What Does Seniority With a Company Mean?

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The term seniority is an acknowledgment of a higher level of experience or time on the job compared to others within an organization. Seniority can be a form of respect for the service given to the company. It is often used to designate benefits to certain employees as a type of reward system for longevity and dedication to the company.


People in an organization with seniority may make more money then less experienced workers. This may simply be because the more experienced worker has gone through several pay raises in the course of a career. Additional benefits are not as formal. For example, a person with seniority may be allowed to choose the shift he wants to work while others are assigned a specific shift. If only a certain number of people can be given holiday time off, the person with seniority may be given first choice.

Performance-Based Pay

Seniority had been a key contributor to salary in the past; however, more companies have moved to performance-based pay. Regardless of the number of years a person has been on the job, the quality and quantity of work has become more of a driver than years of service to a company. According to USLegal, this is a visible change especially in Japanese manufacturing markets.

Seniority Negatives

A perceived negative aspect of a person working many years for the same company is that the person is not exposed to many of the new technologies. Software programs and other high-tech talent is considered a hindrance to people who have stayed in one job and not adapted to new technology.

Seniority Positives

Seniority may not be highly regarded today; however, USLegal believes that seniority will once again be an important business asset as baby boomers begin to leave the job market. A person who has been on the job for many years has a wealth of undocumented knowledge about a company. As people begin to retire, a talent gap could be created. Some companies are anticipating this and developing programs such as job sharing to allow senior employees to slowly phase out of the position as new talent acquires the necessary skills.