Employee Turnover Has Not Changed Much in Last 25 Years

The conventional wisdom holds that employee turnover has grown over recent decades. Whereas employees often sought and got lifetime jobs in the past, this wisdom holds, now they tend to move around much more.

It turns out that this is largely myth. In fact, according to new data from the Employee Benefit Research Institute, turnover has barely budged since 1983. The median tenure for private-sector workers was 3.9 years (in other words, half the workforce had been on the job four years or less). For the oldest male (but not female) workers, tenure is somewhat shorter. For those between 54 and 64, median tenure declined from 15.3 years in 1983 to 9.5 years in 2006. This same result, however, shows that few people ever held lifetime jobs, with even the oldest workers with the longest tenure typically starting their current jobs in their forties.

We do not have comparable detailed data for companies with employee ownership plans, but the data we do have indicate that job tenure rates are significantly longer than industry norms and that the percentage of employees who say they plan to look for new jobs is much lower. Given the now strong evidence of how costly turnover is, this gives these companies a significant financial edge.