An unprecedented crisis followed the pandemic in corporate circles when quality talent across roles exited workplaces with audacity, seeking flexibility and advancement. Anthony Klotz, a professor at Texas A&M, famously termed this trend the Great Resignation. Back then, job-hopping was a sign of ambition.
Fast forward to today, and the pendulum has swung to the other extreme. We are witnessing what talent strategists now call “job hugging” -- employees clinging to their current jobs, not out of loyalty, but out of latent fear. This reversal is not anecdotal.
Globally, “quits rates” have nosedived, signalling declining labour market confidence. In the USA, it has remained at 2% since early 2025, the lowest sustained level since 2016, excluding the pandemic. In India, attrition in IT services has halved from nearly 30% in 2021 to under 15%. A recent LinkedIn Workforce Confidence survey shows that, for the first time, Indian professionals prioritise “job security” over “career growth”.
With over 1.2 crore new entrants joining the job market annually and unemployment at alarming levels, this psychological retreat from risk has become a structural bottleneck.
What is often seen as loyalty in India now has a new name: ‘job hugging’. It stems from financial stress and deep-rooted risk aversion. The irrational exuberance in the job market now mirrors volatile stock markets. Job-hopping has been replaced by a wait-and-watch stance—like investors holding cash in turbulent times.
Several recent tremors have conditioned this cautious mindset:
* Over 30,000 jobs in the start-up sector were cut during the tech winter of 2023, leaving many who left big companies for better pay unemployed.
* EdTech giants like Byju’s collapsed due to poor governance and inflated valuations, shrinking job availability further.
* IT majors, including Infosys, drastically slowed down hiring. In 2024, many campus recruits were left in limbo, with onboarding indefinitely delayed.
Faced with shrinking external opportunities, many professionals are choosing to stay in unfulfilling roles. The market is no longer about growth; it’s about survival.
India has long been proud of its world-class human capital, a youthful, educated workforce capable of driving knowledge economies across sectors from IT to fashion. But this promise is being choked by a troubling paradox: abundance of skills paired with underemployment, and a formal sector that fails to absorb the swelling ranks.
Data supports this: although the IT and BPM sectors employ over half a crore professionals, this is just a fraction of India’s workforce. Manufacturing, which was expected to drive mass employment, is projected to contribute less than 13% to GDP this year.
In this bleak scenario, job hugging is especially damaging. If anyone mistakes it for stability, they are in a fool’s paradise. When aspiration is replaced by fear, it affects everyone—from CEOs to policymakers.
This immobility has several consequences:
# Stagnant innovation: With fewer fresh perspectives, even jugaad innovation slows down.
# Flat salary growth: Employers exploit a cool talent market, leading to stagnant wages.
# Obsolescence risk: As AI and automation evolve job roles, those who don’t reskill risk being left behind.
Romanticising job hugging as love for the company is a typical cultural misreading. It’s not about loyalty—it’s about fear. And unless addressed, it risks transforming India’s demographic dividend into a demographic deadweight.
From Skill Abundance to Skill Atrophy
The government envisions transforming India from labour abundance to skill abundance. But this vision is under threat. When movement across sectors, geographies, and hierarchies halts, it leads to:
- Workplace complacency
- Stagnation among professionals
- Slower economic growth
Low attrition might appear positive at first glance. CHROs may celebrate filled positions and lower hiring costs. But that’s short-sighted. When employees stay out of fear, they are less likely to reskill. Their employability shrinks, particularly in an AI-augmented world. As a result, discretionary spending falls, hurting overall demand.
The irony is hard to miss: a nation with the largest pool of educated youth is paralysed not by lack of jobs alone, but by lack of confidence.
Employers must recognise that today’s low attrition may breed tomorrow’s disengagement and quiet quitting. The long-term cost of professional inertia is too high to ignore.
So, what should India Inc do?
Best Practices to Tackle Job Hugging
1. Design internal mobility
If the external job market is tepid, make internal moves more dynamic. Offer lateral shifts, cross-functional roles, and international projects. For instance, TCS runs a “Job Marketplace” that algorithmically matches employees to opportunities across its ecosystem.
2. Make reskilling non-negotiable
A McKinsey survey shows that 87% of Indian executives see skill gaps as a top-three business risk—yet less than half have robust reskilling plans. Firms must institutionalise continuous learning. Infosys’s Lex platform sees over 20 lakh course enrolments annually.
3. Redefine job security
For a generation shaken by layoffs, psychological safety matters as much as a paycheck. Wellness incentives, mental health support, and honest communication build trust. Security should be felt, not just promised.
4. Communicate with clarity and purpose
In volatile times, leadership clarity steadies teams. A purpose-driven narrative, even if the endgame is still forming, helps mobilise people out of inertia. Microsoft, for example, used its “learn-it-all” mantra to build a culture of curiosity amid uncertainty.
The pendulum will swing back. But until then, job hugging is like clinging to the deck chairs of a sinking Titanic. It may feel safe, but the ship is still going down.
Don’t risk choking India’s future by mistaking fear for stability.
In careers, as in life, hugging too hard can choke the future.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
