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KPI of the Day – Human Resources (HRM): # Employee tenure

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employee tenure

Definition

Measures the number of years that the employees have been with their current employer, calculated at the organizational level.

Purpose

To monitor the length of service of employees, as an indicator of workforce profile.

Recommendations

It is possible to report individual employee tenure not only as a total number of months or years spent with the company, but also broken out in the time duration spent per job position. This granularity helps managers to assess employee eligibility for promotions, position rotation as well as other tenure-related benefits, such as plan achievement, leaves of absence, etc.

Monitoring average employee tenure by job may be useful in indicating unexpectedly low tenure in a particular department. If it is not managed, high turnover can lead to poor employee morale and poor employee performance. It does not always reflect employee satisfaction with the working environment, as some employees could stay with the company for other reasons, such as not being able to find a better job or just wanting to add the current position to their CV.

While high employee tenure indicates retained knowledge, it may also impact the level of new ideas and energy associated with new employees. Employee tenure varies across industries, is affected by labor market conditions and by organizational maturity. Benchmarking is not recommended for this specific reason.

Employee retention rates can also be reflected in the # Employee tenure, which is the number of years that the employees have been with their current employer, calculated at the organizational level.

However important long tenure may be to the retention strategy of the organization, it is not advisable to disregard the implications of a too-long tenure:

  • Resistance to changes in the organizational culture;
  • Little enthusiasm for further innovation;
  • Reduced versatility in a fast-changing environment;
  • Little tolerance to new, fast-paced generations.

If you are interested in more Human Resources-related KPIs, smartKPIs.com subscriptions provide access to +500 KPI examples. Our dedicated Library contains relevant resources to improve your KPI practices, and if you want to further improve your knowledge, feel free to explore our latest publication – The Human Resources KPI Dictionary.

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