A new, trendy HR catchphrase is making the rounds, but according to one Canadian expert, “job hugging” is an old phenomenon.

The trend of employees holding on to their current jobs even if they’re not fully satisfied often happens with an economic downturn, says John Trougakos, professor of HR management at the University of Toronto.

But it’s a change that should be taken seriously by Canadian HR and employers as an opportunity to double down on retention tactics, he says.

“We're in a moment where there is greater leverage for the employer … and so they can be more selective, they can kind of be more forceful in their policies.

“We already see it with companies, without any real data or reason, forcing employees back to the office full-time, in that sense.”

Job hugging: the risks of short-term thinking

Eagle Hill Consulting’s Employee Retention Index from July 2025 shows some telling results: employee retention rates rose slightly, continuing an upward trend that remains below rates this time last year.

The most striking result, however, is the “sharp decline” in employee perception of the external job market, according to the report, which states: “The Market Opportunity Indicator—a measure of employees’ confidence in finding jobs elsewhere—dropped by 4.4 points, the steepest decline since the Index began.”

Trougakos cautions, however, that this leverage employers are enjoying right now is temporary; those that forget that fact, he stresses, run the risk of losing their best people.

“Eventually, there will be more jobs available to people,” he says.

“They may be pushing the employee to coming to a place where they say, ‘Okay, well, I can't move now, but when there's an opportunity, I'm going to go.’”

Pitfalls of policy overreach during low turnover rates

The latest Eagle Hill data shows that while retention appears stable, indicators of organizational confidence and culture have slipped – down 1.1 and 0.7 points, respectively. This decline suggests that employees may be staying put, but are not necessarily feeling more connected or engaged.

Trougakos identifies a common misstep that employers make when employees have less mobility: pushing through unpopular policies: “Putting policies in place that are short-sighted, in the sense of ‘Now's our chance to do X. And we know that nobody likes this, but we're going to make it happen anyways.’”

Using mandatory return-to-work policies (RTO) as an example, Trougakos explains how short-term benefits of a lower turnover rate in response to a policy change will be balanced out by the resulting hit to morale.

“You see a decrease in quality of the culture of the organization, and ultimately, productivity,” he explains, adding that when the job market improves, organizations that have relied on coercion rather than engagement may face a mass exodus of talent.

“Down the road, what you see is people don't have loyalty to the organization, and just because they can't leave now doesn't mean that they don't want to leave,” he says.

“If you create an environment where your staff wants to leave, when they get that opportunity – which inevitably, the cycle will shift, they will have the opportunity – then guess what? They will leave. And then the organization is going to have challenges, maybe not in the immediate time, but certainly down the road.”

Pitfalls of policy overreach during low turnover rates

The latest Eagle Hill data shows that while retention appears stable, indicators of organizational confidence and culture have slipped – down 1.1 and 0.7 points, respectively. This decline suggests that employees may be staying put, but are not necessarily feeling more connected or engaged.

Trougakos identifies a common misstep that employers make when employees have less mobility: pushing through unpopular policies: “Putting policies in place that are short-sighted, in the sense of ‘Now's our chance to do X. And we know that nobody likes this, but we're going to make it happen anyways.’”

Using mandatory return-to-work policies (RTO) as an example, Trougakos explains how short-term benefits of a lower turnover rate in response to a policy change will be balanced out by the resulting hit to morale.

“You see a decrease in quality of the culture of the organization, and ultimately, productivity,” he explains, adding that when the job market improves, organizations that have relied on coercion rather than engagement may face a mass exodus of talent.

“Down the road, what you see is people don't have loyalty to the organization, and just because they can't leave now doesn't mean that they don't want to leave,” he says.

“If you create an environment where your staff wants to leave, when they get that opportunity – which inevitably, the cycle will shift, they will have the opportunity – then guess what? They will leave. And then the organization is going to have challenges, maybe not in the immediate time, but certainly down the road.”

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