Employer and occupational tenure: 1991 update.
Although cumulative occupational tenure is inherently longer than continuous employer tenure, they mirror each other in most variables. Regardless of the measure used, tenure increased steadily with age. Generally, men had more tenure than women; whites, more than blacks and Hispanics; and college graduates, more than individuals with less education. In addition, self-employed individuals had more tenure than wage and salary workers, and full-time workers had more than those on part-time schedules. (See table 1 .)
Factors affecting tenure
Tenure, long or short, is a reflection of labor force demographics, nature of work, the economy in general, and to a lesser degree, job satisfaction. Intuitively, longer tenure would suggest high worker satisfaction, a stable economy, and a strong relationship between worker and job. Conversely, shorter tenure would suggest low job satisfaction, a volatile economy, or weak employee-job relationships. More tangible factors influencing tenure include age, gender, industry or occupational growth, immigration, educational attainment and training, and compensation. The following discussion examines these variables as they affect both tenure with employer and tenure in occupation.
Age. Median employer tenure ranged from 1.2 years for workers aged 16-24 to 12.4 years for workers aged 55-64. Median occupational tenure ranged from 2 years to 17.4 years for workers in these age groups. Young workers have short tenure because they have had little time in the labor force and are more likely to change jobs frequently. Most workers tend to settle into career paths, however, and the increase in tenure with age indicates an unwillingness or an inability to switch jobs mid-career and perhaps lose accrued benefits. Interestingly, median employer tenure dips for workers age 65 and older, whereas median occupational tenure continues to increase. The difference may result from some workers retiring from one organization, then joining another organization without changing occupations.
Employment trends. In general, for workers in industries and occupations with rapidly growing employment, median tenure is low, whereas for those in industries and occupations in which employment is growing slowly or decreasing, median tenure is high. Industries with declining employment, such as manufacturing and mining, do not need new workers to replace all employees who resign or retire. In fact, workers with the shortest employer tenure in a declining industry generally are the first to be laid off during a reduction of work force, while the workers who are retained are likely to be the ones with the greatest seniority. Consequently, the average tenure of workers in declining industries tends to be high. By contrast, many new workers are added to the payrolls of industries with increasing employment, such as business services and health services, which tends to keep average tenure low.
Two specific industries illustrate the effect employment growth has on tenure: computer and data processing, and blast furnaces and basic steel products. The median employer tenure was 2.9 years for workers in computer and data processing services, compared with 12.5 years for workers in blast furnaces and basic steel products. During the 1975-90 period, the intense demand for specialized programming and software was behind the 12-percent annual employment growth in the computer services industry, making it one of the fastest growing industries in the U.S. economy. In contrast, during the same period, employment in the steel industry declined 4.5 percent annually, as foreign competition forced firms to increase productivity by investing in laborsaving technology and closing inefficient plants.
Workers in occupations that have experienced rapid employment growth or declines also have tenure reflecting these trends. In fact, workers with the greatest average tenure generally are in occupations that have experienced declining employment, but are appealing enough to encourage continued worker attachment--examples are farmers, locomotive operators, and barbers. At the same time, other occupations with strong worker attachment have about average or below average tenure because they are relatively new and are growing fast--computer systems analysts and paralegals, for example.
Education and training. Tenure increases as the level of educational attainment increases. The more time and resources a worker has invested in education for a specific occupation, the less likely he or she is to switch to another field, because the change could mean a loss of earnings and other benefits. Workers who have made very large investments in education, such as physicians and lawyers, usually remain in their occupations until retirement, although they may change employers. Occupational attachment also tends to be strong in skilled crafts that require several years of on-the-job or apprenticeship training, such as plumbers and machinists.
Workers with 4 years of college or more had much longer occupational and employer tenure than those with less than a high school education. For example, median occupational tenure for college graduates was 7.9 years, compared with 5.2 years for workers with less than a high school education. Workers with 1 to 3 years of college, however, had slightly less occupational and employer tenure than those with just a high school diploma, probably because many of the former were still attending college and had part-time jobs for a short time.
Compensation and benefits. In general, the greater the compensation, the longer the employer or occupational tenure. Pay increases encourage a worker to remain with an employer. However, higher wages are not always the reason for long tenure--a low-paid worker who lacks education and skills may stay with an employer for job security and fringe benefits. Nevertheless, among workers with comparable levels of education and skill, those with the greatest tenure usually have the highest wages.
Part-time workers exemplify the effect earnings have on employer tenure. Some part-time jobs require minimal training and skills, have low pay, and provide little opportunity for advancement. Examples of occupations with large numbers of part-timers are food counter workers, cashiers, and stock handlers and baggers. Because workers in these occupations frequently are students and others who might want only short-term employment and are not difficult to replace when they resign, their employers have little incentive to offer higher pay and other benefits to retain them. As a group, part-time workers had median employer tenure of 2.4 years, less than one-half the average for full-time workers.
Sex, race, and ethnicity. Men had longer occupational and employer tenure than had women. Both men and women had about the same tenure at young ages, but the difference increased with age. At ages 25-34, for example, median employer tenure was between 3 years and 4 years for both sexes; however, at ages 55-64, tenure was 15.5 years for men, compared with 10.4 years for women. Men have been in their jobs longer than have women on average, because many women currently in the labor force had interrupted their careers for extended periods for home and family responsibilities.
