One of the main goals of many workers is to advance in a career field to positions that offer more responsibility, better pay and better benefits. Some workers are able to advance in their careers through seniority. Seniority is a system in which workers who have worked for a certain employer or held a certain position longer than others enjoy benefits over newer workers. Unionized employees often work in seniority systems.
Guaranteed Promotions and Benefits
An advantage of seniority is that it can essentially guarantee promotions and advancement in a job field. For example, a union might mandate that all workers who work at a certain job for five years get a promotion, a raise and an increase in job benefits. Increased compensation because of seniority can help reduce employee turnover because quitting a position will forfeit seniority.
Another potential benefit of seniority is that it can protect those that have achieved seniority from being laid off. The specific rules of seniority vary from one union and company to another, but they usually include protections that force employers to lay off newer workers before workers who have achieved seniority. Workers with a high level of seniority tend to have high job security. On the other hand, workers with low levels of seniority often have low job security. If an employer has to lay off 10 workers, it might simply fire the 10 workers with the lowest levels of seniority.
A potential disadvantage of seniority systems is that they tend not to reward performance. If you work at a job with a seniority system in place, you might have to achieve seniority to get a promotion or a raise, even if you consistently outperform your coworkers. Seniority systems can create a disincentive to be productive. If the only way you can advance in a job is simply by working there for a certain amount of time, you have little incentive to work harder than others.
Slow Career Growth
Another drawback of seniority systems is they might result in slow career growth and be unattractive to the most talented and motivated workers. Ambitious workers typically want to advance in their careers as quickly as possible, and seniority systems make fast advancement difficult. Ambitious workers who choose to avoid jobs with seniority systems might achieve faster career growth.