Average Tenure

What average tenure means

Average tenure (متوسط مدة الخدمة), also called average employee tenure, is a management indicator that measures the arithmetic mean of the periods a group of employees has spent in an organisation up to the date of measurement.

The indicator is calculated on a group and reported in a management report. The phrase “length of service” also appears in an individual sense, attached to one named employee, and in that sense it carries legal consequences that have their own provisions. None of those consequences is drawn from the definition of average tenure. As a mean for a group, average tenure does not describe the position of a single employee, and nothing that follows from that position is derived from it.

Two calculations of average tenure under one name

The same label covers two different divisions, and they answer two different questions:

• Over the employees currently in post. It is the sum of their periods of service up to the date of measurement, divided by their number. It answers the question: how settled are the people we have now?
• Over the people who left during a period. It is the sum of the periods they had spent in the organisation before leaving, divided by their number. It answers a different question: at what point in their service do people leave?

The two figures can move in opposite directions in the same period.

For that reason the calculation is stated before the figure is shown. A table that combines both divisions under a single heading produces a number to which no question corresponds.

Average tenure hides the distribution

Take a department of ten employees. Six of them joined six months ago, and four have been there for eight years.

• Average tenure: (6 × 0.5 + 4 × 8) ÷ 10 = 3.5 years
• Number of employees whose service is close to that figure: none

The six newcomers contribute 3 years between them and the four with eight years of service contribute 32, which is how the total of 35 years and the mean of 3.5 arise. Yet the nearest anyone comes to 3.5 years is half a year or eight years.

The department is in fact two groups: an established core and a new layer. The average case does not exist in it. An indicator that describes a position nobody is in gives no basis for a decision.

The remedy is straightforward. The distribution is shown in tenure bands beside the average, not in place of it:

• less than one year
• one year to less than three
• three years to less than five
• five years or more

What moves average tenure without any change in retention

The point open to misreading here is that growth lowers average tenure through the arithmetic alone. An organisation that doubles its headcount in a year sees its average tenure fall even if nobody leaves, because every new joiner enters the division with a period close to zero. A high employee growth rate therefore pushes the figure down for a reason that has nothing to do with whether people are staying.

Reading such a fall as a retention problem is an error of direction, not of precision.

The opposite happens during a hiring freeze (تجميد التوظيف), a temporary decision that stops new vacancies being opened and new appointments being made while existing staff remain in their work. Average tenure rises during a freeze without any improvement in the working environment, because the side that had been pulling it down has stopped on its own. Everyone in post gains a year of service each year, and no newcomer arrives to offset it.

So average tenure is examined alongside the number of joiners and leavers in the same period, never on its own.

What average tenure is examined alongside

• Retention strategy. A retention strategy (استراتيجية الاستبقاء) examines the rate of leaving by segment rather than in aggregate, and it sets a selective aim: that the people who are hard to replace stay. The same logic applies to average tenure. A single average for the whole organisation does not say who left.
• The exit interview. It draws a pattern from the people who leave, not a set of individual cases. It says why they left, while average tenure says when.
• The first tenure band. The band of less than one year points to a different place from the other bands. Within it, departures concentrated in the first six months can point to onboarding and expectations rather than pay, which places the response in employee onboarding. Those six months are part of the band, not the whole of it, so that explanation does not extend to departures from the seventh month to the end of the first year.

The conditions that come before any average tenure figure

The first condition is clean dates. A missing joining date or an unrecorded leaving date corrupts the whole division, and nothing in the result shows that it has happened. The figure still comes out as a plausible number of years. Missing dates are a defect that invalidates the result before any analysis begins, and in HR analytics (تحليلات الموارد البشرية) the same indicator can appear as average length of stay, under which name the same defect breaks it in the same way.

The second condition is the definition of the group. Are trainees included? Are employees on temporary contracts included? Two departments that answer these questions differently produce two figures that cannot be compared, even when both are labelled average tenure and both are calculated correctly.

When a rise in average tenure is a negative signal

Across an organisation, a rising average tenure is a result to want. At one particular job level, however, a rising average combined with no movement out of that level may be a sign of a career plateau (الركود الوظيفي) rather than a sign of stability.

The difference between the two cases does not show in the figure. Both can produce the same rising line. It shows in whether internal moves out of that level exist or are absent over the same period.

This is an explanation of the concept, not legal advice.