In 2025, global employee engagement declined for the second year in row, as reported in Gallup’s annual State of the Global Workplace report, the world’s largest ongoing study of employee experience. This year’s report examines employee engagement trends, job market perceptions and employee wellbeing in 2025. Here are a few of the most important findings:
1. Global Workplace Engagement Declines to Lowest Level Since 2020
Since reaching its peak in 2022-2023, global employee engagement has been in decline. South Asia experienced the largest decline (down five percentage points), while no region of the world increased in engagement in the past year. Each percentage point loss of engagement represents approximately 21 million fewer engaged employees. This can have a serious impact on organizational revenue and economic growth. Last year, low engagement cost the world economy approximately $10 trillion in lost employee productivity, or 9% of GDP.
2. Engagement Decline Most Acute Among Managers
Lower engagement among managers accounts for much of the recent downturn in employee engagement since 2023. Managers typically experience an “engagement premium” of consistently higher levels of engagement compared to individual contributors. But increasingly, managers’ engagement levels are getting much closer to those they lead.
In South Asia, manager engagement declined by eight points in 2025, far more than any other region. Organizational flattening may be a factor. The same survey found that the percentage of workers who are managers in South Asia also declined in 2025, suggesting employers are cutting management roles. Recent Gallup research on team size finds that manager engagement can decline with larger spans of control, which may explain the drop in manager engagement in South Asia. Organizational flattening should not just be a transaction. If done, it needs to consider manager and team engagement, as well as the scope of managers’ other responsibilities.
The engagement of managers is particularly important because managers are critical for AI adoption. A separate Gallup U.S. workforce survey in Q1 of 2026 found that the strongest predictor of whether employees use AI, aside from technical integration, is whether an employee's direct manager actively champions it.
3. Employee Sentiment About the Job Market Improved in 2025, Though Still Below the 2019 Peak
In 2025, employee job market perceptions improved globally. This increase came entirely from non-remote-capable, fully on-site workers, whose perception of the job market rose two points. Job market optimism declined for fully remote workers (down five points) and remote-capable, fully on-site workers (down 14 points). There was no change for hybrid workers. The decline in optimism was likely due to changed employer policies or the automation of knowledge work.
Counter to the global trend, two regions experienced steep drops in job market optimism in 2025: U.S./Canada (down 10 points) and Australia/New Zealand (down 12 points). In the first few years after the height of the pandemic (from 2022 to 2024), Australia/New Zealand ranked No. 1 among global regions in employee job market perceptions. But given a sharp decline in job market optimism over the past year, it now ranks second, behind Southeast Asia. The U.S./Canada region is now second-to-last in regional job rankings, having fallen 23 points since 2019.
U.S. business media reported on a “no hire, no fire” job climate for most of 2025. More recent revisions to official jobs numbers found that the U.S. added 181,000 jobs last year, compared with 1.5 million in 2024. Gallup’s U.S. employee job market survey tracks official jobs data closely.
Many are wondering how AI is likely to affect the future of the job market. Gallup’s U.S. workforce survey from Q1 of 2026 finds that the perceived likelihood of job elimination due to AI is rising: 18% of U.S. employees say it is somewhat or very likely their job will be eliminated in the next five years due to technological innovations such as automation or artificial intelligence, compared with 15% reporting so in the past two years. In organizations where employees report AI has been implemented, that figure rises to 23% reporting it is likely. In some industries, such as finance (32%), insurance (32%) and technology (31%), nearly a third of employees think it is somewhat likely or very likely their job will be eliminated in the next five years.
Takeaways
A decline in global engagement means employees are feeling more detached from their employers. That has consequences for productivity and growth; it also affects the ability of organizations to weather disruption and change, such as with AI.
A relatively robust job market globally (with the exception of declines in the U.S./Canada and Australia/New Zealand) adds to turnover risk as well. Disengaged employees are more likely to be looking for another job when job markets are good and come to work disconnected and unproductive when job markets are tight
Unfortunately, engagement is falling most among managers, who are often the primary way employees experience their employer. But global trends are not destiny. Some organizations engage their managers at four times the global average. Leaders looking to compete in an uncertain market environment should strengthen their core: Prioritize manager selection, training and support.
Act now to strengthen engagement where it matters most.
- Explore Gallup’s State of the Global Workplace findings to understand workplace trends worldwide.
- Learn how to start improving employee engagement now with proven, research-backed strategies.
- Discover how Gallup works with organizations worldwide to develop effective engagement strategies.
