What is employee tenure, and how is it rewarded in the Philippines?
Employees who remain devoted to a single company for years are known as tenured employees, receiving recognition and respect. These people often hold esteem due to experience, expertise, system knowledge, cultural understanding, and dedication.
Given these, job tenure can be equated to job satisfaction, job security, employee loyalty, and long-term objectives. Long tenure also means a higher guarantee in terms of job security.
In this article, we will cover the basic definitions and categories of employee tenure. Furthermore, we will also cover learning and development opportunities based on employee satisfaction, employee retention, and employee engagement.
What does being a tenured employee mean?
Derived from the Latin word tenere, tenure literally means “to hold.”
In employment, tenure refers to the period or length of time an employee holds his position in a company or organization over the years. Long-tenured employees are those who have been employed by a company for five (5) years or longer.
Employment lasting less than five (5) years is referred to as short-tenure employment. Job tenure also means that an employee has passed the probationary stage and is regarded as permanent.
What is a tenure salary?
Tenure pay, or tenure salary, refers to the monetary compensation plan your company has prepared for your tenured workers. Actual money value may differ based on employee tenure, job type or position, and skill set, among others.
A long-tenured employee with a proven track record can receive an offer of an increased salary bracket compared to his salary for the last five years. In addition, a tenured salary plan is one way to reduce employee attrition and enhance retention.
It also offers a virtual guarantee of lifetime employment to a tenured employee who has shown dedication, commitment, and loyalty by staying in a company for five (5) years or longer. Tenure pay is also a factor in creating a lifelong relationship between an employee and his current employer.
Benefits of tenured employees
An employee who has worked for the same employer longer has a stronger set of skills, a wider knowledge base, and a work ethic. These and other practices can be shared with new employees.
Moreover, a tenured employee also exhibits commitment, thereby demonstrating that the work environment is secure and stable.
Here are other common benefits that long-term employees can benefit from:
Better expertise and more knowledge about the company
Employees who have stayed with the same employer for a certain number of years have developed a set of skills specific to the job or position they have held.
Tenured employees also have more extensive knowledge of company processes, workflows, and how things are generally done. These people have held the same position or been employed by the same company at length. As such, they have a better understanding of company culture and policies, as well as increased productivity due to fewer errors.
Opportunities to become trainers, mentors, or support leads
Long-tenured employees can be great assets to a company. They can use their knowledge to help train or mentor short-tenured employees, younger employees, and new hires. With their accumulated knowledge and experience of how the company runs things, they can offer guidance and support to other employees.
Employment security and stability
A long job tenure means that employees are guaranteed a measure of job security.
In this regard, tenured employees exhibit a degree of commitment and loyalty to the company, reducing the need to hire and train new employees.
Tenured employees tend to feel more anchored and satisfied in their careers, which can result in better motivation, increased productivity, and a stronger sense of loyalty to the company and its ideals.
Assets to attract and retain talent
Companies with a large pool of tenured employees can help attract talent while encouraging retention.
A high percentage of employee turnover can give the impression that the company is unstable and incapable of providing career advancement.
On the other hand, if employees stay with a company for a long time, it paints a picture of security and a healthy work environment and can easily attract more potential new hires while greatly lowering the chances of employee turnover.
Why should employers value long-tenured employees?
Inversely, the company also gains an advantage from retaining employees with long tenure.
Here are some of the benefits a company can get from older employees with long tenure:
Cost-effectivity
Hiring and training new additions to your manpower can be very expensive; hence, companies cannot afford to have a high percentage of employee turnover.
Whenever an employee leaves, the company will need to find a replacement. This means allocating funds for advertising, conducting interviews, and training newly hired team members, which all equate to more expenses and additional time spent preparing the new employee for the role he needs to fill.
Productivity is also affected, as the new hire needs time to acclimate and familiarize himself with the processes and systems needed to get the job done.
Employee retention means more stability for both the employee and the company, more revenue, and fewer expenditures.
Improved Customer Relationships and Interactions
Long-tenure employees who have been with the same employer for a certain length of time develop a certain degree of understanding of the products and services offered by their company.
This means that they have a better grasp of their customers’ needs and can provide better service and options and make intelligent suggestions based on their interactions with said customers.
