Did you know? Global employee engagement has dropped from 23% to just 21%, according to Gallup—marking a troubling shift that’s costing the world an estimated $438 billion in lost productivity. Even more staggering, Gallup estimates that $9.6 trillion could be added to the global economy—roughly 9% of global GDP—if workplaces were fully engaged.

This isn’t just a workforce issue. It’s a leadership wake-up call.

In an era defined by flexibility, AI integration, and mental health awareness, employee engagement should be thriving. Instead, it’s plummeting. Let’s explore why—and what forward-thinking leaders can do about it.

---

Why Employee Engagement Is Declining

1. Leadership Hasn’t Kept Pace with Change

The world of work has changed dramatically—but leadership styles haven’t always evolved with it. Too many managers still operate under outdated, transactional models rather than people-centric ones.

• As DHR Global points out, “2025 leaders must be less about authority and more about authenticity, collaboration, and emotional intelligence.”

The modern employee expects more than a paycheck—they expect purpose, empathy, and visibility from their leaders. When that’s missing, so is motivation.

2. A Lack of Recognition and Belonging

Recognition is a basic human need—and a powerful business strategy.

Yet in Gallup’s findings, only one in three employees felt recognized in the past week. That’s a massive missed opportunity. When employees don’t feel seen or appreciated, they emotionally check out.

• Forbes confirms that recognition—especially when it’s personalized and peer-driven—can reduce turnover, increase engagement, and build stronger cultures.

Recognition isn’t about lavish awards; it’s about timing, authenticity, and relevance.

3. Work-Life Balance Is Still a Myth for Many

Even with the rise of hybrid work, burnout is at an all-time high. Employees may have gained flexibility, but they’ve also absorbed the unspoken expectation of being “always on”.

The result? Quiet quitting. Resenteeism. And eventually, the Great Resignation 2.0.

• Gallup data shows that employees who strongly agree their employer cares about their well-being are 69% less likely to actively search for a new job.

In short: well-being is not a benefit—it’s a baseline.

4. Career Growth Isn’t Clear

Lack of growth opportunities is one of the top reasons employees disengage and eventually leave.

Modern professionals crave development—not just promotions, but skill-building, mentorship, and career clarity. If they don’t see a future with you, they’ll go looking for one elsewhere.

• Forbes underscores the importance of leadership pathways, learning programs, and feedback loops in sustaining engagement.

Without clear career progression, ambition fades—and so does discretionary effort.

Ready to address engagement head-on?

Book a strategy call today to find out how our tailored training solutions can help.

What Engagement Actually Looks Like in 2025

Engagement isn’t a one-off initiative—it’s a sustained cultural mindset that thrives in environments where people feel seen, heard, and supported.

Signs of a Truly Engaged Workforce:

• Employees speak up with ideas or concerns
  
• Teams collaborate naturally and solve problems together
  
• Staff advocate for the brand—even off the clock
  
• Retention rates climb and absenteeism drops
  
• Productivity is high, but burnout is low

Engagement fuels everything from customer satisfaction to profitability. According to Gallup, companies in the top quartile of employee engagement experience:

• 81% lower absenteeism
  
• 18% higher productivity
  
• 23% higher profitability

Let’s talk about what’s holding your team back—and how to fix it. Book a quick discovery meeting with us.

---

Strategies to Reverse the Drop in Engagement

1. Prioritize Human-Centered Leadership

Swap command-and-control for coaching and conversation. Managers should be trained not just on processes—but on people skills.

How to start:

• Hold regular one-on-one check-ins that go beyond KPIs
  
• Equip managers with training in empathy, conflict resolution, and feedback
  
• Encourage upward feedback—leaders need coaching too

A Gallup study shows that 70% of the variance in team engagement is attributed to the manager. Let that stat guide your training priorities.

2. Make Recognition a Daily Ritual

Move beyond “Employee of the Month.” Build a culture of recognition into the daily flow of work.

Tactics that work:

• Peer-to-peer shout-outs via Slack or Microsoft Teams
  
• Spot bonuses for going above and beyond
  
• Personalized thank-you notes tied to company values

Recognition drives a sense of belonging and performance. It also reinforces what “great” looks like—making it a low-cost, high-impact engagement tool.

