Industry News

On February 28, 2019, the Employee Benefit Research Institute (EBRI) released its issue brief, Trends in Employee Tenure, 1983–2018. This study examines data on U.S. employee tenure (or the amount of time an individual has been with a current employer). It uses U.S. Census Bureau data from the Current Population Survey (CPS) to examine the tenure with current employers of wage and salary workers from 1983–2018.  When the labor market has been the strongest, the tenure of workers has tended to be shorter, as more individuals start new jobs by being newly employed or by changing jobs during a strong economy.

Key findings include:

• Since 1983, the median tenure of all wage and salary workers ages 25 or older is about five years.
• Typically, the distribution of tenure levels among workers ages 20 or older has been trending toward longer tenures, but shorter tenures have increased in recent years.
• Compared to 2012, median tenure decreased in all groups. Furthermore, the distribution of worker tenure increased in the lowest levels of tenure (two years or less).
• For career jobs, the highest median tenure level for any age group (15.3 years in 1983 for males ages 55–64) does not cover an entire lifetime career, since the median worker would not have started his or her current job until after age 40. In addition, the percentage of workers in both the 55–59 age group and the 60–64 age group with 25 or more years of tenure has been about 20% when these workers would be ending their working careers. Consequently, about 80% of workers at these ages have tenures less than 25 years, which would be less than a full working career.
• There is a significant difference between private-sector and public-sector workers’ tenure distributions. Private-sector employers have maintained a relatively constant and modest percentage of long-term employees (25 or more years of tenure). In the public-sector, this group has increased significantly through 2004 before trending down through 2018. Therefore, public-sector employers are facing the retirement of a significant number of their most experienced workers, but this issue has been lessening.

According to EBRI, “Most workers have changed jobs during their working careers, and the evidence suggests that they will continue to do so in the future. This … has several important implications — potentially reduced or no defined benefit plan payments due to vesting schedules, reduced defined contribution plan savings, lump-sum distributions that can occur at job change, and public policy issues both through lower retirement incomes of the elderly population and the loss of experienced, public-sector workers likely to be retiring soon.”

The summary is available here.