Most people feel disengaged from their work, but managers can still make all the difference

Employee engagement worldwide has remained steady according to  the latest edition of Gallup’s State of the Global Workplace report. The good news, according to the authors, is that the percentage of engaged employees – those enthusiastic about their work – held at a record high of 23 percent from 2022. However, the bad news is that the majority of employees are still not engaged (62 percent) and just show up to do the minimum, while a significant number (15 percent) are actively disengaged, meaning they dislike their jobs and managers and are looking to leave.

These disengaged employees cost businesses globally £7.2 trillion in lost productivity each year, the report claims. The study of over 183,000 business units worldwide suggests that teams with the highest engagement have 23 percent higher profits than those with the lowest engagement. This is because engaged teams retain top talent, serve customers better, produce higher quality work and achieve other outcomes that lead to profit, according to Gallup.

The interplay between what’s happening in individual companies and macroeconomic trends is important for leaders to consider. Here are three key factors identified in the report:

1. Job markets: While strong job markets mean fewer miserable workers, they don’t necessarily mean more highly engaged workers. More than half of all employees globally say it’s a good time to find a job, with this number varying significantly by country. Gallup found lower levels of active disengagement in countries where employees report a good job market. This suggests that poor job markets are linked to disengagement. However, strong economies may only move workers from being disengaged to not engaged, rather than to engaged.
2. Challenging times: During economic downturns, employee engagement becomes an even stronger predictor of how well a business unit performs. Engaged employees are more likely to double down on their efforts during tough times, while disengaged employees may feel like victims of circumstance. Business units with more engaged employees are more resilient during uncertainty. Engaged employees are also more likely to stay with the company during difficult times. Gallup’s research shows that for companies with average turnover rates of 40 percent or lower, business units with lower engagement have 51 percent higher turnover than those with high engagement.
3. Government labour policies: There is a complex relationship between government labour policies, employee engagement and worker wellbeing. Labour laws have a stronger connection to current life satisfaction than future optimism. Employee engagement, however, is more closely linked to optimism about the future. A great job gives people hope. The labour rights that matter most for current wellbeing are maternity leave, fair wages, social security, job security, fair treatment and safety. Importantly, employees who work in countries with strong labour laws and are also engaged in their jobs report the highest overall wellbeing.

There’s a common perception of a ‘work to live’ culture in Western Europe compared to a more stressful ‘live to work’ mentality in the US, says the report. However, the reality is more nuanced. Not all labour laws in Europe have the same impact on wellbeing, and there’s significant variation in engagement levels within individual countries. For example, engaged employees in countries with working hour restrictions reported lower stress levels.

Gallup’s research suggests that a combination of factors at the business unit level and macroeconomic and government policy level all play a role in employee wellbeing. Great managers who create inspiring and engaging workplaces are the key driver of high engagement. Macroeconomic factors such as job markets have little impact on engagement levels. However, strong job markets and good labour laws can reduce the number of miserable workers. The best outcomes for employee wellbeing are achieved with a combination of the right labour laws and engaging workplaces, it concludes.