Employee engagement across the globe has dropped to its lowest level since 2020, with just 20% of workers actively engaged in 2025, according to new data from Gallup.
The decline marks a second consecutive year of erosion and carries a staggering economic cost – more than $10 trillion in lost productivity, or roughly 9% of global GDP. Engagement sinks to 20%, driven by declining manager morale, as Europe remains the least engaged and North America weakens.
At the centre of the downturn is a critical and often overlooked issue – manager disengagement.
LEADERSHIP CAPABILITY
Since 2022, engagement among managers has fallen by nine percentage points, while engagement among individual contributors has remained largely stable. “This report establishes a global baseline for management effectiveness in the AI era,” says Gallup CEO Jon Clifton. “Businesses are investing heavily in AI, but the results are not showing up in the bottom line. Gallup’s data points to an answer the corporate world has largely ignored: the manager.”
The findings point to a widening disconnect between technology investment and human leadership capability, reinforcing a growing body of research that shows engagement is fundamentally driven by day-to-day management quality.
That aligns with broader workplace trends highlighted by Employee Appreciation Day: Why Only ¼ of Workers Feel Valued at Work, which found that only one in four employees feel truly valued, despite recognition being a key driver of engagement, retention and performance.
EUROPE – LEAST ENGAGED REGION
Europe remains the least engaged region globally for the sixth consecutive year, with just 12% of employees engaged.
Engagement levels remain in single digits across several major economies, including France, Poland, Switzerland and the United Kingdom. Even Germany has seen engagement fall to near historic lows.
Yet the region presents a paradox. A record 57% of European workers say it is a good time to find a job, suggesting that while employees may feel disengaged in their current roles, they remain confident in external opportunities – a dynamic that could accelerate workforce churn.
At the same time, Europe outperforms globally on wellbeing, with 49% of employees classified as thriving, well above the global average.
NORTH AMERICA SHOWING SIGNS OF STRAIN
The US and Canada continue to report the highest engagement globally at 31%, but the region is showing signs of strain.
Job market optimism has dropped sharply, with fewer than half of workers believing it is a good time to find a job — near historic lows. Meanwhile, employee wellbeing has declined to 51% thriving, the lowest level recorded for the region.
The contrast is striking: high engagement, but falling confidence and wellbeing.
WORKPLACE WELLBEING
Globally, employee wellbeing has improved slightly, with 34% of workers now considered thriving, marking the first increase in three years.
However, emotional strain remains elevated. Reports of daily stress, anger and sadness continue to exceed pre-pandemic levels, particularly among leaders, who report higher engagement but also greater emotional burden.
These pressures are compounded by broader workplace challenges, including burnout and lack of recognition. Research continues to show that poor wellbeing directly impacts productivity and engagement, reinforcing the economic cost of disengagement.
HOW LEADERS CAN REENGAGE WORKERS
The data points to a clear conclusion: reversing global disengagement requires a leadership reset, not just more technology or perks.
1. Make recognition a daily practice
Recognition remains one of the most powerful – and underused – drivers of engagement. Employees who feel valued are significantly more likely to be productive and committed.
2. Rebuild manager capability
Managers must be equipped not just to manage tasks, but to coach, motivate and connect with people. Without this shift, engagement will continue to erode from the middle out.
3. Address burnout at its source
Manager disengagement is often a symptom of overload. Leaders need realistic expectations, support systems and wellbeing strategies to remain effective.
4. Create meaning and purpose
Employees are more engaged when they understand how their work contributes to a bigger picture. Clear communication of purpose is essential to rebuilding connection.
5. Listen continuously
Organizations that rely solely on annual surveys risk missing early warning signs. Continuous listening strategies allow leaders to identify and act on disengagement in real time.
6. Balance AI with human leadership
While AI can improve efficiency, it cannot replace trust, empathy and human connection – the foundations of engagement. Leaders must ensure technology enhances, rather than replaces, these elements.
DEFINING FUTURE OF WORK
The latest findings mark a critical inflection point. Engagement is falling. Productivity losses are mounting. And the gap between investment in technology and investment in people is widening.
But the solution is increasingly clear. The organisations that succeed in the next era of work will not be those that invest most heavily in AI, but those that invest most effectively in their managers and culture.
Check out the full report here.
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