Length of service refers to the length of time an employee has worked for a company. This time is often seen as an indication of an employee's experience and continuity. Length of service is crucial in determining entitlements such as vacation entitlement, notice period and occasionally salary.

Why is length of service important?

There are benefits for employees to have a longer length of service as this is often associated with additional benefits such as more vacation days or higher severance pay in the event of termination. Employers can use seniority to increase employee loyalty to the company and encourage teamwork.

How is seniority calculated?

Typically, seniority is calculated based on an employee's actual years or months of service with a company. Depending on the applicable labor laws and company policies, breaks such as parental leave or unpaid leave may also be taken into account. In some countries, such as Germany, length of service can also affect protection against dismissal. 

Tips to improve employee retention

Companies can implement retention programs to encourage employee tenure and offer incentives for long-term employees. These include long-term employment incentives, training opportunities and flexible work schedules. Open communication as well as recognition and appreciation of employee work are also important factors in strengthening employee loyalty.