Capita is to take over the entire recruitment and selection process for both the Regular and Territorial Army.
The company will deliver the Recruiting Partnering Project from March 2013, in a deal valued at around £44m a year for 10 years.
The Army said the new set up would release over 1000 military recruiters back to the front line, and deliver hundreds of millions of pounds in benefits to the armed forces.
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Under the scheme the Army will be in charge of recruitment policy, entry criteria and assessment standards.
Capita will deliver the entire process for the attraction and recruitment of soldiers and officers.
It will also provide an information and communications technology platform to underpin recruitment for the Royal Navy, Army and Royal Air Force.
Capita Chief Executive Paul Pinder said his firm would provide "a modern approach which will improve contact between recruiter and potential recruit, reduce the time and cost to enlist and reduce training wastage".
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