Median employer tenure was 3.2 years both for men and women of Hispanic origin; 4.4 years for black men and 4.3 years for black women; and 5.3 years for white men and 3.8 years for white women. The pattern was similar for occupational tenure.
Many Hispanics are recent immigrants, whose potential for tenure with American employers obviously is lower than that of lifetime residents. Other reasons for the short tenure of Hispanic workers are the comparatively young age of their cohort and their disproportionately large representation in low-paying service occupations. While employer tenure was the same for Hispanic men and women, the men had higher median occupational tenure than the women. Although the reason for this difference is not clear, it may result from immigrants counting occupational tenure in the country of origin, where women may have been less likely to have worked outside the home.
Although white men had been with their employers longer than black men at every age, the differences were not great
for example, among men aged 55-64, median tenure was 15.1 years for blacks and 15.6 years for whites. In contrast, among women in the same age group, the median was 13.9 years for blacks and 10.2 years for whites. Historically, continuous employment has been more the pattern for black women than for white women.
Self-employed workers. Self-employed persons had been in their jobs much longer than other workers. Median occupational tenure for self-employed workers was 8.0 years; almost twice as long as for wage and salary workers. Median tenure was very high in occupations in which more than two-thirds of workers were self-employed, such as dentists (15.1 years) and barbers (27.2 years). Contributing to the longer occupational tenure of self-employed workers is the age factor. Before becoming self-employed, a person may have spent years in their occupation working for another employer. After the initial stage of "learning the business," self-employed workers are somewhat older than the typical labor force participant.  In addition, self-employed workers have greater flexibility in adjusting their work schedules to suit their needs, and thus, are more likely than others to work beyond age 65.
Comparing median occupational and employer tenure provides useful insights into the behavior of workers in differing industries and occupations. Worker mobility can be inferred through analysis of detailed occupations and industries by median occupational and employer tenure. For example, when median employer tenure exceeds median occupational tenure, the typical worker may have changed occupations, rather than employers. This may indicate that the worker has advanced to a better occupation, moved up the career ladder, or simply changed jobs within the same organization. Conversely, if median occupational tenure exceeds median employer tenure, more common than the former, the worker may have worked for more than one employer without changing occupations.
Representative of the two phenomena are firelighting and fire prevention supervisors, who had median employer tenure of 20.3 years and median occupational tenure of 15.0 years, and registered nurses, who had median employer tenure of 5.2 years and median occupational tenure of 10.6 years. Firelighting and fire prevention supervisors are restricted or limited as to type of employer-almost all of them work for municipal fire departments. Career advancement in fire departments usually occurs from within the organization, so firefighters who become supervisors usually already have many years of tenure with their employer before being promoted, and continue to accumulate tenure until retirement because mobility between different fire departments is limited. By contrast, registered nurses tend to find new employers more frequently. Moreover, recent demand for nurses in the labor market has forced hospitals and other organizations to compete for their share of these workers by increasing salaries and benefits, thus contributing to movement between employers. Table 2 presents median employer tenure and median occupational tenure for detailed occupations that had 50,000 or more workers in January 1991.
Just as the comparison between employer and occupational tenure can be interpreted for occupations, characteristics of some industries can be inferred. Industries in which workers have more employer tenure than occupational tenure usually are characterized by large firms and large plants, which may mean a greater variety of potential occupations for employees. Employer tenure was longer than occupational tenure in several manufacturing industries, including motor vehicles and equipment, photographic equipment and supplies, pulp and paper, and aluminum. Employer tenure also was longer in telephone communications, railroads, electric light and power, and the postal service. In contrast, employer tenure was comparatively low in the construction industry because fluctuations in building activity result in workers, such as carpenters and bricklayers, frequently changing employers. Table 3 presents median employer tenure and median occupational tenure for detailed industries that had 100,000 or more workers in January 1991.
MEDIAN EMPLOYER AND OCCUPATIONAL TENURE is expected to lengthen gradually as a result of an aging work force and a slower increase in the labor force participation of women.  The median age of all workers, which rose only from 35.8 years to 36.6 years between 1975 and 1990, is projected to rise to 40.6 years in 2005, which means that workers will have had the opportunity to be in their jobs longer.
Over the past 15 years, the data show that women had a rapid increase in labor force participation; this movement into the labor market contributed to lower average tenure because many of those entering jobs had no previous experience in their occupation and had interruptions in their worklife (to attend to family responsibilities, for example). However, the labor force participation rate for women, which increased from 46.3 percent in 1975 to 57.5 percent in 1990, is projected to rise slower over the next 15 years to 63 percent in 2005, thus the average tenure for women will be less affected by the addition of new workers.
1. See George Silvestri, "Who Are the Self-employed? Employment Profiles and Recent Trends," Occupational Outlook Quarterly, Spring 1991, pp. 26-36.
2. For projections of the labor force by sex, see Howard N Fullerton, Jr., "Labor force projections: the baby-boom moves on," Monthly Labor Review, November 1991, pp. 31--45.
Steven R. Maguire is an economist, formerly in the Office of Employment Projections, Bureau of Labor Statistics.
[Tabular Data Omitted]
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|Author:||Maguire, Steven R.|
|Publication:||Monthly Labor Review|
|Date:||Jun 1, 1993|
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