If you’re hiring right now, it might feel like the market has finally slowed down; attrition is down, roles are attracting strong application volumes, teams look stable on paper…

However, beneath the surface, a different story is playing out. Instead of loyalty or engagement, these choices are likely to be shaped more by market uncertainty, caution, fatigue, and financial pressure.

Enter ‘job hugging’. Coined last year on TikTok, it isn’t a trend that exists in isolation. Closely intertwined with other deeper issues shaping the workforce right now, it’s created one of the biggest blind spots employers face heading into 2026.

Staying doesn’t mean thriving

A Talent survey of over 1,800 professionals paints a confronting picture of how people are actually feeling at work.

Only 1 in 8 corporate workers describe themselves as genuinely happy in their role. And nearly two-thirds (68%) say they feel burnt out, stuck or unhappy — often driven by a combination of cost-of-living pressure and a difficult job market.

This employee dissatisfaction is also more widespread than most realise.

More than three-quarters (76%) of workers say they’ve felt close to burnout in the past six months. And over half perceive their workplace culture as either “toxic” or “declining”, while a minority of 15% believe their culture is genuinely thriving.

While many are staying, it’s no direct indication to engagement.

Burnout shows up long before resignations do

Signs of burnout appear much earlier in reduced engagement, lower discretionary effort, and declining performance. And when workers talk about cultural decline, they consistently point first to high turnover and low morale, followed by poor communication and lack of recognition.

By the time people reach burnout or leave, the damage has already been done.

Instead of a downstream people issue to be addressed after attrition spikes, signs of burnout and disengagement should be treated as early leading indicators of risk.

The false comfort of low attrition

Job hugging and burnout together can create a false sense of security for employers.

When people aren’t moving, it’s easy to assume they’re settled and engage. But, in reality, many are simply waiting. In our survey, 7 in 10 workers say they would leave their role if they could, while 65% report staying put due to financial constraints rather than commitment.

Confidence in employers and business leaders is also fragile. Over two-thirds of workers don’t believe their employer would fight to keep them if they resigned, and the disconnect suggests many employees don’t feel valued or invested in.

As Matthew Munson, Managing Director at Talent Sydney, has observed:

“People aren’t moving, but that doesn’t mean they’re engaged or confident about staying long term. That creates a real blind spot for employers who assume low attrition means low risk.”

When confidence returns — and history tells us it always does — all this pent-up movement can be swift and disruptive.

Why salary alone won’t fix this

While it’s tempting to respond to disengagement with pay adjustments or short-term incentives, data suggests this is a problem that runs deeper.

Among the small group of workers who say they are happy, that happiness consistently comes with conditions: flexibility, supportive managers, autonomy, and trust. For some, it means working for themselves. Across ANZ, LinkedIn data shows a 43% 12-month increase in self-employment, a pattern historically linked to periods of market uncertainty and constrained job mobility.

This is less about perks or surface-level engagement initiatives and about how work is experienced day to day.

As Tom Mackintosh, Managing Director at Solve by Talent, puts it:

“There’s often a lot of focus on fixing talent acquisition when engagement drops, but that usually just exposes the real issue. In many cases, it comes back to leadership capability and whether organisations are genuinely invested in learning, internal mobility, and long-term career growth.”

The compounding risk for 2026

Heading into 2026, the risk isn’t that people are leaving in droves but that many organisations are mistaking their people’s endurance as engagement.

Burnout suppresses productivity and job hugging suppresses mobility. Together, they delay the warning signs leaders would normally rely on — until the market shifts and attrition accelerates all at once.

In our latest More Than Money Salary Guide, we identified confidence, culture and leadership capability as core elements of the broader Capability Gap as direct influences to how resilient an organisation will be when conditions change.

What employers should be doing now

The organisations best positioned for the next cycle aren’t waiting for confidence to return before acting.

Instead, they are:

• Investing in leadership capability and workload sustainability
• Creating visible development and internal mobility pathways
• Treating engagement as a strategic risk indicator, not an HR metric
• Strengthening EVP before competition intensifies again

Because when the market turns, the difference between stability and resilience will be clear.

To explore how confidence, burnout and capability gaps are shaping the year ahead — including regional insights and emerging trends explore the full More Than Money Salary Guide, and dive deeper into The Capability Gap and Key Trends driving hiring decisions in 2026.