How Total Rewards Can Break the Cycle of ‘Job Hugging’

At first glance, low turnover might look like a win. But in today’s uncertain economy, many employees are staying put — not because they’re thriving, but because they feel like they must. It’s a behavior known as “job hugging.”

Job hugging creates a retention mirage. On paper, stability looks good. Beneath the surface, disengagement quietly erodes energy, innovation and performance. While turnover has slowed, more than half of leaders planning to leave within the year are already disengaged, according to the HR Insights Report 2025 from leadership development firm DDI.

When employees stay with their employer out of fear rather than fulfillment, organizations risk stagnation. People hold tight to what feels safe because they’re uncertain of what’s next or whether they’re capable of succeeding in a new role. Recognizing that fear is the first step to rebuilding engagement and helping people move forward with purpose.

Signs of Job Hugging

Job hugging shows up in subtle ways: silence in meetings, fewer ideas or a drop in initiative. Often, these are once high performers who’ve slipped into “maintenance mode,” doing just enough to get by.

When job hugging spreads across teams, the cultural cost compounds. Disengaged employees don’t just underperform; they create a contagion effect that drags others down.

DDI research shows that leaders who receive recognition, support and feedback are 5.4 times more likely to be engaged. But leveraging those drivers means viewing retention not as a metric of success but as an outcome of purpose and growth.

Why Total Rewards Should Take the Lead

Job hugging isn’t just a leadership or culture issue — it’s also a total rewards (TR) challenge. While traditional retention factors such as pay, benefits and recognition are essential, they’re no longer enough. The TR offering also must fuel engagement and development.

DDI research shows retention is fruitless without engagement. Leaders who feel purpose, trust, inclusion and interpersonal support are 26.2 times more likely to be engaged.

TR professionals can design systems that nurture these conditions, blending pay development and recognition into a cohesive experience.

Uncertainty becomes opportunity when leaders focus on transparency and development. By helping people see that career growth doesn’t have to mean leaving, organizations can transform fear into forward momentum.

Turning Job Huggers into Engaged Contributors

Breaking the job-hugging cycle requires both mindset and system shifts. Here’s how TR leaders can turn passive retention into active engagement:

1. Encourage “stay conversations.” Equip leaders to have proactive discussions about what keeps employees engaged and what might cause them to leave. These conversations provide early warning signs and spark renewed connection. Since leaders are the No. 1 reason people leave, open dialogue can turn someone who’s simply “hugging” their job into a committed, engaged team member.
2. Link pay to purpose and connect incentives to milestones. Help employees see how they can increase their earning potential — whether by progressing within their function or exploring roles elsewhere in the organization. Focus on growing skills and experiences that enhance capability, increase value and deepen impact.
3. Reinvest in development. Integrate personalized development into the rewards strategy. Organizations using assessments to guide development are 1.8 times more likely to rank among the top financial performers. Demonstrating commitment to employee growth signals care and drives engagement.
4. Create career pathways. Employees are more likely to stay when they see a clear future. Career maps that connect skills to advancement turn uncertainty into possibility and underscore that success comes from continuous growth.
5. Recognize everyday impact. Recognition shouldn’t wait for annual reviews or milestones. Frequent, specific acknowledgment reinforces contributions and builds connection to keep people motivated.

Healthy Career Movement Is Good for Retention

If you recognize an employee as a job hugger, see it as a signal, not a flaw. Use it to rediscover what they want from work and help energize them. It’s a chance to understand what’s holding people back — fear, uncertainty or capability — and open new paths forward.

The goal isn’t to eliminate turnover. Healthy movement, like lateral transitions and stretch roles, is a sign of a vibrant organization. By contrast, job hugging traps potential energy — for the individual, their leader and their peers. When employees can picture a future for themselves, retention becomes a choice grounded in growth rather than fear. That’s when job hugging turns into genuine commitment.

Retention won’t be defined by who stays, but by who stays engaged. Every rewards decision reflects an organization’s values. When those decisions emphasize growth, trust and purpose, they increase the likelihood that employees respond with energy and commitment — and organizations can thrive.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Experience
• Employee Recognition
• Total Rewards
• Workforce Engagement