You’re a few months into your new job and, well, you hate it — but in this economy, you’re too afraid to jump ship. 

If that story feels familiar, it’s because it is. It’s echoed in Canadian employment data and the anecdotes of post-pandemic hires, so much so that it’s spawned a new term: job hugging, the phenomenon where you hold tight to your position even if you’re unhappy.

That’s certainly relatable, a public relations professional in her 30s told the Cost of Living in a recent interview about the job she began in late 2025. (CBC agreed not to identify her because of the harm it could cause her career.) 

“I’m not fulfilled in any way or finding any kind of sense of purpose. And I’m finding that the growth opportunities that are there don’t necessarily exist.”

But she’s not leaving.

“I just hear all the time that no one’s hiring and that we should all just be lucky to even have jobs,” she said. “It’s discouraging.”

In January 2022, each month about 0.82 per cent of people left one job for another, according to data from the Bank of Canada and Statistics Canada. In 2026, even fewer people were switching jobs, with the monthly figures dropping to 0.41.

Those who watch the labour market say a number of factors are contributing to the boost in so-called job huggers — the most common being economic uncertainty and that companies are offering fewer financial incentives to lure new talent. 

“People know it’s a dangerous world out there,” said Jim Stanford, a labour economist and director of the Centre for Future Work in Vancouver. “So we’re just going to hunker down and hang on to whatever we’ve got.”

A major shift

Coming out of the pandemic, Mike Shekhtman said it was an employee’s market. He said many people left their jobs at that point, which created a labour shortage.

“We saw companies hire and even over hire,” said Shekhtman, senior regional director at Robert Half, a major employment agency in Canada. 

Companies were offering all the bells and whistles: meditation rooms, flexible work policies and other perks. And, of course, competitive salaries.

“For the most part, people felt comfortable jumping to a new opportunity, because they knew they were good for a 10 to 20 per cent increase in salary,” Shekhtman said, noting that type of pay hike was seen across different industries.

Low hire, low fire

But getting a big pay bump for switching jobs is far from guaranteed in today’s market, Shekhtman said.

Employment agency Robert Half recently surveyed 1,388 workers in fields such as technology, human resources and finance, asking whether people saw greater salary potential in moving to a new job or staying put. 

While Shekhtman said people previously believed the quickest way to earn more money was to switch jobs, 56 per cent of the study’s respondents now disagree.

Meanwhile, Canada’s unemployment rate sits at 6.9 per cent, up 1.9 percentage points since 2023. And there are fewer jobs being added to the economy, with the Bank of Canada dubbing it a “low-hire, low-fire environment.” 

So there just aren’t as many opportunities for people to jump to. It’s a time of economic uncertainty, between U.S. tariffs and high oil prices, so employers are “more cautious” in adding to the payroll and employees are nervous to leave a steady job, Shekhtman said. 

“Companies are more methodical in terms of the hiring that they’re doing, in terms of who they’re adding to the team and where they’re investing,” he said.

This kind of stagnation quickly becomes “very bad” for the economy, Stanford said. 

“A labour market that is more flexible, that has more movement for good reasons, is a labour market that’s going to be more efficient,” he said.

“It’s going to find a better match between the skills and interests of workers and the jobs that they’re actually doing, rather than having people with PhDs driving Uber because they couldn’t find something better.”

Impact on economy

The power is now back in the hands of employers, and since they are less concerned about hiring, they are slashing some of the incentives they introduced a few years ago. 

In April, consulting firm Deloitte in the U.S. announced it intends to cut back paid time off and parental leave benefits next year. Zoom is also reducing parental leave time. And employers across North America, including Ontario’s civil servants, are cutting work-from-home options.

It’s a power imbalance that can be “very damaging” to employees, said Stanford. 

“Instead of expecting that you should be treated fairly and paid well and be given opportunities for training and promotion in a job … workers are trained to accept what they have.”

Stanford and Shekhtman agree that the labour force won’t likely regain those incentives anytime soon. 

But there are a few exceptions. Shekhtman says some employers are offering performance bonuses, be it financial or other incentives, to hold onto those whom they consider their best employees

In the meantime, that unhappy PR professional — and others in her situation — will continue to make the best of the job she has. 

“I guess I’m just trying to squeeze it for all the resources I can,” she said.