In return, customers are made to feel more confident about your company and what you can offer them.
Customers also feel more at ease working with employees they know.
In this regard, tenured employees get to know your customers and clients on a deeper level, making them great assets in earning customer loyalty.
Devotion to company progress and success
Employees who remain loyal to a company for a lengthy period are more invested in and devoted to the company’s progress and success.
Loyal employees with tenure are also most likely to take ownership of their roles and jobs while providing optimal service to customers and clients without the need for prompting.
Long-term employees who feel proud of their work and achievements are sure to stay and grow with your company.
Higher productivity output
A tenured employee knows his way around his role and the scope of his position in the company better than a newly hired one.
In this sense, tenured workers are considered more productive simply because of their experience, wider knowledge, and better understanding of your company’s goals, values, mission and vision, culture, as well as systems and processes.
Stronger employee morale and camaraderie
Companies and organizations with a high employment retention rate have stronger employee morale and relationships.
As with any type of relationship, time is a key factor in making it stronger and more stable. The same goes for workplace interaction and camaraderie.
Employees who have worked together for a long time tend to grow strong bonds, which they share both at work and during after-shift socializations.
Having a strong and stable company culture can attract more employees and potential assets who want to stay and contribute to the company’s success.
Recognition and reward programs for long-tenured employees
To honor and retain long-tenured employees, companies in the Philippines implement various recognition and reward programs:
- Service Awards. Employees receive awards for reaching specific milestones, such as 5, 10, 15, and 20 years of service. These awards often include certificates, plaques, and monetary bonuses.
- Additional Leave. Companies offer additional vacation days or sabbaticals to long-tenured employees, recognizing their dedication and allowing them time to recharge.
- Salary Increases and Bonuses. Long-tenured employees often receive periodic salary increases and performance bonuses, reflecting their ongoing contributions to the company.
- Professional Development Opportunities. Employers invest in the professional growth of tenured employees by offering training programs, workshops, and sponsorships for advanced degrees or certifications.
- Recognition Events. Annual events or special ceremonies are held to publicly acknowledge and celebrate the contributions of long-tenured employees.
- Exclusive Benefits. Long-tenured employees may receive exclusive benefits such as enhanced health insurance, retirement plans, or access to company facilities and resources.
What is the average tenure of employment?
For employers, tenure is a determining factor when hiring new employees. However, several factors actually affect average tenure, such as the employee’s age and job industry.
Younger people tend to switch jobs more frequently than older workers. Moreover, these older workers have developed more focus on their career paths. In addition, workers in the service industries are expected to have shorter tenure. This is relative to those who are employed in law, engineering, architecture, and education fields.
Average employee tenure by industry and age group
Understanding employee tenure across different industries and age groups provides insights into workforce dynamics. According to the Philippine Statistics Authority, average employee tenure varies significantly:
- Agriculture and forestry: The average tenure is approximately 6 years, and many employees stay long-term due to farming’s generational nature.
- Manufacturing: The average tenure is about 4 years, with higher turnover due to the physical demands and opportunities for skilled workers to find higher-paying jobs.
- Retail and Trade: The average tenure is around 2.5 years, attributed to the large number of part-time and entry-level positions.
- Education and Health Services: The average tenure is approximately 7 years, with stability and benefits contributing to longer employee retention.
- Information Technology (IT) and Business Process Outsourcing (BPO): The average tenure is around 3 years in these rapidly growing industries.
Related: Casual employment in the Philippines
What are the laws on employment tenure in the Philippines?
The Right to Security of Tenure is stipulated in the 1987 Philippine Constitution. This right ensures that a worker cannot be dismissed from the workplace without due process of law. This right covers all employees in the Philippines, whether local or foreign.
Employment is a primary means of livelihood for the majority of Filipinos. As such, the right to security of tenure is important when conducting a disciplinary action plan against an employee. This is particularly true if the potential outcome is dismissal or termination.
Section 9 of Article 2 of the 1973 Philippine Constitution mandates the security of tenure for all employees and laborers. This is regardless of whether they are employed by the government or in the private sector.
In line with this, the 1987 Constitution ensures that the right to security of tenure tilts favorably towards the employees. Furthermore, it should hold, especially if the worker is underprivileged compared to the employer.
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