Australian workers are staying put in jobs they don’t enjoy as economic uncertainty fuels a new trend dubbed “job hugging”.
A report by recruitment agency people2people, drawing on its own research as well as national labour market data and LinkedIn’s Jobs on the Rise 2026 report, says the workforce is heading for a “decisive reset” this year.
Stability and financial security are overtaking flexibility and freedom as workers’ top priorities.
“We’re seeing a clear workforce reset in 2026,” people2people head of HR solutions Suhini Wijayasinghe said.
“Job security and financial confidence have overtaken flexibility as the top priorities, and that shift is fundamentally changing how and when people are willing to move roles.”
Hugging not hopping
After several years in which workers felt empowered to switch jobs in search of better pay and flexible conditions (‘job hopping’), global economic headwinds are now pushing many to stay where they are.
The report describes this as ‘job hugging’ – employees clinging to their current roles despite feeling unhappy or disengaged because they fear the risks of moving.
Three in five workers say they are unlikely to apply for a new job this year due to global economic uncertainty.
The trend is even more pronounced among younger employees, with nearly half of Millennials and Gen Z workers planning to delay any job search.
Priorities are also shifting.
Almost 45 per cent of surveyed workers said a pay rise now matters most in helping them feel financially secure, followed by earning a side income and job stability.
Fewer than one in 10 nominated flexibility as their top workplace priority.
That marks a sharp turnaround from recent years, when many workers said they would quit rather than give up the ability to work from home at least part of the week.
Flexible work is still important, however.
Two in five workers said they do not want to return to the office full-time, and three in 10 said they would quit if forced back on a full-time basis.
A cooling job market may also be reinforcing caution, with online job ads down more than 7 per cent nationally over the past year.
AI impacting everything
Artificial intelligence is adding another layer of uncertainty. Nearly four in 10 workers said they are worried about AI’s impact on their job.
Concern is highest among Millennials and Gen Z, at 50 per cent, compared with just over a third of Baby Boomers and 29 per cent of Gen X.
At the same time, AI is driving demand for new roles.
LinkedIn data shows the fastest-growing jobs include AI engineers, chief risk officers, mechanical engineers, directors of AI and organisational development managers.
“Demand in 2026 is very clearly centred on AI, risk, leadership and professional services roles,” Wijayasinghe said.
“These aren’t experimental hires – they’re mission-critical positions that help organisations manage uncertainty and drive growth.
“The organisations that win in 2026 will be those that balance caution with clarity – investing in future-ready skills, offering realistic flexibility and being transparent about career pathways in an uncertain market.”