3. Redefine Career Growth

Employees don’t just want a job—they want momentum. Career development doesn’t always mean a promotion; it could mean a new skill, a mentor, or a project stretch.

Ideas to implement:

• Career pathing tools and quarterly growth discussions
  
• Learning stipends or internal upskilling programs
  
• Job shadowing or interdepartmental exchanges

When employees feel they’re growing, they’re far more likely to stay.

4. Embed Well-Being into the Workday

Wellness isn’t yoga at lunch. It’s the daily practices, policies, and manager support that create psychological safety and prevent burnout.

What leading companies are doing:

• Encouraging mental health days without stigma
  
• Setting communication boundaries after hours
  
• Offering counseling, coaching, or wellness app subscriptions

Forbes contributor Tracy Brower notes that companies who normalize work-life boundaries outperform their competitors in retention and morale.

5. Listen Loudly—and Act on It

It’s not enough to run a pulse survey and call it a day. Engagement requires active listening and agile response.

Pro tips:

• Share results from engagement surveys—and what you’re doing with the feedback
  
• Create a “You Said, We Did” campaign to build trust
  
• Involve employees in solution building

People support what they help create. When they see their voice leading to action, commitment follows.

Empowering Leaders to Drive Engagement from the Frontlines

Here’s the truth: managers are your engagement engine. But without support, even great managers burn out.

At Ultimate Image Coach & Academy, we’ve seen a huge surge in requests for soft skills training—especially emotional intelligence, adaptive communication, and resilient leadership.

Companies that invest in these skills are seeing faster recovery in engagement—and positioning themselves for long-term success.

Don’t wait for another engagement survey to show you’re losing people.

Email us today or book a leadership strategy call to discuss customized training options that empower your leaders to create lasting engagement.

How Companies Can Support Their Leaders

1. Leadership Development That Goes Beyond the Basics

Don’t stop at “how to give feedback.” Train leaders in emotional intelligence, conflict resolution, coaching, and change management—the real drivers of team trust and performance.

2. Peer Circles and Leadership Mentoring

Leadership is lonely. Creating peer support circles or mentor-matching programs allows managers to share challenges, swap strategies, and build resilience together.

3. Real-Time Data, Not Just Annual Reviews

Give managers access to live engagement dashboards and pulse surveys—so they can act on feedback before it turns into burnout or attrition.

4. Normalize Well-Being for Leaders Too

Managers are often caught between exec pressure and frontline fatigue. Offering mental health support, protected focus time, and coaching for the leaders themselves helps them show up as their best selves for others.

Summary: Engagement Is a Choice—One Leaders Must Make Daily

Engagement is down—but it’s not gone. And it’s not something HR can fix with a quarterly pizza party.

To reverse the trend, organizations must rethink leadership, recognition, development, and culture from the inside out. Employees are raising their expectations—and only companies willing to grow with them will thrive in this next era of work.

Your Turn: What Will You Do Differently This Week?

Engagement isn’t an initiative. It’s a mindset.

Here’s your challenge: What’s one thing you’ll do or say differently this week to better engage your team?

Whether you’re a startup founder or a Fortune 500 VP, your leadership defines your culture. And culture defines everything.

If you’re looking to build a stronger, more resilient team—take the first step today.  Let’s build the culture—and the leadership—your people deserve. Email us or book a quick strategy session

Resources:

Gallup. (2025). State of the global workplace: 2021 report. Retrieved from https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx

Dennison, K. (2024, September 13). Why recognition could be the key to employee engagement in 2025. Forbes. Retrieved from https://www.forbes.com/sites/karadennison/2024/09/13/why-recognition-could-be-the-key-to-employee-engagement-in-2025/

Cecchi-Dimeglio, P. (2024, June 14). Six effective strategies to enhance employee engagement. Forbes. Retrieved from https://www.forbes.com/sites/paolacecchi-dimeglio/2024/06/14/six-effective-strategies-to-enhance-employee-engagement/

DHR Global. (2025). The new dynamics of employee engagement in 2025. Retrieved from https://www.dhrglobal.com/insights/the-new-dynamics-of-employee-engagement-in-2025/

Brower, T. (2024, April 21). How to increase employee engagement. Forbes. Retrieved from https://www.forbes.com/sites/tracybrower/2024/04/21/how-to-increase-employee-engagement/