Summary
This study examines data on employee tenure — the amount of time an individual has been with his or her current employer — of American workers. It uses U.S. Census Bureau data from the Current Population Survey (CPS), including the most recent January CPS data, to examine the tenure with current employers of wage and salary workers from 1983–2018.
While some believe current American workers change jobs more frequently than was the case for past generations, the data on employee tenure show that individuals holding only one job for their entire career (career jobs) never actually existed for most workers and continue not to exist for most workers. Furthermore, 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 due to more opportunities from a strong economy.
Here are the key findings:
- Over the past 35 years, the median tenure of all wage and salary workers ages 25 or older has stayed at approximately five years.
- This overall trend masks a small but significant decrease in median tenure among men (which had been increasing until declines in 2016 and 2018) and an offsetting increase in median tenure among women.
- The fact that the gender-distinct trends have generally moved in opposite directions has led to overall constancy in the tenure statistics. However, the median tenures by gender have been moving together in recent years.
- The distribution of tenure levels among workers ages 20 or older had been moving toward longer tenures until the most recent years, where shorter tenures have gained share.
- Compared to 2012, median tenure decreased in all groups. In addition, the distribution of worker tenure showed a sizable increase in the lowest levels (two years or less) of tenure. These results indicate that both more individuals have jobs and individuals who had been working changed jobs — potentially to better jobs — as the economy has improved, so that the overall tenure distribution has moved to shorter tenures.
- The difference between private-sector and public-sector workers’ tenure distributions is quite striking. While private-sector employers in general have been able to maintain a fairly constant and modest percentage of long-term employees (25 or more years of tenure), public-sector employers have seen this group grow significantly through 2004 before trending down through 2018. Consequently, public-sector employers are facing the retirement of a significant number of their most experienced workers, although this issue is somewhat abating in the most recent years.
- As for career jobs, the highest median tenure level for any age group (15.3 years in 1983 for males ages 55–64) certainly does not cover an entire lifetime career, since the median worker would not have started his or her current job until after age 40. Furthermore, 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 either just above or just below 20 percent at a time that these workers would be ending their working careers. Consequently, approximately 80 percent of workers at these ages have tenures less than 25 years, which would be less than a full working career.
- These tenure results indicate that, historically, most workers have changed jobs during their working careers, and all evidence suggests that they will continue to do so in the future. This persistence of job changing over working careers 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.
- Although tenure is not a good measure of job security, it does provide insight into how long workers choose to or are allowed to remain with their current employers. This idea is particularly relevant over the last 10 years, as unemployment remained high in 2009–2012, when tenure was generally increasing. However, with the unemployment rate falling in 2012 and continuing through 2018, the percentage of workers with shorter tenures increased. Therefore, now with the decrease in the unemployment rate, more individuals appeared to have entered the labor force or changed jobs.