Job Hugging in Canada: Why Workers Stay Put and How Employers Should Respond

, by Stephanie Messier |

Canada’s 2025 labour market is shifting. Instead of chasing opportunities, employees are “job-hugging”—staying put in their current jobs despite potential internal frustrations and increased employee relations issues. This behaviour is a rational response to economic and geopolitical uncertainty, and it has consequences for employers.

Why Employees Are Job Hugging

• Unemployment is rising: Canada’s rate sits above 7%, with youth unemployment at 14.5%.
• Vacancies are shrinking: Open roles fell 16% year-over-year (StatCan).
• Trade tensions are real: U.S. tariffs cut into exports and growth (Bank of Canada).
• Risk tolerance is low: Only 0.4% of workers switched jobs in July, a record low.
• Worker sentiment is cooling: Just 26% of Canadians plan to job-search in late 2025 (Robert Half).

What This Means for Employers

1. Retention looks better than it is. Workers stay out of caution and financial obligations, not necessarily out of loyalty.
2. Engagement risks slip. Employees avoid risky moves, even internally.
3. Recruitment slows. Fewer vacancies, cautious candidates, and longer funnels shape hiring dynamics.
4. Increased Employee Relations Issues. There has been an increase in conflicts and tension internally, resulting from the lack of movement that is impacting healthy attrition.

Employer Playbook

• Communicate Stability: Highlight key initiatives the organization is doing to manage through uncertainties to increase employees’ confidence.
• Invest in Growth-at-Work: Skill-building and career development help retain key employees, but it's also important to regularly check in with staff and organize small team-building activities to keep a healthy level of engagement.
• Train Managers on Managing Conflict: Equip your managers with the skills they need to navigate employee relations and resolve conflicts.
• Adapt Hiring Strategy: Nurture talent pools, focus on passive candidates, and prepare for a wave of mobility once confidence rebounds.

Job-hugging offers a short-term shield for employees but presents a long-term challenge for employers. Organizations that focus on stability messaging and invest in management and employee development will come out stronger—retaining motivated teams today and attracting top talent once the market stabilizes.

Contact us at info@hralacarte.ca to learn more about how we can assist your organization with HR practices, including hiring, onboarding, employee relations, workplace investigations, performance management, terminations, and more.