Employee tenure is one of the main indicators of workforce stability. It shows how long employees stay, how committed they are, and how well an organization retains its talent. Yet tenure data can only provide limited insight by itself - time to enter industry benchmarks!
Benchmarking your employee tenure? Search benchmarks
For example, a high average tenure could mean strong engagement, but it could also point to a stale workforce that’s out of ideas and initiative. But which is it? Well, that is where benchmarking employee tenure against relevant peers is critical for turning data into useful insight.
Employee tenure measures how long someone has been employed by their current organization. In its simplest form, it can be calculated as the average or median number of years that employees remain with the company.
Most organizations use a few different types of tenure statistics to understand their workforce, such as:
Looking at tenure in a few ways like this is much more informative for leaders, who will understand not just how long people stay but also what is driving it.
Benchmarking employee tenure means comparing your organization’s tenure data against a specific peer group. This could include companies in the same industry, of similar size, within the same geographic region, or a combination of all three factors.
Tenure benchmarks give you context to internal data. For example, an average tenure of 3.5 years might look low until you realize that your peers in the software industry average 2.8 years. Benchmarking transforms average employee tenure from one number into a powerful and relative indicator of your workforce health.
Benchmarking employee tenure is a structured process. Here is an approach that you can follow:
Start by clarifying why you are benchmarking tenure. Are you trying to understand retention issues, plan workforce changes, or evaluate cultural health? Defining the goal will guide every decision that follows, from which peers to include to how you interpret the data.
A benchmark is only as useful as the comparison it’s based on. Choose peers that reflect your organization’s reality, such as:
Pull data from your HRIS or people analytics platform, making sure it is clean and current. Capture tenure for every active employee and calculate:
Use reliable benchmarking sources to gather peer data. This can come from market data providers, industry reports, or specialized benchmarking partners. Make sure the definitions match your internal data. CompanySights is a source of reliable employee tenure benchmarking data.
Place your internal figures next to the benchmark average and median for each category. Look for patterns rather than single data points. For example:
Numbers don’t tell the full story alone. Combine tenure data with other metrics such as attrition, engagement, or promotion rates to see what’s really driving the differences. A short average tenure might be acceptable in a fast-growing tech company, but problematic in a safety-critical manufacturing environment. Spend time understanding the context.
Use your findings to shape workforce strategies. If tenure is short, focus on improving onboarding or career development. If it’s long but stale, explore ways to refresh skills and mobility. Tie every action to measurable business outcomes.
Tenure patterns often change as the business evolves. Repeat your benchmark analysis annually or after major organizational shifts to track progress and maintain alignment with your peers.
Looking for external tenure benchmark data? Search here
Tenure is shaped by both organizational and external factors. Understanding what drives it will help to explain why benchmarks vary widely. These include:
Fast-moving industries such as technology or marketing tend to have shorter tenures because competition for talent is intense and skills evolve quickly. Manufacturing and utilities often show longer tenures due to stability and specialized skill sets.
Startups may experience high turnover as they evolve rapidly. Larger, established companies often retain employees longer due to structured career paths and benefits.
Entry-level and customer-facing roles typically have shorter tenure, while senior leadership and technical specialists stay longer due to investment in their expertise.
A strong culture, good management, and clear career progression can extend tenure significantly. Weak leadership or poor communication has the opposite effect.
During economic uncertainty, employees may stay longer due to risk aversion. In booming job markets, tenure can shorten as opportunities increase.
Employee tenure is the key signal for your workforce health. It affects productivity, engagement, and even profitability. Here are a few examples of why it matters:
The key is balance. A healthy organization combines experienced employees who provide continuity with new hires who bring fresh ideas to the business.
Tenure norms differ widely by sector, reflecting market conditions and organizational models. Here are the average employee tenures for seven key industries per the US Bureau of Labor Statistics:
The data is interesting as it shows the public sector reporting longer tenure at 6.2 years compared to industries dominated by the private sector (e.g. leisure and hospitality at 2.1 years).
These variations show that benchmarking must always be contextual. For example, comparing a software company to a government agency will tell you very little about performance. In fact, I would throw this kind of comparison out the window!
Benchmarking employee tenure turns simple data into insight. It helps you assess whether your retention patterns are healthy, and where you might need to act. Start by defining your peer set. Then segment tenure data by function or level. Look for patterns rather than single numbers. High turnover in one team might indicate management issues, while unusually long tenure in another could suggest low mobility. What are you waiting for?
Explore trusted employee tenure benchmarks today
Subtract the current date or employee termination date (if earlier) by the employee start date. This should give you the number of days that the employee was employed, which you need to divide by 365.25 (remember the leap year)! If calculating the workforce average, prepare this calculation for all employees in your organization.
While there is no universal “good” number, anything between three and five years is typically considered to be normal.
Industries like technology, retail, and hospitality often see short tenure due to higher levels of competition and seasonal roles. Meanwhile, manufacturing, energy, and the public sector tend to have longer tenures. Within a company, back-office or technical roles usually show greater stability than front-line or sales positions.
Not necessarily. Short tenure can reflect growth, agility, and a strong talent pipeline. Concern arises when turnover is unplanned or concentrated in key roles. What matters most is understanding the cause and impact of short tenure, not the number itself.
Tenure data reveals when and where employees are most likely to leave. By identifying tenure “cliffs” such as the two-year mark, you can strengthen engagement or career development programs at critical moments.
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