Employee turnover has been a thorn in businesses’ sides for decades. Now, COVID-19 has exacerbated the issue by adding another layer of complexity to retaining workforces.
With The Great Resignation in full swing, many organizations are beginning to ratchet up employee retention efforts to stave off the turnover and the exorbitant costs that come with it.
But before you can tackle tenure, you have to understand it. This article breaks down the current state of employee tenure and what your organization can do to improve morale and drive industry-leading retention.
What is the Tenure of an Average Employee?
Despite employee turnover remaining a significant problem for businesses, employees are in fact staying with companies longer today than they did 25 years ago.
In 1996, the average employee stayed with a company between 3.5 and 3.6 years. But by 2014, the average tenure had increased by a full year, putting the average tenure at 4.6 years per company.
The Bureau of Labor Statistics hasn’t released a report yet for 2021 or 2022. But in 2020 the average decreased slightly to 4.1 years. However, that figure is still a marked improvement over mid-90’s figures.
“Despite employee turnover remaining a significant problem for businesses, employees are in fact staying with companies longer today than they did 25 years ago.”
Employees in management and/or professional occupations tended to stick around a bit longer, with an average tenure of 4.9 years. Meanwhile, workers in service occupations averaged just under two years on the job.
A Deeper Dive into Average Tenure
Many intersecting factors affect average tenure. For example, industry and demographics both play a role in how long someone is likely to stay at a job based on averages.
Job Hopping by Generation
It should be no surprise that an employee’s age affects how long they stay in one role.
From age 18 to 24, the American worker will hold an average of 5.7 jobs, but from 25 to 34, that number often shrinks to 4.5 jobs. This trend continues through the average worker’s late 40’s and into their 50’s when they’ll average just 1.9 jobs from age 45 to 52.
The median tenure for workers also shows a stark disparity between the youngest and oldest employees in the workforce.
25 to 34-year-old workers averaged just 2.8 years in a role before transitioning to a new company or position. Meanwhile, senior workers between the ages of 55 and 64 spend more than three times as long in a position, with an average median tenure of 9.9 years.
Job Hopping by Sex
The Bureau of Labor Statistics reports little difference in the number of jobs held over a career between the sexes. Men average 12.5 jobs over their lifetime, while women come in just behind at 12.1 jobs.
Job Hopping by Race
Race has a minor effect on job-hopping for entry-level and early career workers. On average, white workers will make 5.9 job changes from age 18 to 24, while Latino workers will hold 5.0 positions. Black workers average 4.8 job changes over the same six-year period.
This difference becomes even more marginal as workers age and progress in their careers. From 25 to 34 all three of the above races average between 4.3 and 4.6 jobs, and the average number of jobs held is identical by age 45 to 52, at 1.9 jobs.
Job Hopping by Industry
Median tenure is most significantly related to industry. Some industries boast average retention periods of over five years, while others struggle to break 24 months. Let’s take a closer look at median tenures by profession and industry.
Law
The legal industry boasts one of the longest median tenures out of all industries, at 5.8 years. High wages, solid benefits, and a high barrier to entry all help shore up legal turnover and boost tenure lengths.
Healthcare
The healthcare industry’s median tenure has dwindled to 2.8 years after the onset of the coronavirus pandemic.
Engineering
Engineering is another industry with long tenures and low turnover. Engineers average a considerable 5.1 years on the job before transitioning to a new position or company.
Automotive
Attracting, developing, and retaining employees is one of the most significant challenges for employers in the automotive industry. Even automobile dealerships for multinational luxury brands like Mercedes-Benz struggle to recruit and retain high-performing employees.
B2B SaaS Sales
B2B SaaS employees have some of the shortest tenures in the professional world. The average B2B SaaS sales rep has a tenure of 18 months, which is a far cry from industries like law and engineering.
Insurance
Insurance also has remarkably long median tenures, with an industry average of 5.5 years.
Unlike many industries with traditionally long average tenures, insurance has seen only a marginal drop in employee tenure during the Great Resignation.
Manufacturing and Distribution
Wage and salary workers in the manufacturing and distribution industry report better-than-average median tenures, at 5.1 years.
However, absenteeism and a turnover rate of 37% continue to plague the growth and profitability of manufacturing and distribution organizations.
“One of the primary methods to reducing turnover and improving employee retention is making the right hiring decisions when building your teams.”
Retail
The retail industry’s median tenure just barely surpasses two years, with an average of 25 months. With average turnover rates exceeding 60% in the retail industry, poor retention poses a significant obstacle to profitability for retail organizations in 2022.
Call Centers
Workers at call centers have a median tenure of just under two years, at 22 months. And call center employees between ages 20 and 24 don’t even make it that long, with average tenures lasting just 1.1 years.
This tenure period poses a significant problem for call centers, especially as replacement costs rise. Recent studies place the cost to replace call center employees between $5,000 and $7,000.
Common Reasons Why Employees Change Jobs
- Career advancement opportunities
- Seeking stronger compensation packages
- Fringe perks and benefits
- Relocation opportunities
- Leaving a stressful or toxic work environment
- Better work-life balance
- Company or commission restructuring
Increase Tenure and Decrease Employee Turnover with PerceptionPredict
Improving tenure and lowering turnover rates can save your organization hundreds of thousands of dollars in recruitment and onboarding costs.
One of the primary methods to reducing turnover and improving employee retention is making the right hiring decisions when building your teams. PerceptionPredict specializes in leveraging advanced and unique predictive analysis software to revolutionize the way organizations recruit and hire employees.
Our Performance Fingerprints provide data-driven assessments that screen work experience, skill sets, and personal and professional traits to create extremely accurate forecasts of crucial performance indicators, including length of tenure.