Employee Tenure Trends, , p. 2

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1 Sept. 20, 2017 Vol. 38, No. 9 Employee Tenure Trends, , p. 2 A T A G L A N C E This study examines employee-tenure data 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 While some have expressed the view that current American workers change jobs more frequently and have less employment security than was the case for past generations, the data on employee tenure the amount of time an individual has been with his or her current employer show that career jobs never actually existed for most workers and continue not to exist for most workers. Here are the key findings: The median tenure with their current employers for all wage and salary workers ages 25 or older was 5.1 years in 2016, compared with 5.5 years in 2014 (highest year), 4.7 years in (lowest years), and 5.0 years in The median tenure for male wage and salary workers ages 25 or older was 5.2 years in 2016 (down from 5.5 years in 2014), compared with 4.9 years in (lowest years) and 5.9 years in 1983 (highest year). The median tenure for female wage and salary workers ages 25 and older was 5.0 years in 2016, which was down from 5.4 years in 2014 (highest year) but up from 4.2 years in 1983 (lowest year). Male workers ages experienced the largest change in their median tenure from from a level of 15.3 years, which would not be considered a full career, in 1983 to 9.5 years in 2006, 10.7 years in 2014, and 10.2 years in The highest median tenure level for females was 10.2 years for those ages in 2014, which decreased to 10.0 years in 2016 but was above the 9.8 years in The median tenure of public-sector workers has been significantly longer than the median tenure of privatesector workers from 1983 to The public sector median tenure has ranged from two-thirds longer to just over two times longer. In 2016, the median tenure for public-sector workers was 8.5 years compared to 4.1 years for private-sector workers. The distribution of tenure had been moving to longer tenures from , when 52.7 percent of wage and salary workers ages 20 or older had been with their current employers for 5 or more years. In the most recent years, shorter tenures have increased where in percent of these workers have tenure less than five years. The percentages of wage and salary workers ages with 25 or more years of tenure in 2016 were below their peak values in However, for workers ages 60-64, after declining from 1983 (23.3 percent) to 2006 EBRI Education and Research Fund 2017 Employee Benefit Research Institute

2 (16.6 percent), the percentage with 25 or more years of tenure, despite a dip in 2010, increased through 2014 (21.6 percent) before a drop off in 2016 (19.8 percent). The percentage of those ages with 25 or more years of tenure decreased from 1983 (22.7 percent) to 2012 (17.1 percent) before increasing through 2016 (18.9 percent). The percentage of workers ages with 25 or more years fell from 12.9 percent in 1983 to 8.8 percent in The data on employee tenure looking at both the median tenure levels and the percentage of workers above various tenure lengths indicated that career jobs didn t exist for most workers in the early 1980s and have continued not to exist for most workers. 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, lump sum distributions that can occur at job change, and public policy issues both through lower retirement incomes of the elderly population because of benefits lost at job change and the experience of the public-sector labor force, which has workers with higher levels of longer tenure who are likely to be retiring soon. From 2014 to 2016, the median tenure decreased for private-sector workers and the share of workers with shorter tenure levels increased, suggesting that both new workers have been added to the private sector labor force and workers already there have changed jobs, potentially to better jobs, as the economy has improved. As the unemployment rate started decreasing in 2012 and continued through 2016, the percentage of workers with shorter tenures increased. While workers who have been at their jobs 10 or more years seem to be staying in them, with the decrease in the unemployment rate more workers are starting new jobs or changing jobs, particularly those who previously had 5-9 years of tenure. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 2

