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Benefits March 30, 2005
Public Employees Have Double the Tenure of Private Counterparts
March 30, 2005 (PLANSPONSOR.com) - Public-sector
employees have almost double the average tenure at their jobs
than their private counterparts, which could have
implications as older workers start to retire en masse,
according a report from the Employee Benefit Research
Institute (EBRI).
Reported by Kip McDaniel
The average tenure for a public-sector worker is seven years, compared to 3.6 years for those in the private sector, according to the report. Overall, the average rate of tenure for all jobs has not changed in the past twenty years, with the average duration at 4.9 years now, as compared to five years in 1984.
There were significant difference in tenure lengths between sexes and ages, EBRI found. The median tenure for men between 55 and 64 declined from 15 years in 1983 to 10 years in 2004, which was the largest change of any age group. Women of this age saw no change in their median tenure length (9.3 years) over the same time span.
Employees with a very long tenure (over 25 years) have become less and less common across many age groups, the study found. In 1983, 23.3% of wage and salary workers ages 60 – 64 had tenure of 25 or more years, compared with 17.5% in 2004. For those ages 55 – 59, a similar decline occurred, from 22.7% in 1983 to 17.9% in 2004. The decline in the percentage of workers ages 45-54 with 25 or more years was much less dramatic but still significant, falling from 12.9% in 1983 to 11.6% in 2004.
The changes in men and women’s tenure length went opposite ways over the 20 years before 2004. Where men saw their tenure length fall from an average of 5.9 years to 5.1 years, women saw the average tenure increase from 4.2 to 4.7 years.
The statistics prove that the idea of a “career worker” – one who stays at the same job for an entire working life – is largely a myth, according to EBRI. “These tenure results indicate that, historically, most workers haverepeatedly changed jobs during their working careers,” said DallasSalisbury, EBRI president, in a statement. “All evidence suggests that workers willcontinue to do so in the future.”
One major consequence of job-jumping by the average employee, according to EBRI, is the lack of defined benefit pension accrual opportunities. Since many DB plans are based on years of service and final salary, employees who change jobs frequently will be unlikely to accrue a significant amount of retirement income through such plans.
The study is available here .