By Maggie Mancini
The employment market has slowed in recent months, with the U.S. adding just 22,000 jobs in August, according to the Bureau of Labor Statistics. Employees are quitting less often than at any non-pandemic time since 2018, even when they are otherwise disengaged. This has led to an increase in the number of "job hugging" employees—workers who are staying in their jobs not because they feel connected to their work, but because they are afraid to seek opportunities elsewhere.
This widespread decline in attrition is, in part, happening due to a white-collar recession, says Josh Bersin, global industry analyst and CEO of The Josh Bersin Company. As AI slows or eliminates hiring, it has become difficult for both skilled employees and entry-level candidates to secure jobs. This results in people "hunkering down" to stay where they are and has created a lot of fear.
At the same time, many employers are experiencing financial challenges within the current economic and business landscape, says Mike Gomez, VP of HR at Tasty Restaurant Group. This has resulted in turbulence within the workforce, especially for employees looking for stability.
"Economic uncertainty and rapid technological innovation have made people anxious about their job security, and they feel that because they have something now, they should hold onto it. Otherwise, there may not be another job waiting for them."
Since high attrition is a chronic problem in industries that hire hourly workers, a drop in turnover might seem like a good thing at first, Chernoff says. However, there's a clear difference between retention due to genuine engagement and retention due to fear. Job hugging speaks more to the latter.
In some cases, like in the tech industry, voluntary attrition has slowed alongside an increase in involuntary attrition, says Jennifer Christie, chief people officer at Docusign. This is largely due to economic uncertainty and how generative AI is affecting productivity and the overall workforce. "This is impacting employee mobility, and job hopping has turned into job hugging," she says.
Christie suggests that HR leaders should not focus on what is driving the decline in attrition, since so much of it is outside of their control. Rather, it's important to understand and address how much this is impacting their organization's talent.
"When employees are not moving on to new opportunities outside the organization, it can create stagnation for career growth for employees, especially in small- to mid-sized organizations that don't have the option of just simply adding headcount in order to create opportunities for people to move on to new roles or get promoted," she says. "Backfilling roles with internal talent that is hard to pull in this environment, and employees are getting increasingly frustrated and even your brightest talent can start to disengage."
Keeping these employees engaged is incumbent on two things, Christie says.
Be creative about developing growth opportunities. Even if an organization can't offer employees a new role to jump into, providing an opportunity to lead a high-growth project, travel to attend an offsite, or learn a new skill can be a changemaker.
Maintain a high bar for performance. "There are still a lot of employees working really hard and who are trying to have an impact, and it is demoralizing for them to work alongside colleagues who have disengaged or are not doing their part," she says.
Engaging Job Huggers
"The job hugging trend is a signal to organizations that they must double down on worker development and connecting with their people," says Doreen Coles, senior director of career growth and development at ADP. "To avoid complacency, HR leaders should focus on enabling meaningful career growth conversations, adopting a strength-based culture, and connecting employees' personal purpose to the organizational priorities to help reignite motivation and engagement at work."
Perhaps the easiest way to improve engagement is to offer more flexibility, Chernoff says. According to Legion's State of the Hourly Workforce Report, 61% of hourly workers consider flexibility their top priority besides compensation. Hourly employees should have the ability to have a schedule that meets their preferences or easily swap shifts with a colleague when something comes up. Leaders can also leverage scheduling to improve productivity, she says, whether by placing new employees with managers for training purposes, or staffing the highest performers on the busiest shifts. "Leaders want to ensure that people are staying in their jobs not out of necessity, but because they like them," Chernoff says. "Now may not seem like the time to make sweeping investments in the employee experience, but there are plenty of cost-effective, high-ROI ways to keep employees engaged at work that won't damage your bottom line. Rather, they'll probably improve it."
HR leaders should understand that they don't necessarily need to make huge financial investments to build a better workplace. They can focus on things like:
flexible scheduling;
administrative task automation; and
targeted employee development to increase engagement.
When workers are encouraged to identify and use their talents at work, Coles explains, engagement increases dramatically. "Managers can take it a step further by using those insights to uncover ways they can use their strengths to contribute more to the team and the overall organization," she says. "Helping employees work within their 'strength zone' can also be a great way to mitigate 'quiet cracking,' where workers reach a breaking point and can mentally disconnect from their work environment."
HR leaders can work with the broader leadership team to deepen the engagement of all employees by creating visible feedback loops, showing employees that their input drives change, and being transparent about company direction and opportunities, Christie explains.
HR should help people leaders understand their employees' careers are personal, and that one size doesn't fit all when it comes to organizational wants and needs, Coles says. When managers take the time to ask their people what growth they're looking to achieve, they can better understand, collaborate with, and support that growth.
Another potential solution is to provide adequate benefits to all employees. Gomez explains that Tasty Restaurant Group offers its part-time and hourly employees a minimal, essential coverage benefits package to help boost retention while providing cost savings for the business.