3 Employee Tenure Trends, By Craig Copeland, Employee Benefit Research Institute Introduction Some have expressed the view that past generations of American workers can be fairly represented by a worker holding a career job staying with the same employer for most of his or her working years then retiring, while current American workers change jobs more frequently and have less employment security. In contrast, the data on employee tenure the amount of time an individual has been with his or her current employer show that career jobs never actually existed for most workers and continue not to exist for most workers. This indicates that the view expressed above may well reflect a change in workers expectations and security (generally defined as the workers perceptions of being able to continue in their current jobs) and not their actual experience. Of course, the tenure data addressed in this Notes article show the actual results, not the perception, of the ability to stay in a current job. This article updates previous Employee Benefit Research Institute (EBRI) publications that have examined employeetenure data of American workers. 1 The latest data on employee tenure from the January 2016 Supplement to the U.S. Census Bureau s Current Population Survey (CPS) are examined and compared with trends from previous CPS data on employee tenure. 2 Overall Tenure The median tenure for all wage and salary workers ages 25 or older was slightly higher in 2016, at 5.1 years, compared with 5.0 years in 1983, but lower than the 5.5 years of tenure seen in 2014 (Figure 1). Furthermore, the median tenure for male wage and salary workers was lower in 2016 at 5.2 years, compared with 5.9 years in 1983 and 5.5 years in In contrast, the median tenure for female wage and salary workers increased from 4.2 years in 1983 to 5.4 years in 2014, but decreased to 5.0 years in Consequently, the increase in the median tenure of female workers more than offset the decline in the median tenure of male workers, leaving the overall level slightly higher in 2016 compared with 1983 but lower than in Age and Gender A closer examination of the median tenure of wage and salary workers ages by age and gender using a longer time series shows that the median tenure for the oldest working males of this group (ages 55 64) declined steadily from a peak of 15.3 years in 1983 to 9.5 years in 2006 before increasing and reaching 10.7 years in 2012 where it held steady in 2014 before falling to 10.2 in 2016 (Figure 2). 3 However, because a male worker of this age with the median level of tenure would not have started this job until he was in his 40s, it would be difficult to consider it a career job. As the age category decreased, the median-tenure trend became flatter, showing a smaller change in the tenure level across time. The year-old-male tenure trend was virtually flat, at around three years. The median tenure in each age group decreased in 2016, except for those ages where tenure went from 8.2 years in 2014 to 8.4 years in For female wage and salary workers ages 25 64, the median tenure was relatively constant to increasing across all age groups since 1983, but with declines across each age group in 2016 (Figure 3). The largest increase from 1983 was among females ages 45 54, whose median tenure increased from 6.3 years in 1983 to 7.5 years in The median tenure of this group also had the smallest 2016 decline. Public vs. Private Sector Among all wage and salary workers age 20 or older, the median tenure level held steady, at or just above years from 1983 to 2008, with somewhat of a jump to 5.1 years in 2012 before moving back to 5.0 years in 2014 and 2016 (Figure 4). 4 Private-sector workers median tenure also held relatively steady from ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 3

4 Figure 1 Median of Tenure For Wage and Salary Workers Ages 25 or Older by Gender, All Male Female Median With Current Employer Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," at ftp.bls.gov/pub/news.release/history/tenure news, viewed January 30, 2007; Nov. 24, 2010; and stats.bls.gov/news.release/pdf/tenure.pdf, viewed October 3, 2012; viewed January 5, 2015; and viewed June 8, Figure 2 Male Prime-Age (25-64) Workers Median Tenure Trends, By Age, Median With Current Employer Ages Ages Ages Ages Source: Data (for 1951, 1963, 1966, 1973, and 1978) from the Monthly Labor Review (September 1952, October 1963, January 1967, December 1974, and December 1979) and from press releases (for 1983, 1987, 1991, 1996, 1998, 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2014, and 2016) from the U.S. Department of Labor, Bureau of Labor Statistics. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 4

5 Figure 3 Female Prime-Age (25-64) Workers Median Tenure Trends, by Age, Ages Ages Ages Ages Median With Current Employer Source: Data (for 1951, 1963, 1966, 1973, and 1978) from the Monthly Labor Review (September 1952, October 1963, January 1967, December 1974, and December 1979) and from press releases (for 1983, 1987, 1991, 1996, 1998, 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2014, and 2016) from the U.S. Department of Labor, Bureau of Labor Statistics. Figure 4 Median Tenure Levels For Wage and Salary Workers (Ages 20 or Older), By Sector, Total Public Sector Private Sector Median With Current Employer Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," at ftp.bls.gov/pub/news.release/history/tenure news, viewed January 30, 2007, and Nov. 24, 2010, stats.bls.gov/news.release/pdf/tenure.pdf, viewed October 3, 2012, and Employee Benefit Research Institute estimates from the January 2014 and 2016 Current Population Surveys. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 5

