Global Employee Engagement Sees Significant Decline, Impacting Economy by $438 Billion

A newly released report from Gallup reveals an alarming trend in global employee engagement. For the second time in 12 years, the percentage of engaged employees worldwide has decreased. From a promising 23% in 2023, the figure has plummeted to just 21% in 2024. This decline in engagement is not just a statistic; it represents a staggering economic loss of approximately $438 billion in productivity for the global economy.

Reasons Behind the Decline

The primary culprit for this decrease appears to be a drop in engagement levels among managers. While the engagement rate among individual contributors has remained stable at 18%, managers saw a notable decline - dropping from 30% to 27%. Young managers, specifically those under 35, experienced a five-point decrease in engagement, while female managers saw a decline of seven points. This drop signals a potential vulnerability; as Jim Harter, Gallup's chief workplace scientist, explains, the level of engagement among managers directly influences the overall productivity of their teams.

The report emphasizes the flipside of low manager engagement - the potential threat it poses to business performance and, ultimately, GDP growth if leaders do not respond proactively.

Recommendations for Improvement

In light of these findings, Gallup outlines several strategies that organizations can adopt to counteract the falling engagement rates among managers:

1. Training Initiatives: Implement comprehensive training programs for all managers. Gallup suggests that those who receive training experience a halving of active disengagement. Over recent years, manager development has dwindled, with many reporting a lack of training.

2. Coaching Techniques: Educate managers on effective coaching methods. Leaders that engage in management training typically see a 22% increase in engagement among their teams, indicating a clear benefit to investing in development.

3. Continued Support: Foster an environment that encourages manager development. Providing ongoing development opportunities can enhance manager thriving by 6%, and with active support from the workplace, this figure can increase to an impressive 50%.

Regional Variations in Engagement

Historically, the U.S. and Canada have reported the highest levels of employee engagement globally. However, for the first time, this region shares this distinction with Latin America and the Caribbean due to a new peak level of engagement. Meanwhile, despite witnessing a decline, South Asia continues to remain above the global average – a decrease chiefly attributed to India's significant drop.

Unfortunately, European employees reported the lowest engagement rates in several regions for the fifth consecutive year, while areas like the Middle East, North Africa, and sub-Saharan Africa continue to lag behind.

Interestingly, the Post-Soviet Eurasia region registered a new high at 26%, which stands in stark contrast to Southeast Asia, which has also seen vast improvements in engagement levels since 2011.

Insights into the Job Market

Despite the declines in engagement, over half of employees globally (51%) believe it is a favorable time to seek new employment. Interestingly, regions such as Australia and New Zealand are the most optimistic about their job markets. However, the overall sentiment has decreased slightly compared to previous years.

About half of employees worldwide are either watching for or actively hunting for new opportunities, indicating a dynamic job market, albeit a cautious one.

Focus on Employee Wellbeing

Another critical concern is employee wellbeing, which has seen a consecutive dip for two years. Currently, only 33% of employees report thriving in their personal lives, the lowest since 2021. Notably, just over half of employees in the U.S. and Canada claim to be thriving, while Australia and New Zealand report similarly positive but waning figures.

In stark contrast, workers in South Asia appear to be struggling the most with overall wellbeing.

Conclusion

As businesses globally come to terms with these findings, it becomes evident that enhancing employee engagement, particularly among managers, is vital for maintaining productivity and fostering a positive workplace culture. Addressing these issues could not only revive engagement rates but also restore lost economic values and enhance overall business performance. Stakeholders are urged to invest in their leaders to pave the way for a more committed workforce.