Description
Distribution of headcount by organisational tenure at the end of the reporting period.
Formula
End of period headcount [Tenure] / End of period headcount * 100
Interpretation
Organisation Tenure Staffing Breakdown indicates the percentages of the workforce falling within various tenure groupings. Graphically, the data are presented as a percentage of the total workforce, i.e. a stacked bar graph.
High levels of tenure tend to mean that many employees have a significant experience and significant knowledge of organisational processes and history. Such employees are likely to be considered highly valuable and can help sustain organisational culture. However, very high tenure among the workforce can also lead to stagnation of culture and innovation.
Low levels of tenure may be driven by high turnover levels (i.e. new employees have been hired to fill vacancies) or fast growth (i.e. new additions to the workforce bring down the overall average).
Low tenure may or may not carry with it low levels of work experience, but low tenure will carry with it limited organisational context and limited knowledge of processes and history.
Employers are likely to monitor tenure levels to track the impact of turnover and growth or contraction strategies on organisational knowledge and culture. Tenure levels are also likely to inform workforce strategies.
For example, development needs of a low-tenured workforce may centre on onboarding and process knowledge, while those of a high tenured workforce are more likely to revolve around career development, leadership development or continuing technical education.
Other metrics are available to measure the tenure of the workforce, including Average Workforce Tenure and Staffing Rate – < 1 Year. Organisation Tenure Staffing Breakdown, while more complex than the others, provides the most detailed view of tenure across the organisation by indicating the relative percentage of all tenure groups in the workforce.
Data Sourcing
Tenure may be calculated using a hire date, though most organisations calculate tenure using an adjusted hire date that may include tenure from previous periods of employment with the organisation.
Analysis
Employers commonly analyse tenure within key skill areas, occupations, job functions and managerial groups to understand the experience levels within the jobs that are likely to have the greatest impact on organisational performance.
For diversity monitoring, organisations may also wish to analyse tenure by gender and ethnic background.
Limitations
Organisation Tenure Staffing Breakdown does not indicate the tenure profile of those leaving the organisation; it indicates only the resulting tenure composition of the workforce.
While tenure is a measure of experience within the organisation, it is not a direct indicator of general work experience, skill levels or functional knowledge. This measure also indicates only tenure with the organisation, not the tenure of employees within their current positions, tenure as managers, etc.
Targets
As this measure is a breakdown measure, organisations would need to set targets for the individual components of the breakdown.
Employers are most likely to set targets for a percentage of very low-tenured employees (e.g. less than one year of tenure) or for larger groups of tenure bands (e.g. more than three years of tenure, more than five years of tenure).
Targets for these percentages, whether relative or absolute, typically aim to strike a balance between retention of knowledge and skills and injection of new ideas from external sources.