6 1983 to 2002, at around 3.5 years. Subsequently, the median tenure trended upward, reaching 4.3 years in 2012 and in 2014 before falling back to 4.1 years in However, the median tenure for public-sector workers increased from 6.0 years in 1983 to 7.5 years in 1998 before declining to 7.0 years in It remained at 7.0 years in 2006 and 2008 before increasing in 2010 to 7.1 years and to 8.3 years in In 2014, the median tenure fell back to 8.0 years before increasing to 8.5 years in From 1983 to 1998, median job tenure in the public sector increased significantly relative to the private sector until declining in Calculations from Figure 4 show that the public-sector median tenure was 2.14 times higher than that of the private sector in 1998, before it declined to 1.79 times higher in It remained at that level until it increased in 2012 to 1.93 times higher, but decreased to 1.86 in In 2016, public sector median tenure almost reached the 2.14 times higher than the median tenure of private-sector workers in 1998 by jumping to 2.07 times higher than that of private-sector workers. For male, private-sector, wage and salary workers age 20 or older, the median tenure trended slightly downward, from 4.2 years in 1983 to 3.8 years in 2002 before increasing to a peak of 5.3 years in 2012 with declines to 5.0 years in 2014 and 4.1 years in 2016 (Figure 5). In contrast, the median tenure of female, private-sector workers had a relatively consistent upward trend (except for slight dips in 1987 and 1998), from 3.1 years in 1983 to 4.6 years in 2012 and in 2014 before a decline to years in For male, public-sector workers, the median tenure had a flat-to-upward trend from 7.9 years in 1983 to 8.5 years in 2004 before falling back to 8.0 years in and increasing to 8.5 years in 2012 and 2014 and to 9.0 years in Female, public-sector workers median tenure level had an upward trend during the period, reaching a peak of 6.9 years in 1998 before falling to 5.9 years in Subsequently, the median tenure increased again reaching 8.3 years in 2012 before dipping to 8.0 in 2014 and rebounding to 8.5 years in Tenure Distribution The distribution of all wage and salary workers ages 20 or older across various levels of tenure was relatively stable from 1983 through 2016 (Figure 6). The changes that did appear over the period were increases in the percentage of workers with higher levels of tenure until The percentage of workers with 20 or more years of tenure increased from 8.9 percent in 1983 to 11.0 percent in 2012 before decreases to 10.9 percent in 2014 and to 10.6 percent in A corresponding decrease in the percentage of workers with one year or less of tenure resulted, declining from 25.7 percent in 1983 to 17.4 percent in The corresponding increase in the shortest tenure group began in 2012, when the percentage with this tenure increased to 19.5 percent before reaching 20.9 percent in The tenurelevel categories varied within fairly small ranges but generally toward longer tenure levels until In fact, the percentage of workers having at least five years of tenure reached 52.6 percent in 2012, the highest percentage over the period. However, in 2014, the distribution made a small shift toward shorter tenures with the percentage with at least five years of tenure falling to 52.1 and the percentage with two years or less increasing to 31.1 percent from 30.4 percent in In 2016, the movement toward shorter tenures accelerated, when the percentage of workers with less than five years of tenure was greater than 50 percent for the first time since 2008, reaching 50.6 percent. The constancy of the tenure distribution over time is less evident when analyzed by workers genders. While the percentage of male workers with the longest tenures (20 or more years) in 2012 (11.9 percent) and 2016 (11.4 percent) was similar to its 1983 level (12.4 percent), there was an upward trend in the percentage of male workers with less than five years of tenure from 1983 (49.4 percent) to 2002 (52.1 percent). However, the percentage with less than five years of tenure started decreasing in 2004 (despite a very slight increase in 2006), reaching 47.1 percent in 2012 (Figure 7). However, in 2014, the percentage with less than five years of tenure increased by 0.4 percentage points and by an additional 2.3 percentage points in 2016, attaining 49.8 percent. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 6

7 Figure 5 Median Tenure Levels For Wage and Salary Workers (Ages 20 or Older), By Sector and Gender, Median With Current Employer Public Sector Males Public Sector Females Private Sector Males Private Sector Females Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," and Employee Benefit Research Institute estimates from the January 2004, 2006, 2008, 2010, 2012, 2014, and 2016 Current Population Surveys. Figure 6 Employee Tenure Distribution: All Wage and Salary Workers (Ages 20 or Older), % 90% 8.9% 8.5% 9.4% 9.5% 9.5% 10.1% 10.3% 10.2% 9.8% 10.7% 10.9% 11.0% 10.9% 10.6% 80% 18.0% 17.9% 18.9% 17.6% 17.8% 18.1% 17.2% 17.0% 16.9% 17.4% 18.9% 19.2% 19.0% 19.2% 70% 60% 19.5% 20.1% 18.5% 20.9% 18.9% 18.1% 18.6% 20.7% 21.9% 21.0% 21.2% 22.4% 22.2% 19.6% 20 or More % 40% 16.6% 14.5% 15.8% 15.8% 16.4% 16.7% 17.9% 19.0% 17.4% 17.3% 19.2% 16.9% 16.8% 17.4% % 20% 10% 11.3% 11.7% 11.4% 25.7% 27.4% 26.0% 12.5% 13.1% 13.0% 13.9% 12.4% 11.9% 12.7% 23.1% 24.8% 2% 22.1% 20.7% 22.0% 20.8% 12.4% 17.4% 10.9% 11.4% 12.3% 19.5% 19.7% 20.9% >1-2 1 Year or Less 0% Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," at ftp.bls.gov/pub/news.release/history/tenure news, viewed January 30, 2007; Nov. 24, 2010; stats.bls.gov/news.release/pdf/tenure.pdf, viewed October 3, 2012; viewed January 5, 2015; and viewed June 8, ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 7

