Employee Tenure Technical Note

Technical Note

The data in this release were collected through a supplement to the January 2014
Current Population Survey (CPS). The CPS, which is conducted by the U.S. Census
Bureau for the Bureau of Labor Statistics (BLS), is a monthly survey of about
60,000 eligible households that provides information on the labor force status,
demographics, and other characteristics of the nation's civilian noninstitutional
population age 16 and over.

The January 2014 CPS supplement obtained information on worker displacement and
workers' tenure with their current employer. The data on worker displacement are
online at www.bls.gov/cps/lfcharacteristics.htm#displaced.

Updated population controls for the CPS are introduced annually with the release
of the January data. Additional information about population controls is available
on the BLS website at www.bls.gov/cps/documentation.htm#pop.

Information in this release will be made available to sensory-impaired individuals
upon request. Voice phone: (202) 691-5200, Federal Relay Service: (800) 877-8339.

Reliability of the estimates

Statistics based on the CPS are subject to both sampling and nonsampling error.
When a sample, rather than the entire population, is surveyed, there is a chance
that the sample estimates may differ from the true population values they represent.
The component of this difference that occurs because sample differ by chance is
known as sampling error, and its variability is measured by the standard error of
the estimate. There is about a 90-percent chance, or level of confidence, that an
estimate based on a sample will differ by no more than 1.6 standard errors from the
true population value because of sampling error. BLS analyses are generally conducted
at the 90-percent level of confidence.

The CPS data also are affected by nonsampling error. Nonsampling error can occur for
many reasons, including the failure to sample a segment of the population, inability
to obtain information for all respondents in the sample, inability or unwillingness
of respondents to provide correct information, and errors made in the collection or
processing of the data.

A full discussion of the reliability of data from the CPS and information on estimating
standard errors is available at www.bls.gov/cps/documentation.htm#reliability.

Tenure concepts and questions

Employee tenure is a measure of how long wage and salary workers had been with their
current employer at the time of the survey. Many of the estimates shown in this report
are medians; the median is the point at which half of all workers had more tenure and
half had less tenure. Data refer to the sole or principal job of full- and part-time
workers.

Wage and salary workers receive wages, salaries, commissions, tips, payment in kind,
or piece rates. The group includes employees in both the private and public sectors
but excludes all self-employed persons, both those with incorporated businesses and
those with unincorporated businesses.

In the CPS supplement, questions on tenure were asked of all employed persons. The
main question was: "How long has ... been working continuously for (fill in name of
present employer)?"

               _____ Days
               _____ Weeks
               _____ Months
               _____ Years

For responses of "1 year" or "2 years," a follow-up question was asked: "Could you
please give the exact number of months?"

The purpose of the follow-up question is to obtain more precise information on
workers who had been with their current employer for a relatively short time. This
follow-up question was included for the first time in the February 1996 CPS supplement
on worker displacement and tenure. CPS supplements that obtained information on tenure
in January of 1983, 1987, and 1991 did not include the follow-up question. In those
surveys, responses of 1 year or more could be coded only as the nearest full year, and
responses of less than a year were coded as the nearest full month.

Prior to January 1983, CPS supplements on tenure asked wage and salary workers, "When
did ... start working at (his/her) present job?"  For wage and salary workers, the
meaning of the term "job" is ambiguous. For example, a worker who had been employed
at a particular company for 10 years and had been promoted to a managerial position
1 year prior to the survey may have been counted as having 10 years or 1 year of
tenure, depending on whether the respondent interpreted the question to mean tenure
with the current employer or tenure in the managerial position. To rectify this
ambiguity, the wording of the question was changed in January 1983 to specify the
length of time a worker had been with his or her current employer. The change
resulted in a break in historical comparability.

Interpreting tenure data

Data on tenure have been used as a gauge of employment security, with some observers
regarding increases in tenure as a sign of improving security and decreasing tenure
as a sign of deteriorating security. However, there are limitations to using the data
in this way. For example, during recessions or other periods of declining job security,
median tenure and the proportion of workers with long tenure could rise if less-senior
workers are more likely to lose their jobs than are workers with longer tenure. During
periods of economic growth, median tenure and the proportion of workers with long tenure
could fall if more job opportunities are available for new entrants to the workforce and
experienced workers have more opportunities to change employers and take better jobs.
Tenure also could rise under improving economic conditions, however, as fewer layoffs
occur and good job matches develop between workers and employers.

A changing age distribution among workers would also affect median tenure. Since older
workers are more likely to have long tenure with their current employer than younger
workers, aging baby boomers in the workforce would provide upward pressure on overall
median tenure.



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Last Modified Date: September 18, 2014