Employee Tenure Technical Note

Technical Note
   
   The data in this release were collected through a supplement to the January 2012
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 2012 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.

   Revised population controls are introduced periodically in the CPS, which can
affect the comparability of labor force levels over time. Beginning in 2012, data
reflect the introduction of Census 2010 population controls and are not strictly
comparable with data for prior years. Additional information about population
control adjustments is available 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 exact difference, or sampling error, varies depending on the particular sample
selected, and this 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 January 2012 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 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 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, 2012