8 Female workers tenure distribution had a clearly different pattern, as the percentage with 20 or more years of tenure increased substantially, from 4.9 percent in 1983 to 10.1 percent in 2012 and 2014, but fell to 9.8 percent in 2016 (Figure 8). Furthermore, the percentage of female workers with less than five years of tenure decreased from 1983 (58.6 percent) to 1996 (53.8 percent) before increasing from 1998 (55.2 percent) to 2002 (55.7 percent). The percentage with less than five years of tenure again began decreasing, reaching 47.7 percent in However, from , as with men, the percentage of female workers with less than five years of tenure also increased, when in percent of female workers fell into this group. Older male and female wage and salary workers (ages 45 64) had different trends in the percentages with 10 or more years of tenure over the period. Among the male age groups examined, a decrease of 10.1 percentage points was the minimum change between 1983 and 2016 in the share of workers with 10 or more years of tenure (Figure 9). Males ages experienced the largest decline: from 57.8 percent in 1983 to 44.4 percent in 2016 (even with the slight increase in 2016 from 2014). For those ages years old, the percentage with 10 or more years in tenure had been increasing until 2014 reaching 59.1 percent from a low of 48.1 percent in 2006, which was a drop from 65.6 percent in 1983, but in 2016, this percentage dropped to 55.5 percent. In contrast, the percentage of female wage and salary workers of this age who had 10 or more years in tenure increased for each age group during the period, despite drops in each age group in 2016 (Figure 10). The share of female workers ages with 10 or more years of tenure went up from 33.0 percent in 1983 to 39.1 percent in 2016, a 6.1 percentage-point increase and the largest change, even with a drop of 0.3 percentage points in However, this trend peaked at 41.4 percent in 2000, declined to below 37 percent in 2004, and trended back upward through 2014 before the 2016 decline. The rest of the age groups had much smaller changes (no greater than 3.1 percentage points), and since 2004 have generally trended upward. Among older wage and salary workers (ages 45 64), the percentage having 25 or more years of tenure was lower in 2016 compared with 1983 (Figure 11). However, among those ages 60 64, the percentage with 25 or more years of tenure increased by over three percentage points from 2006 to 2008, after a fairly steep decline from 1983 to 2006 (23.3 percent to 16.6 percent). In 2010, the downward trend resumed for this age group with the percentage declining to 19.3 percent from 19.9 percent in 2008 before increasing to 21.6 percent in 2014 and decreasing to 19.8 percent in For those ages 55 59, a persistent decline occurred: from 22.7 percent in 1983 to 17.1 percent in 2012 before an uptick in 2014 to 17.9 percent and to 18.9 percent in The decline in the percentage of workers ages with 25 or more years of tenure was less dramatic but more consistent: from 12.9 percent in 1983 to 8.8 percent in In addition to differences by age and gender, tenure distribution was also significantly different across employment sectors. Among the longest-tenured, private-sector workers (25 or more years), after a significant drop in 1987 from 1983, the percentage of all private-sector workers (male and female combined) with 25 or more years of tenure had a steady-to-upward trend from before leveling off in 2016 (Figure 12). In contrast, the percentage of all public-sector workers with this tenure peaked in 2004 with a leveling off in The trend for male, private-sector workers with 25 or more years of tenure was downward from 7.7 percent in 1983 to 5.4 percent in 2006, but increased from 2006 to 2012 before a decrease in 2014 and The trend for female, private-sector workers has been upward, from 2.6 percent in 1983 to 4.9 percent in 2014 before a decline to 4.8 percent in 2016, leading to the overall percentage of private-sector workers with a minimal upward trend leveling off at 5.5 percent in In contrast, the percentage of public-sector workers (again male and female combined) with 25 or more years of tenure increased sharply through 2004 before declining (males) or flattening out (females and overall) through 2016: ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 8

