By Yao Tang - Business Development Manager
In recent discussions with consulting firms in the U.S., one recurring theme has been job hugging: employees remaining in their current roles longer than usual, not necessarily due to engagement or satisfaction, but because external opportunities appear limited or uncertain.
From a Total Rewards standpoint, this trend carries several implications:
- Lower turnover may give an incomplete picture of workforce stability.
- Firms with slower salary progression or career advancement may face sharper attrition once mobility returns.
- Reviewing competitiveness now can prevent costly corrections later.
What Is “Job Hugging”?
Job hugging refers to employees choosing to stay put — often despite feeling underutilised or dissatisfied — rather than pursuing external opportunities. It represents a reversal of the “job hopping” behaviour that characterised much of the post-pandemic period.
Why It’s Emerging
Several factors are contributing to this shift:
- Economic uncertainty and layoff activity: Employees are more risk-averse and value job security.
- Perceived scarcity of external opportunities: A cooling labour market has reduced hiring across sectors.
- Relative comfort: If pay and benefits are broadly competitive, employees may see limited incentive to move.
Implications for Consulting Firms
1. Low Turnover Can Mask Underlying Risk
U.S. quit rates have fallen to around 2% per month (compared with roughly 3% during the peak of the “Great Resignation,” according to the Bureau of Labor Statistics). On the surface, this appears positive — but reduced movement may reflect caution rather than commitment.
When hiring activity picks up again, turnover could accelerate sharply, particularly among high performers who have postponed their next move.
Key point: Low attrition during periods of uncertainty should not be interpreted as loyalty. Job hugging is a temporary pause, not a sign of long-term satisfaction.
2. Slower Career and Pay Progression Amplify Future Attrition
Career growth remains a defining factor for consulting talent. If internal progression is noticeably slower than market norms — for example, where promotion steps take several years longer or salary growth at promotion is smaller — frustration can accumulate even during periods of low mobility.
When external opportunities re-emerge, those who feel “stuck” are often the first to leave.
Key point: Firms with below-market progression structures risk concentrated attrition once confidence returns to the labour market.
3. Proactive Benchmarking Reduces Future Costs
The last period of rapid mobility (2021–2022) showed how quickly pay structures can come under pressure. Firms that had not reviewed salary levels in advance often needed substantial market corrections to retain staff.
Regular benchmarking helps identify misalignments early and allows for phased, measured adjustments — avoiding sudden, reactive pay increases later.
Key point: Periodic benchmarking is not simply about keeping pace; it’s about maintaining readiness when market dynamics change.
Staying Prepared
Vencon Research works with consulting firms across markets, using directly collected and regularly updated compensation data from entry level through senior roles. This provides firms with a clear view of how their salary structures compare today — and how they may need to evolve as market conditions shift.
Accurate benchmarking is ultimately about preparedness. Understanding where you stand now ensures you’re ready when job hugging transitions back into job hopping.
Vencon Research is the largest player in the field of consulting compensation metrics. Our client list includes 85 per cent of the world’s major management consulting firms and we have over 20 years of experience and data at our fingertips. To find out more about our benchmarking products and services, visit our website or get in touch with our team.