Global employee engagement fell to 20% in 2025, its lowest level since 2020, according to Gallup’s 2026 State of the Global Workplace report released in April. The decline cost the world economy approximately $10 trillion in lost productivity, representing roughly 9% of global GDP.
This marks the second consecutive year of decline — the first time Gallup has ever recorded two consecutive drops in its history of measurement. Engagement peaked at 23% in 2022 before sliding to 21% in 2024, then to 20% in 2025.
Managers bear the primary responsibility for the deterioration. According to Gallup research, managers account for at least 70% of the variance in team-level engagement, making them the single biggest influence on how teams perform. When managers struggle, their teams struggle — and current data shows widespread manager burnout across organizations.
The decline reflects layoffs, AI disruption, manager burnout, and personal stress that traditional engagement efforts haven’t addressed, according to analysis by Metaintro. A March 2026 report from Exectras identified manager burnout as Gallup’s top factor, noting that managers face overload from artificial intelligence adoption, restructurings, return-to-office mandates, and economic uncertainty.
In the United States specifically, employee engagement stands at 31% in 2025 — unchanged from 2024 but down from a 2020 peak of 36%. Younger workers have driven much of the global decline, with Generation Z and millennials citing lack of role clarity and feeling undervalued as primary reasons for disengagement.
The $10 trillion cost figure underscores the stakes. When engagement is low, organizations lose productivity, face higher turnover, and struggle with profitability. Gallup’s research shows that organizations with highly engaged teams see 23% higher profitability, up to 18% higher productivity, and 51% less turnover — making the current engagement crisis a direct threat to organizational performance worldwide.
The pattern mirrors earlier downturns. When engagement last declined significantly in 2020, the ratio of engaged to disengaged employees narrowed from 2.6 engaged per 1 disengaged in 2020 to 1.9 engaged per 1 disengaged by 2022. The current slide suggests that ratio has tightened further, with only 20% actively engaged globally and 64% not engaged, while 16% are actively disengaged.
Fixing the problem requires organizations to focus on manager effectiveness, according to Gallup. Managers who create clarity around expectations, provide regular recognition, and share ongoing feedback create conditions where employees feel valued and connected to their work. With managers driving 70% of engagement variance, improving manager support and development has become the single highest-leverage intervention organizations can make.
Sources
- Gallup — State of the Global Workplace 2026 report; employee engagement at 20% in 2025, cost of $10 trillion, manager impact at 70% of variance
- Metaintro — Analysis of engagement decline drivers: layoffs, AI disruption, manager burnout, personal stress
- Exectras — March 2026 analysis identifying manager burnout as #1 factor and sources of manager overload
- Evolveup — Confirmation of $10 trillion annual cost as roughly 9% of global GDP
- Space Daily — Reporting on Gallup’s estimate of $10 trillion cost and engagement at lowest level since 2020
