Global employee engagement has fallen to 20% in 2025, its lowest level since 2020, according to Gallup’s 2026 State of the Global Workplace report. The decline is costing the world economy an estimated $10 trillion in lost productivity—roughly 9% of global GDP—and marks the first time engagement has dropped for two consecutive years.
The engagement crisis is being driven largely by a steep decline among managers, whose engagement has plummeted from 31% in 2022 to 22% in 2025. Between 2024 and 2025 alone, manager engagement fell five percentage points, from 27% to 22%, according to Gallup’s research.
Managers have traditionally enjoyed an “engagement premium” at work, but that advantage is eroding. According to the Gallup report, lower engagement among managers now accounts for most of the recent downturn in overall employee engagement, as individual contributor engagement has remained relatively stable at around 19%.
Burnout and Organizational Disruption Drive the Decline
The causes behind the engagement slump are multifaceted. A April 2026 report from DHR Global found that 52% of employees say burnout reduces engagement, up from 34% in 2025—a striking jump that reflects intensifying workplace stress. Manager burnout is particularly acute, with one analysis noting that 56% of managers report experiencing burnout.
Regional data suggests that artificial intelligence adoption and organizational restructuring are contributing factors. South Asia, primarily India, experienced the largest regional decline in manager engagement with an eight-point drop in 2025. The Gallup report notes that at the same time, the percentage of managers in South Asia also declined, suggesting employers are cutting management roles. Some evidence points to India’s IT sector experiencing substantial slowdowns in hiring and cuts to mid-level and senior roles, possibly driven in part by AI adoption.
Gallup research indicates that when manager spans of control grow larger—as they do when organizations flatten—manager engagement declines, though talent and training can offset this effect. The data also show that leaders experience substantially higher daily stress, anger, sadness and loneliness than individual contributors, even as they report higher overall life satisfaction and engagement.
A Path Forward for Organizations
Not all organizations are struggling. Within best-practice organizations that prioritize employee engagement as part of their long-term business strategy, 79% of managers were engaged in 2025—nearly quadruple the global average. These world-class workplaces span all regions and industries, demonstrating that high manager engagement is achievable regardless of company size or sector.
Gallup’s research on artificial intelligence adoption also offers insight: when managers actively support their teams’ use of AI, employees are 8.7 times more likely to agree that AI has transformed how work gets done in their organization. Yet less than a third of U.S. employees in organizations implementing AI strongly agree their manager actively supports the technology, suggesting a significant gap between organizational investment in AI and the human leadership required to make it effective.
The 2026 State of the Global Workplace report underscores that employee engagement is not merely a human resources metric—it directly correlates with business-unit productivity, profitability and sales. As organizations navigate AI adoption and economic uncertainty, the engagement of their managers may prove to be one of the most critical levers for maintaining productivity and retaining talent.
Sources
- Gallup — State of the Global Workplace 2026 report, including global engagement trends, manager engagement decline, regional data, and cost estimates
- DHR Global — April 2026 report on burnout’s impact on engagement
- Coachello AI — July 2026 analysis of manager engagement decline from 31% in 2022 to 22% in 2025
