Labor & Employment Law Daily Wrap Up, REPORTS—Global employee engagement falls to lowest level since 2020, Gallup finds, (Aug 10, 2026)

By WK Editorial Staff

Gallup's 2026 workplace report finds declining employee engagement, improving wellbeing, and widening concerns about management effectiveness.

Employee engagement around the world declined for a second consecutive year in 2025, reaching its lowest level since the height of the COVID-19 pandemic, according to Gallup's newly released State of the Global Workplace 2026 report. The findings suggest employers are facing growing challenges maintaining workforce engagement, particularly among managers, even as worker wellbeing shows modest signs of improvement.

Gallup's annual report, based on data collected in more than 140 countries and territories during 2025, found that only 20 percent of employees worldwide were engaged at work, down from 21 percent the previous year and 23 percent in 2023. The decline also marks the first time Gallup has recorded two consecutive years of falling engagement since it began tracking the metric globally.

The research comes as employers continue to navigate economic uncertainty, rapid technological change, evolving employee expectations, and increased adoption of artificial intelligence in the workplace. While many organizations have focused on efficiency and productivity initiatives over the past year, Gallup's data suggest employee connection to work remains under pressure.

Gallup reported that low engagement cost the world economy approximately $10 trillion in lost productivity, or 9 percent of global GDP. The workplace analytics company has long argued that employee engagement serves as a leading indicator of organizational performance, affecting profitability, retention, customer service, and productivity.

Manager engagement drives much of the decline. One of the most notable findings in the report is the deterioration in manager engagement, which Gallup identified as a primary reason for the overall global decline.

Managers traditionally report higher engagement levels than individual contributors, but Gallup found that engagement among supervisors has weakened significantly over the past two years. The company concluded that lower manager engagement accounts for most of the recent downturn in overall workplace engagement.

Most workers remain disengaged. Despite years of focus on employee experience and workplace culture initiatives, Gallup found that a substantial majority of workers remain either disengaged or actively disengaged.

According to the report, 64 percent of employees worldwide are classified as not engaged, while an additional 16 percent are considered actively disengaged. Only one in five employees falls into the engaged category.

Wellbeing improves slightly. The report was not entirely negative. Gallup found that employee wellbeing improved modestly in 2025, marking the first increase in three years.

Globally, 34 percent of employees reported that they were thriving, compared with 33 percent the previous year. Meanwhile, 56 percent of workers classified themselves as struggling and 9 percent reported they were suffering.

North America continues to lead engagement rankings. The United States and Canada recorded the highest regional engagement rate in the world at 31 percent, significantly above the global average of 20 percent. Latin America and the Caribbean followed closely at 30 percent, while Europe reported the lowest engagement level at 12 percent.

Gallup also found notable differences based on work arrangements. Employees working exclusively remotely reported the highest engagement levels at 30 percent, followed by hybrid workers at 25 percent. Employees whose jobs required on-site work and could not be performed remotely reported the lowest engagement levels at 17 percent.

Workers feel better about the job market. Gallup's report also found improving perceptions of labor market opportunities.

Globally, 52 percent of employees said it was a good time to find a job where they live, an indication that confidence in labor market conditions improved during 2025. Nevertheless, Gallup noted that job-market perceptions remain below their peak levels recorded before recent economic disruptions.

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