According to data collected by Eagle Hill Consulting, most workers will remain in their current roles for the next six months.
The decision to stay in a current job rather than looking for new opportunities has a lot to do with employees’ perceptions of the external job market. Eagle Hill says the market opportunity indicator has dropped by 4.4 points, to a record low. This brings the retention index up to 102.9.
The trend has been termed "job hugging" by consultants at management consultancy Korn Ferry.
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"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]," Korn Ferry Senior Client Partner Matt Bohn told CNBC.
Data from ther Bureau of Labor Statistics backs this up. The rate at which workers are voluntarily leaving a job, or the ‘quits rate,' has hovered at around 2% since the beginning of the year. The Federal Reserve Bank of St. Louis says that with the exception of the early days of the pandemic, quits rate levels haven't been that low since early 2016.
This is all in stark contrast to the great resignation of 2022, when more than 50 million people voluntarily quit their jobs.
"There is this stagnation in the labor market, where the hires, quits and layoff rates are low," Indeed Director of Economic Research Laura Ullrich told CNBC. "There's just not a lot of movement at all."
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Korn Ferry consultants say this job hugging may not be a good thing for employers.
The uncertainty of the labor market can cause workers to become too comfortable, resting in their holding patterns rather than developing new skills and furthering their careers. In turn, this can block new, motivated employees from entering the workforce.
"Firms run the risk of becoming comfortable perches from which workers can jump when the time's right," Bohn said in a note posted to the firm's website.
Stacy DeCesaro, Korn Ferry managing consultant, agrees. "Right now, top performers are only leaving if they're miserable in their roles," she said in the note.
There are, however, things employers can do to ensure job hugging doesn't become a death sentence for their businesses.
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Implementing strong programs for internal development and better ways for managing performance are among the best ways to capitalize on the stagnant job market, the firm says. This will allow companies to develop the talent they already have on board and create new, internal career paths that could help cut down on turnover rates even after perceptions on the external job market improve.
"It's great to have a long-tenured workforce and build capacities within it," Korn Ferry Global Human Resources Partner Dennis Deans said in the firm's note.
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