9 100% 90% Figure 7 Employee Tenure Distribution: Male Wage and Salary Workers (Ages 20 or Older), % 11.6% 12.1% 11.6% 11.5% 11.6% 11.8% 11.4% 10.8% 11.9% 11.9% 11.9% 11.6% 11.4% 80% 70% 60% 50% 40% 19.7% 18.7% 19.6% 17.9% 17.7% 18.3% 17.5% 17.3% 16.8% 17.4% 19.1% 19.1% 19.0% 18.9% 18.5% 19.6% 18.4% 20.1% 18.3% 18.2% 18.6% 20.4% 21.5% 20.6% 21.4% 21.9% 22.0% 19.9% 15.0% 13.9% 15.3% 15.6% 16.4% 16.4% 17.5% 18.6% 17.2% 17.3% 18.5% 16.5% 16.6% 17.3% 20 or More % 20% 10.4% 11.1% 10.7% 12.5% 12.0% 12.6% 13.5% 11.9% 11.9% 12.3% 11.9% 11.0% 11.4% 12.1% >1-2 1 Year or Less 10% 2% 25.1% 23.9% 22.3% 24.1% 22.9% 21.1% 20.3% 21.8% 20.5% 17.1% 19.6% 19.5% 20.4% 0% Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," at ftp.bls.gov/pub/news.release/history/tenure news, viewed January 30, 2007; Nov. 24, 2010; stats.bls.gov/news.release/pdf/tenure.pdf, viewed October 3, 2012; viewed January 5, 2015; and viewed June 8, % Figure 8 Employee Tenure Distribution: Female Wage and Salary Workers (Ages 20 or Older), % 4.9% 6.5% 7.2% 7.4% 8.5% 8.7% 8.8% 8.8% 9.4% 9.9% 10.1% 10.1% 9.8% 90% 80% 70% 60% 15.9% 17.0% 20.7% 20.5% 18.2% 17.4% 17.9% 17.8% 16.9% 16.6% 17.0% 17.5% 18.7% 21.6% 19.5% 18.0% 18.7% 21.1% 22.2% 21.4% 18.6% 19.3% 19.0% 19.4% 21.0% 23.0% 22.4% 19.3% 20 or More % 40% 30% 20% 10% 18.4% 15.2% 16.4% 12.5% 12.4% 12.2% 27.8% 29.9% 28.1% 16.0% 16.4% 17.1% 18.3% 13.7% 13.2% 13.4% 14.3% 24.1% 25.6% 25.2% 23.1% 19.4% 17.7% 17.3% 13.0% 12.0% 13.3% 21.2% 22.4% 21.1% 17.6% 19.9% 17.4% 17.0% 12.5% 12.9% 10.9% 11.5% 17.7% 19.4% 20.0% 21.4% >1-2 1 Year or Less 0% Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," at ftp.bls.gov/pub/news.release/history/tenure news, viewed January 30, 2007; Nov. 24, 2010; stats.bls.gov/news.release/pdf/tenure.pdf, viewed October 3, 2012; viewed January 5, 2015; and viewed June 8, ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 9

10 70% Figure 9 Percentage of Male Wage and Salary Workers Ages Who Had 10 or More of Tenure, by Age, % 65.6% 66.2% 63.2% Ages 45 to 49 Ages 50 to 54 Ages 55 to 59 Ages 60 to 64 60% 55% 50% 45% 61.0% 62.3% 59.4% 58.5% 58.7% 56.5% 57.8% 57.5% 55.7% 54.9% 55.7% 53.7% 52.4% 53.0% 53.5% 50.8% 52.8% 51.6% 50.4% 49.0% 47.4% 56.8% 56.2% 56.5% 54.9% 5% 53.4% 53.6% 55.7% 52.4% 53.0% 51.3% 51.4% 51.0% 48.5% 49.7% 50.4% 48.1% 48.4% 48.1% 44.8% 45.4% 42.9% 43.5% 43.7% 59.1% 53.8% 49.9% 43.8% 55.5% 53.4% 50.4% 44.4% 40% Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," at ftp.bls.gov/pub/news.release/history/tenure news, viewed January 30, 2007; Nov. 24, 2010; stats.bls.gov/news.release/pdf/tenure.pdf, viewed October 3, 2012; viewed January 5, 2015 and viewed June 8, % Figure 10 Percentage of Female Wage and Salary Workers Ages Who Had 10 or More of Tenure, by Age, Ages 45 to 49 Ages 50 to 54 Ages 55 to 59 Ages 60 to % 55% 50% 45% 40% 52.6% 52.4% 51.0% 50.8% 42.5% 43.0% 53.1% 51.4% 43.4% 52.7% 52.1% 45.8% 53.0% 53.6% 52.5% 49.2% 45.8% 44.6% 41.4% 52.6% 49.9% 44.8% 51.0% 49.1% 48.4% 48.7% 44.1% 43.6% 5% 52.2% 54.8% 52.6% 51.2% 50.0% 45.5% 46.5% 45.0% 52.8% 46.3% 53.9% 52.6% 45.6% 35% 36.4% 39.3% 38.1% 38.4% 37.0% 36.2% 36.9% 36.7% 38.0% 38.3% 39.4% 39.1% 33.0% 30% Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," at ftp.bls.gov/pub/news.release/history/tenure news, viewed January 30, 2007; Nov. 24, 2010; stats.bls.gov/news.release/pdf/tenure.pdf, viewed October 3, 2012; viewed January 5, 2015 and viewed June 8, ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 10

