Global employee engagement has fallen for a second straight year, according to Gallup’s latest workplace data. The drop puts renewed pressure on leaders who are already managing AI rollouts, return-to-office mandates, and tighter budgets.
The data that got my attention
Gallup’s State of the Global Workplace 2026 report, released this year, finds that global employee engagement fell to 20% in 2025. That is the lowest reading since 2020 and the first consecutive annual decline since Gallup began tracking the measure.
What stands out more than the headline is where the decline is concentrated. Manager engagement dropped from 31% in 2022 to 22% in 2025, including a five-point fall between 2024 and 2025. The group that has historically led engagement is now nearly as disengaged as the people they manage.
Why this matters now
Organizations are investing in AI adoption, return-to-office programs, and transformation initiatives at the same time they are asking managers to do more with less support. The problem is that managers are the transmission system for every one of these programs. When manager capacity breaks, the rest of the strategy does not travel.
Gallup estimates the economic cost at about $10 trillion in lost productivity, roughly 9% of global GDP. The bigger risk for individual companies is that disengagement compounds: a burned-out manager passes stress to a team, the team underperforms, and leaders respond with more pressure instead of more support.
What the research actually shows
The table below summarizes the key 2025 figures from Gallup’s latest report.
| Indicator | 2025 result |
|---|---|
| Global employee engagement | 20% in 2025 — lowest since 2020 |
| U.S. employee engagement | 31% in 2025; 17% actively disengaged |
| Manager engagement | 22% in 2025, down from 31% in 2022 |
| Best-practice organizations | 79% of managers engaged |
| Manager impact | Managers account for 70% of team engagement variance |
| Economic cost | $10 trillion in lost productivity |
The contrast between the global average and best-practice organizations is the most important number in the report. In companies Gallup classifies as best-practice, 79% of managers are engaged — nearly four times the global average. That gap proves the decline is not inevitable. It is a design problem.
About 80% of the global workforce is now either not engaged or actively disengaged. Each percentage point in the global measure represents roughly 21 million employees, which means the drop from the 2022 peak of 23% reflects tens of millions of workers who are no longer fully invested in their work.
A practical framework for leaders
Fixing engagement requires changing the conditions around managers, not just running another survey. Leaders can use four practical steps.
- Measure manager capacity first. Before launching a new initiative, audit manager workload, span of control, and the share of time still spent on individual-contributor tasks. If managers are carrying two jobs, engagement programs will not stick.
- Restore the manager advantage. The historical gap between manager and individual-contributor engagement has collapsed from 11 points in 2022 to roughly three points today. Rebuild it by giving managers clearer authority, fewer competing priorities, and regular coaching.
- Target the not-engaged middle. The 64% of workers who are not actively disengaged but not engaged are the lowest-risk, highest-return group. Small changes in role clarity, feedback frequency, and development conversations can shift them toward full engagement.
- Build a per-manager budget case. A single disengaged employee costs an organization roughly 34% of their annual salary in lost productivity, turnover, and absenteeism. For a manager earning $120,000, that is about $40,800. For a team of eight with two disengaged members, the annual drag exceeds $80,000. Reducing that drag by even one-quarter pays for a focused development program.
- Sequence manager support before technology rollouts. Among U.S. organizations investing in AI, employees whose manager actively supports their team’s AI use are 8.7 times more likely to say AI has transformed how work gets done. That multiplier depends on manager capacity. A disengaged manager cannot champion tools they barely have time to learn, which means AI adoption itself becomes another casualty of manager burnout.
Best-practice organizations do not rely on a single program. They treat engagement as a long-term operating metric and build management practices around it. They also invest in manager development before rolling out technology, restructuring, or new performance expectations.
One related finding underscores the urgency. Among U.S. organizations investing in AI, employees whose manager actively supports their team’s AI use are 8.7 times more likely to say AI has transformed how work gets done. That multiplier depends entirely on manager capacity. A disengaged manager cannot champion tools they barely have time to learn, which means AI adoption itself becomes another casualty of the manager burnout problem.
The bottom line
Employee engagement is no longer a human-resources scorecard item. It is an economic variable tied directly to productivity, retention, and the success of every strategic initiative a company launches in the next 18 months. The 2025 data show that the collapse is managerial at its core. The organizations that stop the decline will be the ones that redesign the manager role before loading on more initiatives.
Where to go from here
Leadership teams need a clear diagnostic of where engagement is breaking before they launch another initiative. Start with a structured assessment of manager capacity, team engagement drivers, and the behavioral skills managers need most, then build a development plan that matches the actual data. team engagement diagnostic →
