Median Employee Tenure

Median Employee Tenure - HR Metric - calculation

What (Definition)

Median Tenure measures the Median of tenures of all employees in the company. A tenure is defined as the duration of employment (from start date to today) of an employee.

Why (Benefits)

There are multiple ways to represent tenure and Median is chosen above Average in some cases.

Median is used in Real Estate industry to calculate home prices. Instead of Average home price, they use Median home price as a better indicator of home prices. For more explanation, please see this article https://www.thebalancemoney.com/median-vs-average-what-the-difference-2682237

Let me also clarify why measuring tenure is important.

Measuring and monitoring the tenure will allow a company to understand their workforce profile mix.

A company would want to retain high performing employees as long as possible. More long-tenured employees in a company would be beneficial to the company. They bring their experience and knowledge of the company policies and processes and are likely to perform tasks more effectively and efficiently.

A growing company will have new employees joining the company. Also, new employees will bring fresh perspectives and solutions. Infusion of new employees will reduce the average tenure. Each company needs to achieve the right balance between long-tenured experienced employees and new employees with fresh ideas. This balance will vary from one industry to another.

How (Calculation?)

Formula

Tenure in Days = (Current Date – Employee Start Date + 1)

Median Tenure = Median of Tenures calculated for each employee

We have to calculate the tenure first for each employee and then calculate median of those tenures.

Median Tenure Calculation with an Example

Tenure and Median Tenure are typically displayed as years (example: 3.5 years) or months (example: 42 months).

Tenure can vary by department, business units or by type of job. Hence calculating and monitoring tenure should be done in each department.

Median vs Average

In the example, if we calculated average tenure, it would have been 7.3 years.

Comparing Median vs Average Employee Tenure calculation

Use Frequency distributions data to take decisions

This is where we create bins or buckets or categories of tenure, and count frequency of occurrence of each bin. In our example, we can create bins based on years of tenure. Let’s take a look at this chart.

Employee Tenure Distribution

We are now displaying the number of employees in each bin. For example, there are 5 employees with tenures between 4 and 6 years. This type of visualization helps understand the concentration of employees in tenure buckets. It also will show any outliers more clearly.

---

Related HR metrics

---

Now, it’s your turn.

Do you measure median tenure in your company? Please share your thoughts below. I look forward to learning from you.

---

---