When employees feel like they have numerous opportunities, they tend to hop from job to job to find the best compensation they can earn at a place they enjoy working. When jobs become scarce, though, employees tend to hunker down and stick with their current positions.
When employment trends show that employees are holding on to their current jobs, insiders often use the phrase “job hugging.” The phrase means that people are “hugging” their jobs close, often because they’re afraid that losing the position could force them into long-term unemployment.
Recent reports suggest that job hugging is in effect right now. In April 2025, the quit rate fell to just 2%. If you don’t consider the drastic decline initiated by the COVID-19 pandemic in April 2020, we haven’t seen such a low quit rate since 2016.
Similarly, the hire rate has been very low for at least a year. In April 2025, the hire rate was 3.5%. It’s easy to see why people are concerned when you compare that to the 4.6% hire rate in November 2021. Put bluntly, employees are worried that they don’t have many job opportunities, so they’re eager to keep the positions they have.
Why Job Hugging Matters
Job hugging could influence several employment issues in several ways, both potentially positive and negative for employers.
Businesses looking to cut rising costs will likely see this as a positive trend. People often leave their jobs because they know they can get better compensation elsewhere. There’s a strong connection between wage growth and career mobility. The job hugging trend in 2025, therefore, suggests that compensation packages might not need to increase significantly in the near future.
On the negative side, lower career mobility could mean that fewer professionals gain experience outside of their current roles. Without talent development in uncertain markets, employers might struggle to fill leadership positions. Even if your company seems to function well now, you could face this issue several years down the road when people filling those leadership roles start retiring.
Market Snapshot (June–August 2025)
Are there more signs that job hugging will influence employment trends? A look at recent data shows that:
- The U.S. only added 73,000 jobs in July, falling short of the 100,000 Dow Jones estimate
- U.S. job growth has been slowing for years (in February 2022, the economy added 904,000 jobs, more than it added in the first half of 2025)
- The July 2025 unemployment rate was the second-highest it’s been since 2022
- U.S. wage growth has fallen significantly since 2022, reaching a 5.9% peak in March 2022, before beginning a slide to 3.9% in July 2025
These trends suggest several things related to the state of employment in America:
- With slower hiring and wage growth, employees don’t feel that they have many opportunities to pursue
- With the U.S. adding below-expected jobs each month, employees worry about their futures in an uncertain economy
- Uncertainty and stagnation force companies to worry about how they will find candidates capable of filling difficult roles
In other words, the current economic climate creates a lot of uncertainty and worry for both employees and employers.
Leadership Tips in an Uncertain Economy
With these data points in mind, companies must consider how they will stand out. Despite any healthcare and corporate hiring trends that suggest low mobility, some workers still need to enter the job market. Similarly, some professionals will still want to find new jobs.
Standing out will likely involve showing potential job candidates why they should choose your company over others. Recruitment and employee retention strategies include:
- Demonstrating that your company offers career development and stretch assignments that help people grow their skills
- Encouraging intra-role mobility and cross-team projects to help employees gain new skills and keep them interested in their jobs
- Communicating clear career paths that let employees know how they can take control of their futures
- Balancing retention with fresh entry-level talent to maintain a steady, effective workforceÂ
Making MRINetwork Work for You
Companies will struggle to stay ahead of these and other emerging trends. Luckily, you don’t need an entire HR department to keep up. MRINetwork’s experts can use their experience to create a personalized strategy that works for your specific organization.
Connect with an MRINetwork office near you to learn more.
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