Job hugging on the rise – how employers should respond

As a growing number of Australian employees choose to stay in roles they may no longer enjoy – a trend known as “job hugging” – organisations face increasing and often underestimated risks, making proactive strategies essential to address their impact.

As economic uncertainty deepens and confidence in the job market weakens, more Australian workers are choosing to stay put – even when they’re unhappy in their roles.

The phenomenon, known as “job hugging”, is emerging as a defining trend in Australia’s labour market in 2025, reshaping how organisations think about retention, performance and hiring.

Speaking with HR Leader, Jasleen Kaur, an HR adviser in Gartner’s HR practice, shared how the phenomenon is showing no signs of slowing in the Australian labour market, pointing to new research that reveals a sharp and ongoing decline in active jobseekers.

“According to a recent Gartner survey, employee confidence in both the business environment and job availability has been dropping in Australia and other global markets since the beginning of 2025, which also impacts their job-seeking behaviour,” she said.

“The number of active jobseekers in Australia dropped from 23.9 per cent in Q1 2025 to 18.1 per cent in Q2 2025.”

While the term “job hugging” may be relatively new, Kaur noted that the behaviour itself is well known to human resources professionals, explaining that periods of “economic and labour market” uncertainty have historically encouraged employees to “behave in this risk-averse manner”.

Risks for organisations

While the trend may appear beneficial for organisations at first glance, misreading job hugging can carry significant risks.

Although retention figures may look healthy on paper, Kaur stressed that retention does not necessarily equate to engagement or productivity across the workforce.

“Even though Australian employees are showing intent to stay in their current role, it doesn’t always mean higher performance,” she said.

“Despite retaining these employees, they may not be putting forward their best work from a performance and productivity standpoint. Gartner’s research shows their willingness to go above and beyond in their role is decreasing.”

Kaur warned that job hugging is also increasingly derailing recruitment, with candidates walking away at the final hurdle and choosing the safety of their current roles over the uncertainty of a new opportunity.

“On the other hand, job hugging also directly impacts the company’s ability to fulfil its hiring needs,” she said.

“According to Gartner’s Q3 2025 Voice of Candidate Survey, while nearly half of candidates globally are still receiving multiple job offers, offer acceptance rates are steadily declining, with fewer candidates accepting the offers made to them.”

Kaur warned that this reality can be costly for recruitment teams, as organisations unprepared for job hugging may spend weeks or months progressing candidates through the hiring process, only to have offers declined at the final stage and roles left unfilled.

“Recruiting teams unprepared for this are likely to go through the entire recruitment process only to have their offers declined, unable to fulfil their hiring goals, while having invested resources wasted,” she said.

How can organisations respond?

In this environment, when employees are job hugging and feel trapped rather than committed, Kaur emphasised the importance of re-engaging them by recognising their contributions and celebrating their high-performance moments to reignite motivation.

“When employees feel ‘stuck’ in their jobs, it’s important to help them see how they’ve been contributing to the organisation and how they can keep pushing themselves forward,” she said.

“It’s important to recognise their high-performance moments. Focus on giving them public recognition for the work they’ve done so far to motivate them. Financial rewards like one-off bonuses are also great ways to incentivise them.”

At the same time, Kaur highlighted the importance of organisations staying alert to the mental health impacts of prolonged uncertainty, which can heighten anxiety, increase stress levels, and accelerate burnout.

“In this uncertain environment, it can be quite anxiety-inducing and stressful for employees, which impacts their mental health and causes burnout. Employee wellbeing, work/life balance and stress levels must be actively tracked and managed to avoid this,” she said.

Another key area of focus, Kaur explained, is professional development, explaining that integrating employees’ personal goals into performance conversations can foster greater fulfilment and a shared sense of purpose.

“In addition, focus on professional and personal growth. Incorporate personal goals into their performance so they feel a greater sense of fulfilment and shared purpose with the company,” she said.

“Demonstrate to them that their personal goals and aspirations are important by not just investing in their professional development but also personal growth.”

Will this be a new reality?

Looking ahead, Kaur predicted that job hugging will persist as long as economic volatility and labour market uncertainty remain high, noting that encouraging stronger performance alone will not resolve hiring challenges, especially when fear of the unknown is driving candidate decisions.

“As long as the market is in flux and uncertainty is high, job hugging is likely to continue. While encouraging employees to aim towards better performance is a great step forward, it won’t solve hiring challenges,” she said.

“Currently, candidates are choosing to stick with the devil they know [rather] than the one they don’t. A lot of their fear when changing an employer is fear of the unknown – whether a new employer will offer the kind of experience and culture they want, or if the employer will treat them right.”

To tackle this challenge, Kaur urged organisations to embrace selective engagement – a targeted, relationship-driven recruitment approach that builds trust by providing transparency about how the organisation operates and tailoring conversations to each candidate’s unique needs.

“It’s important to prioritise selective engagement, which involves building long-term strong partnerships with critical candidates,” she said.

“Recruiting can use selective engagement to proactively address and mitigate these fears by building meaningful relationships with critical candidates, tailoring their approach to address individual needs and expectations like hybrid work options, work/life balance, opportunities for learning and development, and connections with colleagues.

“It also provides insight and transparency into how the company is doing, how work gets done, team culture and more, which makes the decision on whether to join far easier.”