Oregon Labor Market Information System
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Should I Stay or Should I Go? The Demographics of Employee Tenure

Published Jan-15-2013

 
The relationship between employers and employees has changed quite a bit over the years as work arrangements have adjusted to adapt to new technologies and lifestyles. And as the nature of work has changed, so have retention rates.

There are many factors that influence how long a person stays in a job: the appeal of the work; pay; benefits; work schedule; and commute, to name a few. Likewise, there are a number of reasons why people leave a job: they find a new position, get laid off, or retire. These examples reflect the broader trend of job tenure, or the length of time a worker remains in the same job.

Tenure Patterns by Age, Educational Attainment, and Gender
 
Job tenure measures how long a given employee has worked for the same employer. Job tenure data are sometimes used as a measure of job security, as increasing tenure could be interpreted as a sign of greater stability. While this might be true during periods of economic growth, economic downturns cause people to hold on to jobs for a longer period of time. This appears to be the case with the 2007 to 2009 recession, as there has been a notable rise in median job tenure over the past six years: between 2006 and 2012 this figure rose from 3.8 to 4.6 years. Because these data are collected through the Current Population Survey every two years, it's difficult to judge just how fast this growth occurred.

Research from the Federal Reserve Bank of St. Louis suggests that job tenure is impacted by changes in demographics, the economy, and technology. Some of these effects can be seen in the tenure differences among age groups, gender, and educational attainment of the U.S. workforce. Although Oregon data are unavailable, it's very likely that Oregon follows national tenure trends.

In general, workers keep jobs for longer periods of time as they get older, and then tenure starts dropping around retirement age.

While this pattern held true in the 1990s and early 2000s, data from 2006 to 2012 reveal that instead of falling, median tenure has actually risen for the 55 and over age groups. Graph 1 shows that after the recession, these workers held jobs more than one year longer than similar workers prior to the recession.

Tenure for younger age groups has remained fairly stable over time, though there has been a slight increase of six months or less for workers age 25 to 54.

The difference between men and women's job tenure has changed drastically over the past three decades, with the gap narrowing from one year to a little over one month (Graph 2). This is mainly due to women's increased participation in the workforce.

Men's tenure was fairly stable through the mid to late 1980s before dropping in the 1990s, and then rising throughout the last decade. It seems that neither gender's tenure was disproportionally affected by the 2007 to 2009 recession, as both men and women saw little change during that time.

When it comes to education, workers with higher degrees tend to stay in jobs longer. The median tenure for college graduates was 5.5 years in 2012, compared with 4.8 years for workers having less than a high school diploma. However, grouping all of the college-educated workers together masks some important details.

As shown in Graph 3, workers without a college degree stay anywhere between 4.8 to 5.8 years in a job; the number for those with a bachelor's degree is right in the middle of these figures. Median job tenure for master's degree holders is the highest of any category, at 6.3 years, while tenure for doctoral or professional degree holders nearly matches that of associate degree holders.

Overall, the relationship between educational attainment and the length of time a worker stays in a job is not entirely linear: an increase in education does not always correspond to an increase in tenure.

Graph 1
Job duration rises with age
Graph 2
Woment's job tenure catches uo to men's
Graph 3
Median job tenure by educational attainment U.S. workers 2012
Job Tenure Trends by Industry
 
As shown in Table 1, public sector tenure is nearly twice as long as that of the private sector. The government workforce is older, on average, than other industries, which places upward pressure on median job duration. Government workers also have a higher rate of unionization, which can lead to higher tenure.

Manufacturing and transportation and utilities also employ a high concentration of unionized workers, which may be one reason why these industries have the first and second-longest tenure, respectively, in the private sector.

On the opposite end of the spectrum, industries that tend to employ temporary and seasonal workers have lower tenure. Leisure and hospitality, which often hires younger workers, has the shortest median tenure at 2.4 years. The wholesale and retail trade workforce, which also tends to be younger, has the next shortest job duration at 3.7 years.

Table 1
Median Years of U.S. Job Tenure by Industry
Industry 2012
Total, 16 years and over 4.6
Private sector      4.2
     Agriculture and related industries 4.1
     Construction     4.3
     Manufacturing    6.0
     Wholesale and retail trade       3.7
     Transportation and utilities 5.6
     Information 5.4
     Financial activities   4.9
     Professional and business services      3.8
     Education and health services      4.4
     Leisure and hospitality      2.4
     Other services    3.8
Public sector      7.8
     Federal government     9.5
     State government    6.4
     Local government    8.1
Source: Current Population Survey, U.S. Census Bureau
Summary
 
Job tenure is affected by a number of different variables. Over the past decade, median tenure has risen by nearly one year, and much of this is due to the 2007 to 2009 recession, in addition to an aging workforce. Demographic changes and the business cycle will continue to have a significant impact on tenure.