Employee Tenure Technical Note

Technical Note

The data in this release were collected through a supplement to the
January 2010 Current Population Survey (CPS). The CPS, which is con-
ducted by the U.S. Census Bureau for the Bureau of Labor Statistics
(BLS), is a monthly survey of about 60,000 households that provides
information on the labor force status, demographics, and other char-
acteristics of the nation's civilian noninstitutional population age 
16 and over.

The January 2010 CPS supplement obtained information on worker dis-
placement and workers' tenure with their current employer. The data 
on worker displacement are available online at www.bls.gov/cps/
lfcharacteristics.htm#displaced.

Revised population controls are introduced periodically in the CPS,
which can affect the comparability of labor force levels. Data for
1996 and 1998 are based on population controls from the 1990 census.
Data beginning in 2000 reflect the introduction of Census 2000 popu-
lation controls and are not strictly comparable with data for prior 
years. Beginning in 2004, population controls are updated annually. 
Additional information about population control adjustments is avail-
able on the Internet 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 nonsam-
pling 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 exact difference, or 
sampling error, varies depending on the particular sample selected, 
and this variability is measured by the standard error of the esti-
mate. 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 stan-
dard errors from the "true" population value because of sampling error. 
BLS analyses  are generally conducted at the 90-percent level of confi-
dence. The CPS data also are affected by nonsampling error. Nonsam-
pling 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 pro-
cessing of the data.

A full discussion of the reliability of data from the CPS and informa-
tion 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 January 2010 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 infor-
mation on workers who had been with their current employer for a rela-
tively 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 his-
torical 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 because 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 because more job opportunities are available for new en-
trants to the workforce and experienced workers have more opportuni-
ties 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.