Description
Percentage of employees at the end of the period who have less than one year of tenure.
Formula
End of period headcount . <1-year tenure / End of period headcount * 100
Interpretation
This measure indicates the percentage of the workforce who have less than one year of tenure. High levels of low tenure are often associated with high turnover. An organisation with 20 per cent annual turnover that aims to maintain static headcount is likely to have a Staffing Rate – < 1 Year of around 20 per cent as well.
Another way organisations like to frame this measure is, ‘As I’m walking the halls of my organisation, what percentage of the people that I pass are relatively new?’
While new entrants to the organisation can bring with them fresh perspectives, new skills, and new ideas and practices from other organisations, they typically have little knowledge of organisational history, culture, relationships and processes. Onboarding time is required to bring these new employees to ‘full productivity’.
This measure, therefore, can help indicate turnover problems and inform onboarding and training strategies. Low tenure within some occupations or job families (e.g. call centre operators) may be expected and acceptable, while low tenure within other areas (e.g. engineering, policy officers) may be cause for greater concern to an organisation.
Other metrics are also available to measure the tenure of the workforce, including Average Workforce Tenure and Organisation Tenure Staffing Breakdown. However, Staffing Rate – < 1 Year is best suited among these measures to specifically and simply measure the level of newer employees 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 this measure across key skill areas, occupations, job functions, customer-facing roles and managerial groups to understand which areas key to organisational performance have the greatest levels of low tenure. For diversity monitoring, organisations may also wish to analyse tenure by gender and ethnic background.
Limitations
Staffing Rate – < 1 Year does not indicate the tenure levels of employees who have greater than one year of tenure.
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 indicates only tenure with the organisation, not the tenure of employees within their current positions, tenure as managers, etc.
Targets
Targets set related to specific tenure groups are usually set on an absolute basis, e.g. 20 per cent of the workforce. If set relative to benchmark group, most organisations would aim to move results between the 25’h and 50’h percentiles, viewing low tenure as a negative consequence of employee turnover.
Newer organisations, or those that place a higher value on newer employees and the outside perspectives they off er, might target the 50’h percentile or higher.