ENGAGE Research Identifies Top 2017 Employee Tenure Trends and a Tightening Labor Market
August 8, 2017 – An already tight labor market has likely only continued to tighten over the past 18 months, an analysis of ENGAGE Talent tenure data shows.
The study by ENGAGE data scientists, which covered 50 million US workers and professionals, concluded that the current median job tenure is 3.67 years.
That’s six months less than the Bureau of Labor Statistics’ most recent finding: 4.2 years in January 2016. That in turn was down from 4.6 years in January 2014.
More recent BLS data also show tightening of the labor market. Job openings have outpaced hires every month except for two over the last two years, while unemployment has continued to trend downward. This indicates increased labor demand and dwindling labor supply.
Tenure and Job Level
Not surprisingly, job level also plays a large role on tenure in current position. This analysis reveals some intriguing findings, including:
As one would likely expect, across jobs—excepting board members—the lower the job level, the shorter the current median tenure tends to be. Executives’ current tenure is nearly twice that of non-managers. The median job tenures by job level across jobs are:
IT is an exception to the rule above, with vice presidents, directors and managers having longer median tenure than executives.
The 75th percentile for current executive tenure is 11.17 years, three years longer then the 75th percentile for directors and five years longer than the 75th percentile for non-management.
Across job levels, the 25th percentile for tenure has a much smaller range, with board members the shortest at 1.5 years and executives the longest at 2.92 years.
For non-management, the top four current median job tenures are for wealth management (4.25 years), database (4.17), change management (4.17), doctor (4), with skilled trade and civil engineering tying for fifth (3.92).
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The Top and Bottom Jobs by Median Tenure
The economy, of course, isn’t the only factor that has an impact on median job tenure. For example, the type of job has a large impact. Looking at the top and bottom jobs by tenure, it generally appears that jobs requiring more training, skill, and education tend to have longer tenures, which also most likely correlates with higher salaries. The one exception here is athletes, who have shorter tenure but often much higher pay. (If only we could all be professional athletes!)
When Do People Leave Jobs?
We can also break down the tenure of past positions, which allows us to evaluate when people actually leave jobs. Here are some findings from analyzing this data:
- Fifty percent of hospitality managers change jobs within two years, while half of engineering managers stayed four years or longer.
- Over time, people in “technical” jobs have been less likely to change jobs than people in other job functions.
- HR directors and vice presidents have been less likely to change jobs than their peers in most other departments. On the other hand, HR professionals in non-management roles have been more likely to change jobs than their peers in most other departments.
- Marketing tends to have one of the highest turnover rates for non-management professionals. Nearly eight of 10 professionals (75%) in non-management marketing roles left within five years. And 50% didn’t last two years.
- Executives in the legal profession have been the least likely to change jobs, with a median tenure just under seven years, followed by investment executives at 6.5 years. Executives in marketing have been the most likely to change jobs, with a median tenure around 3.5 years, followed by IT executives at just less than four years.
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How Employers Can Use Tenure Data
Tenure data aren’t just interesting. They are helpful for talent strategy, including the areas of succession planning, building a candidate pipeline, and recruiting passive candidates—all of which are more important given today’s high turnover rates.
Here is a quick look at how tenure data can help in each area:
Succession planning — Knowing, for each job type, when managers and above tend to leave on average tells employers when they are likely to need to replace those key employees as a group. They should plan accordingly with preparing internal talent to potentially take over those roles.
Candidate pipeline — Similarly, knowing median tenure for various job roles helps indicate to employers how robust a candidate pipeline should be for those roles.
Passive candidate recruiting — Comparing how long other employers’ individual workers have been in their current roles with the median tenure for those roles can help indicate whether those workers are more or less likely than average to be interested in having a job conversation.
Clearly, tenure can vary significantly across job roles. While knowing overall tenure data is a good indicator of the overall strength of the labor market, it’s important to look closely at the data when evaluating them to use in employer talent strategies. This is why employee tenure is among the factors considered by our ENGAGE predictive recruiting solution, which enables employers to strengthen their succession planning, candidate pipeline, and passive candidate recruiting.
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