill servicemember or veteran.

Failure to adhere to the FMLA may result in investigations, lawsuits, and fines, which is why some employers subcontract their risk and compliance management to an HR outsourcing company.

6. Partner with a PEO

Successfully attracting and retaining military spouses involves many moving parts, from fairly reviewing resumes to ensuring compliance with relevant employment laws. Managing this can be challenging for any organization, especially small businesses.

That’s when a professional employer organization (PEO) comes into play. PEOs are a type of HR outsourcing firm that specializes in managing their customers’ human resources, recruiting, employee benefits, payroll, compliance, and more.

For example, ExtensisHR provides:

Powerful potential awaits

When companies recruit military spouses, they’re not just hiring employees—they’re bringing on individuals who can thrive in the face of change, rise to challenges, and provide global perspectives. With so many of these talented people looking for work, the time is now to strategize how to best attract and retain them.

How can ExtensisHR help you become a military spouse-friendly employer? Explore our PEO solution, or contact us today to learn more.

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