11 Figure 11 Percentage of Wage and Salary Workers Ages Who Had 25 or More of Tenure, by Age, Ages 45 to 54 Ages 55 to 59 Ages 60 to 64 24% 23.3% 22% 22.7% 21.6% 20% 18% 16% 20.5% 20.2% 20.1% 19.9% 19.4% 18.4% 20.1% 19.8% 18.8% 17.0% 18.7% 17.9% 17.8% 17.5% 17.5% 16.6% 19.9% 17.6% 17.1% 19.8% 20.0% 19.3% 18.9% 17.3% 17.9% 14% 12% 10% 8% 12.9% 12.6% 11.9% 11.3% 11.4% 11.6% 11.7% 11.6% 10.6% 10.1% 9.7% 9.7% 9.2% 8.8% Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure," and Employee Benefit Research Institute estimates from the January 2004, 2006, 2008, 2010, 2012, 2014, and 2016 Current Population Surveys. Figure 12 Percentage of Wage and Salary Workers (Ages 20 or Older) With 25 or More of Tenure, by Sector and Gender, Public Sector Public Sector Males Public Sector Females Private Sector Private Sector Males Private Sector Females 12% 11.3% 12.7% 10% 8% 6% 4% 2% 8.4% 8.1% 8.0% 7.7% 6.0% 5.9% 5.4% 5.3% 5.9% 5.1% 4.2% 4.2% % 2.6% 2.6% 2.3% 2.6% 2.0% 10.2% 10.8% 10.0% 9.1% 8.7% 7.6% 7.9% 7.1% 7.3% 5.7% 6.1% 5.6% 5.7% 6.0% 5.8% 4.4% 4.4% 4.4% 4.6% 4.7% 3.7% 3.3% 2.8% 3.0% 2.6% 11.7% 10.8% 10.7% 11.3% 10.2% 10.3% 10.2% 9.5% 9.6% 9.8% 9.8% 9.7% 9.6% 8.3% 9.0% 9.1% 8.5% 8.6% 8.8% 8.8% 6.1% 6.2% 5.6% 5.4% 5.1% 5.2% 4.7% % 4.2% 4.4% 3.8% 6.4% 6.2% 6.1% 5.5% 5.6% 5.5% 4.9% 4.8% Source: U.S. Department of Labor, Bureau of Labor Statictics, "Employee Tenure," at viewed January 24, 2002 and Employee Benefit Research Institute estimates from the January 2004, 2006, 2008, 2010, 2012, 2014, and 2016 Current Population Surveys. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 11

12 Among male, public-sector workers, those with the longest tenure went from 8.1 percent in 1983 to 12.7 percent in 2004 before falling to 10.2 percent in 2010 and then increasing again reaching 10.8 percent in In 2016, a small decrease to 10.7 percent resulted. The increase was even greater among female, public-sector workers. Those with 25 or more years of tenure rose from 2.6 percent in 1983 to 9.1 percent in 2012 before a slight decline in 2014 to 8.8 percent, where it remained in The substantial decline in the percentage of male, public-sector workers with 25 or more years of tenure from resulted in an overall decline in this percentage for all public-sector workers. Consequently, the significant difference between the public and private sectors in the percentage of the longest-tenured workers narrowed the gap was 117 percent higher in 2004, but 83 percent higher in This gap declined again to 73 percent in 2014 (despite the public-sector percentage increase) because the private-sector increase was larger, before a leveling off at 75 percent in This result of a relatively higher percentage of long-tenure workers has implications for public-sector employers, as higher shares of their work forces are reaching ages where many will retire. Thus, at a time of growth in the nation s elderly population (which is more likely to need social services than the nonelderly population), the most experienced workers within government agencies providing these social services will likely be retiring. In contrast, private-sector employers, in general, do not appear to be facing this same issue, as they have employed a relatively consistent percentage of long-term workers from (even though this trend has had an upward movement from with a leveling off in 2016). Implications of Job Changes 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 a working career has several important implications for workers potential incomes in retirement: Defined Benefit Pensions Since defined benefit (DB) pensions that are final-average plans have formulas based on tenure and final average salary, workers who change jobs may not receive the maximum potential benefit from this type of plan because they do not remain with the same employers for extended periods. In fact, shorttenure workers (with less than five years in their jobs) may not qualify for any pension benefit at all due to five-year vesting schedules. Since the median length of employment for all wage and salary workers age 25 or older is 5.1 years, even the decreasing number of American workers who are currently participating in a DB plan are unlikely to receive a significant benefit from the plan. Lump-Sum Distributions A worker who changes employers must decide what to do with any retirement plan assets he or she has accumulated, a situation that has become more the norm due to the growth in employmentbased retirement plans that have a lump-sum distribution (LSD) option. 6 Thus, benefit preservation becomes an important concern for these employees as well as for their plan sponsors. If employees do not retain these assets in some type of savings vehicle for retirement, they may forgo an important source of retirement income. Without this source of income, many workers may face financial difficulties in retirement. Public Policy These decisions on LSDs and benefit preservation also have important implications for public policy, as enrollments in means-tested welfare programs could increase significantly if large numbers of retirees prematurely exhaust their own savings reserves. 7 Furthermore, the number of experienced, public-sector employees will likely drop during the period when the social programs are about to face tremendous increases in enrollment. This suggests that the public sector must work to retain experienced workers as they develop workers to replace those retiring. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 12

