Low employee engagement worldwide cost the global economy approximately $10 trillion in lost productivity in 2025. The figure represented about 9% of global gross domestic product (GDP). According to a study carried out by Gallup, in 2025, only one in five (20%) employees across the world was engaged at work, meaning that four in five (80%) were not. Both 2024 and 2025 marked annual declines in employee engagement; last year’s level was the lowest since 2020.
Manager disengagement
The study found that the biggest declines were among managers. Their engagement dropped from 27% in 2024 to 22% in 2025, which is a five percentage-point drop in a single year. This is one of the steepest declines recorded among any employee group.
Managers are under increasing pressure to implement corporate changes, meet performance targets and deadlines, and support their employees at the same time. They act as a bridge between senior leadership and their team members. Therefore, their disengagement can spread rapidly throughout an organization.
What is employee engagement?
Employee engagement refers to your emotional commitment to work and your employer. If you love your company, care about its future, and are willing to work hard so that it succeeds in today’s fiercely competitive marketplace, you have high employee engagement.
Disengaged employees typically do the minimum required and are not interested in their employer’s performance. Engaged employees are generally more productive than their disengaged counterparts.
For example, let’s imagine we are interviewing John and Susan. They explain that when their company was struggling last year, they willingly accepted a 25% pay cut—everybody did. The subsequent lower payroll costs helped the company recover. This year it is thriving again. John and Susan are highly engaged employees.
Harry works in the same company as John and Susan. As soon as he heard that the company was struggling, he started looking for another job. Within three weeks he had left. Harry’s engagement was relatively low.
Why employee engagement matters
If employee engagement is low, productivity suffers, as do product quality and many other aspects of a company’s performance. If low employee engagement spreads across a whole country, economic growth may slow as businesses become less productive and competitive. Governments may also be affected by lower corporate tax revenues, which can limit their ability to fund public services and infrastructure projects, and deliver on their election promises.
Here is a list of the business implications of a decline in a company’s employee engagement:
Business implications – low employee engagement
- Lower productivity
- Lower profitability
- Higher turnover
- Higher absenteeism
- Lower customer satisfaction
- Lower customer loyalty
- More workplace accidents
- More quality defects
- More theft and inventory shrinkage
- Higher recruitment and training costs
- Lower employee wellbeing
- Reduced organizational performance
During the 1970s and 1980s, Japanese workers were highly committed to their employers. Japanese products became increasingly popular across the world. Companies like Toyota, Honda, Sony, and Sanyo became household names in Europe, America, and other parts of the world. As the country’s economy expanded, the standard of living of its citizens rose significantly.
What is the outlook?
Global employee engagement fell for two consecutive years. If it continues to fall in 2026, the downward trend will become even more pronounced. Engagement today is lower than just before the pandemic.
Growth in engagement took years to achieve—it did not rise overnight. According to Gallup, engagement rose from 12% in 2009 to 23% in 2023. Unfortunately, the figures for 2024 and 2025 fell to 21% and 20%, respectively.
Hopefully, the recent or current decline is a short-lived one. It would be a pity to lose all that improvement.
