In our low-hire labor market, employees are “job hugging” — clinging to roles they’d prefer to leave.
On the surface, job hugging looks like loyalty. Job huggers rarely cause trouble, but the problem runs deeper. Employees sticking to positions because they can’t find anything better could be a sign of a demotivated workforce.
Some turnover is healthy. But a depressed labor market is keeping many unhappy workers in positions where they’re not thriving.
HR must address this head on with better engagement strategies.
Before jumping to the solution, let’s dig deeper into the problem. What industries are seeing the highest levels of job hugging? What’s behind this trend?
Job hugging by industry
Payscale’s End-of-Year Top Jobs Report offers a clarifying view of the labor market. Some industries are experiencing greater job hugging than others.
Incumbent job growth in 2025 is running just slightly ahead of 2010 when the country began emerging from The Great Recession. Quit rates are also down as a result — when jobs aren’t available, employees stay put.
Combining Bureau of Labor Statistics (BLS) data on quit rates and incumbent job growth shows where job hugging is most prevalent.
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Business Services & Technology has the highest job hugging behaviors. Incumbent job growth has flatlined at 0% since 2023. Rising interest rates throttled VC funding, producing tighter budgets and less job growth.
Voluntary turnover in Business & Technology trails pre-pandemic levels. Job hugging looks like the new normal for the industry — at least until economic conditions improve.
However, other industries like Finance & Insurance and Health Care & Social Assistance have significantly lower rates of job hugging.
Employees in Health Care & Social Assistance are experiencing an almost entirely different job market.
Healthcare added 43,000 jobs in September — about the average of 42,000 new hires per month we’ve seen over the past year.
Several forces are driving growth in this sector: America’s population is aging and needs more healthcare. Pent-up demand for care people postponed during the pandemic is showing up now. Telehealth makes it easier for patients to get treatment.
HR teams at hospitals and health clinics aren’t sweating job hugging — they’re mostly worried about hanging on to employees.
Mostly.
Healthcare isn’t immune to labor market slowdown, but it’s weathering it better than others. Both labor demand and quit rates dropped in 2025, yet still outpace other industries.
Industry differences in job hugging behavior matter. It informs your strategy as an HR practitioner.
That strategy starts with a sobering truth: job hugging erodes the health of your organization.
Its hidden costs include:
- Lack of turnover: Some turnover is productive. Not every employee is a fit, and some organizations lack advancement opportunities. In a healthy market, both employers and employees have options — leading to workforce balance. When employees lack choices, you end up with dissatisfied employees you can’t replace without a layoff or termination.
- Productivity declines: Performance stalls when disengaged employees coast. Workers staying out of fear instead of commitment don’t bring their “A game” to the office. They may complete their assignments but rarely go above and beyond.
- Morale plummets: Disengagement spreads like a contagion. It only takes one disengaged employee openly discussing their desire to leave to impact teams. Soon, entire business functions adopt a “we’re stuck here” mentality that’s difficult to reverse.
- Top talent exits: Your very best employees always have options, even in tight labor markets. When top talent sees their job-hugging colleagues rewarded for mediocrity, they start job hunting. They might not leave right away, but they’re planning their exit the moment the market loosens.
Countering the negative effects of job hugging demands more than team-building events or employee appreciation rewards. You need to address the root cause.
Re-engaging employees who’ve checked out
Spotting worker apathy isn’t hard. Just watch out for the signs.
- Failure to complete assignments and low performance
- Resisting new processes or tools (without legitimate reason)
- Shifting blame to other employees
- Expressing cynicism about goals and company future
It’s important to note: disengaged employees are often dissatisfied with their pay.
The disconnect between employers and employees around compensation is enormous: 93% of employers think employees trust their pay decisions. Only 61% of workers do.
Whether 39% of workers are wrong about whether their pay is equitable misses the point. Poor pay perceptions can accelerate disengagement.
Other employees will never be satisfied with their pay — not because the number is wrong, but because compensation can't fix what's actually bothering them.
A disengaged employe might complain about pay when the real issue is misalignment with your corporate culture or pace. Your Software Engineer bored by repetitive work won’t suddenly become engaged with a pay increase.
Mission matters too. If someone doesn’t believe in what the company does or stands for, every paycheck feels inadequate. Compensation becomes a convenient scapegoat for “I don’t want to be here anymore.”
Before treating pay adjustments as a panacea for job huggers, identify whether compensation is driving dissatisfaction. A quick diagnostic: Are they complaining about pay specifically or expressing general frustration with their jobs that happen to include compensation?
For employees where compensation is the barrier: Re-engaging employees starts with a frank discussion about their current compensation and career pathways.
Here’s the blueprint.
#1. Pay transparency wins the day
Murky pay practices affect workplace performance. Your employees want answers beyond their paycheck, so give it to them. What is the pay range? How was their pay range determined? Where are they slotted on the pay range and why? What’s the pay progression for their current role? Pay transparency means explaining not just what employees earn, but why they earn it.
#2. Nothing beats a solid compensation strategy
Transparency only motivates employees if it’s grounded in consistent pay practices and equitable pay structures. Trust us: we’ve seen in backfire.
#3. Career growth opportunity shows you care
Put yourself in the shoes of a disengaged employee. They may feel invisible — that their career goals don’t matter, even if they a paid appropriately for their current job. To really engage employees, you need to consider the next step in their career.
Once there is a career path for all your job families, you can schedule development discussions focused on where your employees want to go, not just their pay and performance for their current job. Focus on the work that leads to a potential promotion or a path to a role that energizes them.
In a tough market, career conversations signal that growth is possible, and engagement with the organization is worthwhile. When workers see clear pathways forward and understand how their progress impacts their pay, they’ll shift from feeling trapped to invested.
Will you be ready for the labor market rebound?
Job hugging won’t last forever. Hiring will pick up again. Opportunities will expand. Suddenly, your employees who’ve been quietly seething will have options.
What will happen to organizations that don’t have fair pay and career growth opportunities? They risk a mass exodus of talent. Employees who have spent years feeling undervalued and underpaid will go elsewhere — maybe to your direct competitors.
Remember: the “stability” of lower turnover masks a deeply demotivated workforce. These employees aren’t loyal — they’re trapped. Demotivation doesn’t simply reverse itself. It calcifies into even deeper resentment.
The companies that emerge strongest won’t be the ones that took advantage of employees having limited options. They’ll be the ones that recognize a depressed labor market and job hugging as a threat: build fairer pay structures and clear career pathways to reward the talent they want to keep.
Your employees are making a choice every day: stay or start planning their exit. Are you giving them a reason to choose you? Or are you letting disengagement weigh down productivity, while waiting for employees’ inevitable exit interviews?
You have two choices: build motivation now or rebuild your workforce later.
