Sleep and functioning are associated with a risk of early workforce exit. However, patterns of change in sleep and functioning through time have not been investigated using person-oriented approaches to show what features of sleep and functioning are associated with an early exit. We examined the pattern of interactions between sleep and health functioning characterizing homogenous subgroups of employees and their associations with premature work exit. An additional aim was to provide a tutorial providing detailed description on how to apply these models, compared to traditional variable based risk factors. We analyzed data from 5148 midlife employees of the City of Helsinki, Finland, surveyed over three phases (2000-02, 2007, and 2012). Using repeated measures latent class analyses (RMLCA) we classified people into groups based on their trajectories in sleep and functioning. We identified four longitudinal groups: (1) Stable good sleep and functioning (reference), (2) Persistent sleep problems and good or moderate functioning, (3) Poor functioning with good sleep, and (4) Problematic sleep and health functioning. Compared to group 1, elevated risk was found in all classes with group 4 being the worst. In conclusion, focusing on person-orientated patterns of interactions between sleep and functioning helped produce qualitatively different and quantitatively stronger predictions than using conventional risk factor methodology. Thus, longitudinal person-oriented approaches may be a more powerful method for quantifying the role of sleep and health functioning as risks for premature exit from work.