Why Job Hugging is the New Normal in Canada's Cooling Labor Market

The Rise of Job Hugging

Have you hugged your job lately? In today's uncertain economic climate, more workers are choosing to hold on to their current positions rather than risk job hopping. This trend, known as job hugging, is gaining traction as employees cling to their jobs for dear life.

What is Job Hugging?

According to Korn Ferry, an organizational consulting firm, job hugging refers to employees holding on tightly to their jobs due to fears about the labor market. The Eagle Hill Retention Index supports this, indicating that most employees plan to stay with their current employer for the next six months.

Why Are Workers Job Hugging?

Worker confidence in job opportunities is dwindling, driven by uncertainty around the broader economic outlook and threats like AI and automation. The quits rate, a key indicator of labor market perceptions, has remained low at around 2% since the start of the year, levels not seen consistently since 2016, excluding the COVID-19 pandemic period.

Mark Zandi, chief economist of Moody's Analytics, notes that this reluctance to change jobs reflects heightened worries over job security. Employers are becoming more cautious, and after a surge in job switching during the pandemic, many workers are now in roles that better suit their skills and pay well, making them hesitant to leave.

Impact of Economic Factors

Recent data shows that U.S. employers added just 73,000 jobs in July, with hiring stalled due to factors like import tariffs, immigration crackdowns, and federal layoffs. This sluggish job growth has made workers nervous about finding new opportunities, leading them to stay put even if they're unhappy.

Social media is filled with stories of frustrated job seekers submitting hundreds of applications with no responses, and overqualified candidates applying for entry-level positions. One Reddit user shared, "My cousin made the mistake of quitting her job because the situation was so toxic. She thought with her experience she’d easily find something new, and now she’s working overnights at a gas station to try and stop the hemorrhage of money."

Employer Dynamics

Workers feel that employers now have the upper hand, using it to enforce return-to-office mandates and reduce benefits. As another employee on Reddit expressed, "They know how bad the job market is out there so they can get away with this. Their employees can’t leave because there aren’t better opportunities. It’s extremely frustrating and has made lots of people in my company feel hopeless. We’re stuck."