Decline in Employee Engagement Signals Economic Challenges for Global Workforce

In a significant shift in workforce dynamics, employee engagement worldwide has witnessed a steep decline, dropping to a mere 20% in 2025, marking the second consecutive year of downturn according to the latest Gallup State of the Global Workplace report. This disconcerting statistic represents the lowest engagement level recorded since 2020, underscoring a pressing issue that not only affects employee morale but also has a considerable impact on global productivity.

The economic toll of dwindling engagement is staggering. For the year 2024 alone, disengagement among employees resulted in a loss of productivity exceeding $10 trillion, which is roughly 9% of the global GDP. This decline has been largely driven by a significant drop in the engagement levels of executives. Since 2022, executive engagement has plummeted by nine percentage points, while individual contributors have managed to maintain relatively stable engagement figures. Jon Clifton, CEO of Gallup, notes, "This report establishes a global benchmark for management effectiveness in the AI era. Companies are investing heavily in AI, yet this investment has not translated into improved financial performance. Gallup's data points towards a neglected area in the business world—the leadership engagement."

For six consecutive years, Europe has maintained its status as the least engaged region on the planet, with employee engagement measured at just 12%. This represents a decline of one percentage point from the previous year. In several large European economies, engagement rates remain alarmingly low, with countries like Croatia and Poland at 7%, France and Switzerland at 8%, and others like the UK and Spain hovering around 10%. Comparatively, countries such as Albania (32%) and Romania (31%) rank as the most engaged in the region, with Sweden and Malta also showing higher engagement levels at 25%.

Since the onset of the pandemic, various countries have shown fluctuations in engagement, with Lithuania experiencing the largest increase of 16 points, followed by Albania (+10) and Sweden (+7). Italy has reported its highest engagement levels in a decade at 11%.

Interestingly, optimism regarding employment opportunities seems to be on the rise. Since 2022, employee perceptions of the job market have remained steady, with a significant percentage (52%) of workers feeling that it is a good time to search for jobs. This sentiment is even stronger in Europe, where 57% of workers believe now is an opportune time for job seekers—the highest recorded optimism for the region. In the Netherlands, this figure reaches an impressive 86%, while Slovakia has the lowest optimism in Europe at 32%.

In contrast, feelings of optimism have sharply decreased in Sweden (-12 points) and Finland (-18 points), while they’ve increased notably in Bosnia and Herzegovina (+12) and Greece (+10).

Despite the declines in engagement, employee well-being has seen slight improvements globally, with 34% of workers considered to be thriving. However, daily reports of stress, anger, and sadness remain high compared to pre-pandemic levels. In Europe, a noteworthy 49% of employees report feeling fulfilled, a figure that exceeds the global average, with countries like Finland (81%), Iceland (78%), and Denmark (78%) topping the global well-being rankings.

Nonetheless, disparities remain throughout Europe, with Northern Cyprus workers showing the lowest likelihood of thriving at 23%. Several countries, including Slovenia (59%), Serbia (56%), and Kosovo (54%), are nearing record well-being levels.

In summary, the reports emphasize significant concerns surrounding employee engagement, particularly in Europe, suggesting a need for increased focus on executive involvement and management practices to leverage employee potential and enhance overall productivity. Gallup continues to offer invaluable insights to help leaders and organizations tackle their most pressing challenges.

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