The data that got my attention
Gallup’s 2026 State of the Global Workplace report finds that global employee engagement fell to 20% in 2025. That is the lowest reading since 2020 and the first time engagement has declined for two consecutive years. The same study estimates that low engagement cost the world economy about $10 trillion in lost productivity, roughly 9% of global GDP.
The more striking number is manager engagement. It dropped from 27% in 2024 to 22% in 2025, a five-point decline in a single year. Managers used to carry an engagement premium over the people they lead. Now they are only as engaged as everyone else.
Why this matters now
Most executives treat engagement as a lagging indicator of culture or compensation. The 2026 data suggest it is better understood as a leading indicator of management quality. Lower engagement among managers accounts for most of the recent downturn across the workforce. Individual contributor engagement actually rebounded slightly.
This is happening while organizations are flattening structures, expanding manager spans of control, and accelerating AI adoption. South Asia saw an eight-point drop in manager engagement in 2025, coinciding with cuts to mid-level and senior management roles. The pattern points to a management capacity problem, not a motivation problem.
The cost shows up quietly at first. Gallup’s meta-analyses consistently link disengagement to lower profitability, sales, and productivity at the business-unit level. A one-thousand-person company with average engagement can lose roughly $3.4 million per year in turnover, absenteeism, and lost output. For larger organizations, the drag is measured in tens of millions.
What the research actually shows
The headline figure is sobering: only one in five employees worldwide is engaged at work. Regionally, no part of the world improved engagement in the past year. South Asia fell the most, down five points overall. The United States and Canada region now ranks near the bottom in job market optimism, falling from 70% in 2019 to 47% in 2025.
Yet the same report shows that best-practice organizations achieve 79% manager engagement, nearly four times the global average. These organizations exist across regions and industries. The variable is not geography or sector. It is how organizations select, develop, and support their managers.
AI adds another layer. In organizations that have begun implementing AI, 18% of U.S. employees say it is likely their job will be eliminated within five years due to automation or AI. In finance, insurance, and technology that fear climbs above 30%. Frequent AI use is far higher when managers actively support it. Among employees whose manager supports AI use, 79% report frequent use. Among those whose manager does not, the figure is 46%. But less than one-third of employees in AI-adopting organizations say their manager actively supports their team’s use of the technology.
| Indicator | 2024 | 2025 | Change |
|---|---|---|---|
| Global employee engagement | 21% | 20% | -1 point |
| Manager engagement | 27% | 22% | -5 points |
| Non-manager engagement | 18% | 19% | +1 point |
| Global thriving rate | 33% | 34% | +1 point |
| Job market optimism | 51% | 52% | +1 point |
| Best-practice manager engagement | n/a | 79% | nearly 4x global average |
A practical framework for leaders
The gap between the global average and best-practice organizations is not a budget gap. It is a discipline gap. Leaders who want to reverse the decline should focus on four levers:
- Select managers for talent, not tenure. Gallup’s longstanding finding is that only about one in three people has the natural talent to manage others. Promoting strong individual contributors without screening for management talent is the single most common cause of low engagement.
- Reduce manager span of control. Gallup’s recent U.S. study found that manager engagement declines as team size grows. Larger spans reduce coaching quality, feedback frequency, and the manager’s own sense of progress.
- Make manager-led AI adoption explicit. Employees use AI far more consistently when their manager supports it. Organizations should treat AI support as a management behavior, not an IT rollout.
- Protect manager wellbeing. Leaders report higher rates of stress, anger, sadness, and loneliness than individual contributors. Engaged managers, however, report fewer negative emotions and are 14 points more likely to be thriving than the average leader.
The bottom line
The 2025 engagement collapse is managerial. Global economic conditions did not force it. A generation of under-supported managers allowed it. The organizations that protect and develop their managers are the same ones that sustain engagement while competitors drift lower. The playbook is not complicated, but it requires treating management as a business system rather than a job title.
Where to go from here
If your organization’s engagement numbers are flat or falling, start with the managers who carry them. Run a team engagement diagnostic →
