Job hugging is rising, but that doesn't mean your team is committed

Small business owners and HR leaders often treat retention as a success metric. Fewer resignations and stable headcount usually signal things are working. MetLife’s 2026 Employee Benefit Trends Study challenges that assumption, showing that strong retention can hide declining engagement and performance.

According to the study, 77% of employees plan to stay with their current employer. However, 56% say they are staying out of necessity, not commitment. This trend, known as job hugging, signals risk rather than loyalty.

Retention without commitment comes at a cost

Only 18% of employees report staying because they genuinely want to. That gap has real consequences:

• Just 50% of necessity-driven employees are engaged
• They are 54% less likely to be holistically healthy
• They are more prone to absenteeism and lower productivity

For small teams, this shows up quickly. Lower engagement leads to missed deadlines, inconsistent output, and increased management effort.

As MetLife’s Todd Katz notes, retention can create a false sense of stability while engagement and productivity decline.

Why employees are staying

The drivers are practical. Financial confidence is at its lowest level since 2012, and 31% of employees say the job market feels too uncertain to leave.

Employees are choosing security over opportunity. For employers, that means retention is shaped more by external pressure than workplace experience.

You may see fewer resignations, but also less initiative and discretionary effort.

Connection is the differentiator 

The study highlights connection as the strongest driver of engagement, wellbeing, and true retention. Employees who feel seen and supported are:

• Three times more likely to be healthy
• Twice as likely to be engaged
• Three times more likely to stay by choice

For small businesses, this is a key advantage. Connection is built through everyday interactions, not large budgets.

What this means for small business HR 

Retention alone is no longer enough. You need to understand why employees are staying.

Key questions to ask:

• Are employees choosing to stay or feeling stuck?
• Are engagement and wellbeing improving or flat?
• Are managers building connection or just managing output?

Connection grows when employees feel belonging, receive growth support, and are recognized.

The pressure is on leadership, not perks 

Adding perks is not a complete solution. Benefits only matter when they are relevant and clearly communicated.

For small businesses, focus on alignment over volume. The right benefits, paired with consistent leadership behaviors like recognition and support, have a stronger impact than adding more programs.

A more honest view of retention 

Job hugging reframes how to evaluate workforce stability. A team that stays is not automatically a healthy one.

Retention should be measured alongside engagement, wellbeing, and connection. If those are lagging, retention may be masking a deeper issue.

The goal is not just to retain employees, but to build a team that chooses to stay and performs at a high level. According to MetLife, connection is what drives that outcome.