What’s the hidden cost of employee stagnation? The answer is an issue that’s quietly gaining momentum: job hugging.

While much attention has been paid to high turnover and the challenges of employee retention, a less visible but very impactful trend is emerging. Driven by the economic uncertainty and declining trust, employees are staying put. But they’re not thriving and could be quietly undermining workforce growth.

Job hugging refers to the growing tendency of employees to remain in roles where they feel unchallenged, disengaged, or stuck. Whether out of fear, convenience, or lack of perceived opportunity, job hugging is not a win for retention. This practice can actually be a red flag for long-term organizational health and here’s why.

What’s the Real Impact of Job Hugging?

This growing practice can stall innovation, clog career pathways, and create invisible bottlenecks in workforce mobility. While traditional turnover creates an opportunity to bring in fresh perspectives and skills, job hugging keeps the workforce static and seemingly stable.

However, this deceptively stable retention is often at the cost of low productivity and employee morale. Job hugging is being called the new “Quiet Quitting” for a reason. And it’s not a small population with 75% of workers planning to stay put through 2027.

It’s a paradox: lack of career development is consistently cited as a top reason employees leave their jobs. But when those same disengaged employees don’t leave, the damage compounds. Organizations face a productivity gap, rising disengagement, and ultimately, a workforce that struggles to evolve alongside business needs.

Employee Engagement Is Dropping (and It's Costing You)

The latest Gallup State of the Global Workplace report shows that global employee engagement dropped to 21% in 2024, with the sharpest declines seen among managers. This marks only the second year of decline in more than a decade.

That dip goes beyond morale, impacting the economic side of the organization. According to Gallup, $9.6 trillion in productivity is lost globally due to disengaged employees. That’s nearly 9% of global GDP.

With fewer employees actively engaged, organizations are seeing the ripple effects: slower growth, stalled innovation, and increased vulnerability to change. These effects are hitting organizations faster and harder with AI accelerating changing skills mandates.

Upskilling and Reskilling is a Proven Strategy to Re-Engagement

The good news is that if you’re experiencing job hugging, career development is a proven strategy to re-engagement.

The EdAssist by Bright Horizons’ 2025 Education Index reveals that 79% of employees are interested in developing new skills or pursuing additional education. This number is up from 74% the previous year, representing a growing appetite for professional growth and a major opportunity for employers.

Employees who understand their growth potential within an organization are more likely to stay and contribute meaningfully. Upskilling and reskilling not only keep employees engaged but also help organizations fill critical roles internally, reduce hiring costs, and maintain a competitive edge.

Download the full report to discover how leading employers are building a resilient, future-ready workforce.

How AI is Accelerating the Skills Gap

If you’re wondering where to start, here’s some insight: AI is redefining what skills are needed in the workplace, and not just how to use AI.

As AI continues to reshape how work gets done, employees are very aware and feeling the squeeze. 42% of American workers expect AI to drastically impact their role within the next year, but 34% feel unprepared for those changes. And this concern isn’t only impacting the younger workers; it spans across workers of all generations.

In other words, AI isn’t just a tech trend but proof that upskilling with education benefits are now business-critical. This shift is accelerating the demand for future-ready skills in data literacy, critical thinking, adaptability, and cross-functional collaboration. Without structured development pathways, employees may be afraid to move or fall behind and cling even tighter to their current roles.

A Scalable Solution for Workforce Growth with EdAssist

The question isn’t whether AI matters. It’s whether your workforce will stay and grow with you. Education benefits have never been more vital than ever to your workforce strategy. And if your organization already offers a strategic program through a provider like EdAssist, you’re one step ahead.

EdAssist enables companies to tap into the potential of longer-tenure employees, the very individuals most likely to job hug. Through tuition assistance, strategic learning partnerships, and skill-aligned education programs, EdAssist helps employers:

• Re-engage disengaged employees by making upskilling practical, job-relevant, and available to all with comprehensive education benefits.

• Close critical skills gaps by offering debt-conscious education benefits and student loan support.
• Build internal mobility pipelines with clear, accessible career pathways to skills and growth.

If you’re facing job hugging in your workforce, upskilling from within becomes essential to future-proofing your workforce.

Ready to Design a Future-Ready Workforce?

Job hugging may be quiet, but its impact is loud. Employers who proactively invest in career development and upskilling strategies are more likely to re-engage disengaged employees, drive performance, and stay competitive in an AI-driven world.

Download the 2025 Education Index to learn how leading employers are using this new urgent AI driven skills mandate to upskill and reskill their workforce, turning education benefits into a strategic tool for growth and future-proofing.

Or get in touch to explore how EdAssist can help you build a best-in-class education benefits program that strengthens retention and closes critical skills gaps.