Martin Barraud | OJO Images | Getty Images
The so-called great resignation has become the “great stay.” But experts say workers aren’t just staying — they’re “job hugging.”
Job hugging is the act of holding onto a job “for dear life,” consultants at Korn Ferry, an organizational consulting firm, wrote last week.
Such clinging is a stark contrast from the historic rate of job-hopping that workers exhibited in 2021 and 2022, but makes sense given current labor market trends.
“There is this stagnation in the labor market, where the hires, quits and layoff rates are low,” said Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab. “There’s just not a lot of movement at all.”
‘Uncertainty in the world’
The rate at which workers are voluntarily leaving their jobs has lingered near lows unseen since around 2016, outside of the initial days of the Covid-19 pandemic.
The so-called quits rate is a barometer of workers’ perceptions of the broader labor market, Ullrich said. In this case, they may be nervous about getting another job or aren’t enthusiastic about their ability to find one, she said.
“There’s quite a bit of uncertainty in the world — economic, political, global — and I think uncertainty causes people to naturally” remain in a holding pattern, said Matt Bohn, an executive search consultant at Korn Ferry.
He equated the dynamic to skittish investors who sometimes sit on the sidelines, waiting for an investment opportunity.
The job market has also gradually cooled amid a regime of higher interest rates, which makes it more costly for businesses to borrow money and expand their operations.
The hiring rate over the past year or so has plunged to its lowest pace in more than a decade (excluding the early days of the Covid-19 pandemic) — meaning those who want to look for a new job may have a relatively tough time finding one.
Job growth in recent months has also slowed sharply, which economists point to as evidence of a broader economic slowdown.
More CEOs reported plans to shrink their workforce over the next 12 months than expand it — the first time that’s occurred since 2020, according to a Conference Board quarterly poll published earlier this month. The shares were 34% to 27%, respectively.
More from Personal Finance:Mortgage rates have made a ‘substantial improvement’Why investors shouldn’t try to be a ‘hero’ in this economyWhy school lunch prices are up
While it’s not inherently bad to stay in a job for a long time, job “hugging” can pose some risks for the unwary, experts said.
For one, they may be sacrificing some earnings growth, since job switchers generally command higher wage growth than those who remain in their current roles, Ullrich said.
For example, workers who get too comfortable in their current role may stagnate rather than take on additional responsibility or learn new skills, which may impact marketability and career growth when the labor market improves, Bohn said. Employers may also decide such workers are no longer meeting their performance standards, he added.
Additionally, a lack of movement in the job market may make it harder for new entrants like recent graduates to find work, Ullrich said.
Correction: This article has been updated to correct the timing of the Korn Ferry and Conference Board reports.
