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Imagine a game of musical chairs. Except there are 12 chairs and 100 people.
That’s what the job market is like right now, says Mandi Woodruff-Santos, a career coach and host of the “Brown Ambition” podcast.
“There’s not a lot of meat on the bone,” she says.
That’s why right now, many people who do have jobs are holding on to them for dear life, a concept that management consulting firm Korn Ferry called “job hugging” last month.
So many people are talking and writing about the term that “job hugging” is trending on Google.
It resonates. Are you hugging your current job right now? Maybe you feel stuck. Maybe you’re not able to gain the skills you want. Maybe you’d like a new position with new challenges or more money, but …
In July, the number of job openings (7.2 million), the number of new hires (5.3 million) and the number of people quitting jobs (3.2 million) were all pretty much unchanged, according to the latest numbers from the Bureau of Labor Statistics.
Insert melting emoji.
“Unlike a few years ago, during the ‘Great Reshuffling,’ you just can’t leave your current job and effortlessly land in a better one,” says Elizabeth Renter, BW’s senior economist.
Uncertainty about the economy, largely driven by changing policy, is causing employers to hold back on hiring, she says.
“For workers, staying put feels much safer than joining the ranks of those seeking a better job among few job openings,” Renter says.
Jesse Wideman, a certified financial planner based in Charlotte, NC, says a few years ago he had a lot of clients, particularly in the tech industry, who job-hopped to get more money. Now though?
“There’s a lot more fear around job security,” says Wideman, who works for Zenith Wealth Partners.
He gets it. He says he’s gone through job loss, and he’s had both friends and clients go through job losses, too.
“They were out of work much longer than they thought,” he says. “Then, once they get in a new job, they don’t say, ‘I plan to be here a year or two.’”
They stay parked right where they are. Why? Because people are afraid to go through another job loss and think, “let me make sure I don’t have another five or six months where I don’t have enough money for it to be feasible to feed me and/or my family,” he says.
Job hugging does have benefits. Literally.
If your job provides your health care and you have people relying on you, that’s a strong case for staying put, says Woodruff-Santos, who has the nickname, “the Queen of Quitting” because she’s quit jobs to get more money and coached women of color to do the same.
Staying in your role means you and your financial planner, if you have one, have an idea of what your projected income and retirement look like, Wideman says. You know what’s in your 401(k) and what your company will match.
Believe it or not, some companies still have pensions, he says. If you leave, that’s money you may be leaving on the table.
Wideman says he’s seen emergency funds getting beefier. Instead of the traditional amount — enough money to cover three to six months’ worth of living expenses — he’s seeing more people want a reserve of six months or more.
Either they’ve been laid off before, or they want a cushion in case life starts life-ing and that job they’re hugging cuts them loose.
He recommends his clients put this cash in a high-yield savings account, primarily because of the liquidity that many of them offer.
There are tradeoffs, of course. If you’re putting more money in your emergency fund, that means less money for other things — a down payment on a house, a wedding, your retirement or your brokerage fund.
It just depends on your priorities. Also, how strong your fear is.
And when opportunity knocks, bet on yourself
If clients aren’t happy in their role and something better does come along, Wideman says he works with them to help them evaluate where they are and what their financial plan looks like if they stay or if they go.
Those discussions definitely come up less these days, Wideman says. But they still do come up.
Woodruff-Santos says if you’re hanging onto a job that seems secure and you get a rare opportunity to jump ship, but you’re scared of moving because of a possible last-in, first-out layoff, what does that mean for future you?
“It’s very comfortable to think ‘stay put.’ It’s the safe route,” Woodruff-Santos says. It’s worth considering: while you’re hugging your job, it’s not hugging you back. How much more could you have saved, advanced, paid off, or invested if you took that leap instead?
“There’s a risk, but also a potential reward,” she explains. “What if things actually work out? Because many times, they do.”
Woodruff-Santos, who specializes in working with women of color, emphasizes that a job is just one source of income. She advises her clients to always update their resumes and networks and not rely on one job being permanent.
“If you cling to your job blindly, that could be the biggest mistake of all,” she warns.