13 Conclusion Over the past 30-plus years, the median tenure of all wage and salary workers age 25 or older has stayed at approximately five years. However, the overall trend masks a small but significant decrease in median tenure among men (which has been increasing in recent years until 2016), offset by an increase in median tenure among women. Furthermore, the distribution of tenure levels among workers age 20 or older has remained relatively constant over this period, but with a tendency toward longer tenures, until the most recent years of the study where shorter tenures have gained share. Consequently, overall employee tenure has been remarkably stable since 1983, although the gender-distinct trends have generally moved in opposite directions until recently, when the median tenures by gender had been moving upward together through However, in 2016, median tenure decreased in all groups studied except for males ages and public-sector workers. The distribution of worker tenure showed a sizable increase in the lowest levels (two years or less) of tenure, while the highest levels (10 years or more) of tenure remained constant with drops of those with the middle levels of tenure. The difference between the median tenures of public and private sector tenures increased, as the private sector median tenure decreased while the public sector median tenure increased. These results suggest that both new workers have been added to the private sector labor force and workers already there have changed jobs, potentially to better jobs, as the economy has improved. The difference between private-sector and public-sector workers tenure distributions is quite striking. While privatesector employers in general have been able to maintain a fairly constant percentage of long-term employees (25 or more years of tenure), public-sector employers have seen this group grow significantly from before dropping in and increasing again in 2012 and 2014 where it remained in Consequently, publicsector employers are facing the retirement of a significant number of their most experienced workers. The trend between sectors had narrowed in the four most recent years (up to 2014) of the data, showing that longtime, publicsector workers may have reached a peak, but in 2016 the percentage of public-sector workers with 25 or more years of tenure held steady while the percentage declined for private-sector workers. 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 age group and 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. While the tenure levels presented in this article show that job stability has remained relatively constant over the past two decades, these data do not measure job security. For instance, an increase in workers median tenure may be interpreted to mean that job security has declined because those with shorter tenures have been let go and no longer have jobs, leaving the longer-tenured workers less secure. Or the median tenure could decline when workers feel more secure, have an increased ability to find other employment, and switch to better jobs. Conversely, workers who feel more secure in their current jobs may not be motivated to switch employers due to their security, which could lead to a higher median tenure. Consequently, 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. These ideas are particularly relevant in the most recent years as unemployment remained high in However, the unemployment rate started decreasing in 2012 and continued through 2016, while in 2014 and 2016, the percentage of workers with shorter tenures increased. Therefore, it appears that workers who have been at their jobs 10 or more years had been staying in them, but now with the decrease in the unemployment rate more workers are starting new jobs or changing jobs, particularly those with middle levels of tenure. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 13

14 Endnotes 1 See Paul Yakoboski, Debunking the Retirement Policy Myth: Lifetime Jobs Never Existed for Most Workers, EBRI Issue Brief, no. 197 (Employee Benefit Research Institute, May 1998); Paul Yakoboski, Male and Female Tenure Continues to Move in Opposite Directions, EBRI Notes, Vol. 20, no. 2 (Employee Benefit Research Institute, February 1999): 1 4; David Rajnes, Update on Employee Tenure, EBRI Notes, Vol. 22, no. 3 (Employee Benefit Research Institute, March 2001): 1 8; Craig Copeland, Employee Tenure, EBRI Notes, Vol. 24, no. 3 (Employee Benefit Research Institute, March 2003): 1 10; Craig Copeland, Employee Tenure: Stable Overall, but Male and Female Trends Differ, EBRI Notes, Vol. 26, no. 3 (Employee Benefit Research Institute, March 2005): 1 10; Craig Copeland, Employee Tenure, 2006, EBRI Notes, Vol. 28, no. 4 (Employee Benefit Research Institute, April 2007): 1 11; Craig Copeland, Employee Tenure, 2008, EBRI Notes, Vol. 31, no.1 (Employee Benefit Research Institute, January 2010): 1 12; Craig Copeland, Employee Tenure Trend Lines, , EBRI Notes, Vol. 31, no.12 (Employee Benefit Research Institute, December 2010): 2 12; Craig Copeland, Employee Tenure Trends, , EBRI Notes, Vol. 33, no.12 (Employee Benefit Research Institute, December 2012): 12 23; and Craig Copeland, Employee Tenure Trends, , EBRI Notes, Vol. 36, no. 2 (Employee Benefit Research Institute, February 2015): The latest data come from the January 2016 Supplement to the Current Population Survey (CPS), a monthly survey of approximately 60,000 households on demographics, labor force status, and other characteristics of the civilian, noninstitutionalized American population. The U.S. Census Bureau conducts this CPS supplement for the U.S. Department of Labor s Bureau of Labor Statistics (BLS). Tenure levels for previous years come from various other supplements to the CPS. For a further discussion of the data sources, see the Bureau of Labor Statistics Employee Tenure Technical Note, at (viewed June 19, 2017). Results of research from BLS and EBRI are compiled in this article to present various trends in employee tenure. See the EBRI publications, op. cit., and the Bureau of Labor Statistics Employee Tenure at (viewed June 19, 2017). 3 BLS reports that the results prior to 1983 are not directly comparable to those in 1983 and after. The results from those prior years are presented here to give an idea of the best estimate for tenure during that time. The tenure questions were again changed in 1996, so while the 1983 questions are close, the most consistent numbers across years start in The 2006 tenure release from BLS updated numbers going back to 1996 and made some very minor changes to some of the previously published data. See note in tables of the 2006 BLS press release on tenure at (last viewed June 19, 2017). BLS is now only reporting tenure levels back to See Bureau of Labor Statistics Employee Tenure at (viewed June 19, 2017). 4 This section focuses on workers ages 20 or older, whereas the prior section focuses on workers ages 25 or older or ages Consequently, these numbers are not directly comparable. The different ages are a consequence of matching trends from prior years of Bureau of Labor Statistics analyzes. 5 The number of wage and salary workers ages 20 years or older increased from million in 2012 to million in 2014 and to million in There 78.9 million of these workers in See Jack VanDerhei and Craig Copeland, The Changing Face of Private Retirement Plans, EBRI Issue Brief no. 232 (Employee Benefit Research Institute, April 2001) for a presentation of the increased reliance of retirees on assets from defined contribution plans. The Issue Brief also discusses the growth of cash balance plans, which typically allow retirees to take lump-sum distributions. Also, see Jack VanDerhei and Craig Copeland, ERISA At 30: The Decline of Private-Sector Defined Benefit Promises and Annuity Payments? What Will It Mean? EBRI Issue Brief, no. 269 (Employee Benefit Research Institute, May 2004) for an analysis of changes in defined benefit plans on retirees ability to maintain a similar lifestyle throughout retirement. See also Sudipto Banerjee, Annuity and Lump Sum Decisions in Defined Benefit Plans: The Role of Plan Rules, EBRI Issue Brief, no. 381 (Employee Benefit Research Institute, January 2013) for choices between annuities and LSDs from defined benefit plans. 7 See Craig Copeland, How Are New Retirees Doing Financially in Retirement? EBRI Issue Brief, no. 302 (Employee Benefit Research Institute, February 2007) for examination of how the cohort of retirees born in were managing their wealth as they started their retirement years; and Craig Copeland, Individual Retirement Account Balances, Contributions, Withdrawals, and Asset Allocation Longitudinal Results , EBRI Issue Brief, no. 429 (Employee Benefit Research Institute, January 2017) for a look at the pace at which retirees are withdrawing assets from their IRAs. ebri.org Notes Sept. 20, 2017 Vol. 38, No. 9 14

15 Where the world turns for the facts on U.S. employee benefits. Retirement and health benefits are at the heart of workers, employers, and our nation s economic security. Founded in 1978, EBRI is the most authoritative and objective source of information on these critical, complex issues. EBRI focuses solely on employee benefits research no lobbying or advocacy. EBRI stands alone in employee benefits research as an independent, nonprofit, and nonpartisan organization. It analyzes and reports research data without spin or underlying agenda. All findings, whether on financial data, options, or trends, are revealing and reliable the reason EBRI information is the gold standard for private analysts and decision makers, government policymakers, the media, and the public. EBRI explores the breadth of employee benefits and related issues. EBRI studies the world of health and retirement benefits issues such as 401(k)s, IRAs, retirement income adequacy, consumer-driven benefits, Social Security, tax treatment of both retirement and health benefits, cost management, worker and employer attitudes, policy reform proposals, and pension assets and funding. There is widespread recognition that if employee benefits data exist, EBRI knows it. EBRI delivers a steady stream of invaluable research and analysis. EBRI publications include in-depth coverage of key issues and trends; summaries of research findings and policy developments; timely factsheets on hot topics; regular updates on legislative and regulatory developments; comprehensive reference resources on benefit programs and workforce issues; and major surveys of public attitudes. EBRI meetings present and explore issues with thought leaders from all sectors. EBRI regularly provides congressional testimony, and briefs policymakers, member organizations, and the media on employer benefits. EBRI issues press releases on newsworthy developments, and is among the most widely quoted sources on employee benefits by all media. EBRI directs members and other constituencies to the information they need and undertakes new research on an ongoing basis. EBRI maintains and analyzes the most comprehensive database of 401(k)-type programs in the world. Its computer simulation analyses on Social Security reform and retirement income adequacy are unique. EBRI makes information freely available to all. EBRI assumes a public service responsibility to make its findings completely accessible at so that all decisions that relate to employee benefits, whether made in Congress or board rooms or families homes, are based on the highest quality, most dependable information. EBRI s Web site posts all research findings, publications, and news alerts. EBRI also extends its education and public service role to improving Americans financial knowledge through its award-winning public service campaign ChoosetoSave and the companion site EBRI is supported by organizations from all industries and sectors that appreciate the value of unbiased, reliable information on employee benefits. Visit for more th Street NW Suite 878 Washington, DC (202)

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