The ongoing economic uncertainty that began during the pandemic in 2020 is affecting the workforce. Global employee engagement is in decline, and this decline is negatively impacting productivity, innovation, and overall organizational performance.
In the most recent State of the Global Workforce report from Gallup, “Global employee engagement fell two points to 21% last year, with lost productivity costing the global economy $438 billion. Engaged employees produce better business outcomes than disengaged employees — and engaged teams have a measurable impact on organizational performance.”
Engagement has declined just twice in the past 12 years, once during the pandemic in 2020, and again this past year, 2024. The biggest drop was at the manager level, where engagement fell by three percentage points, from 30% to 27%. The decline was more pronounced among younger managers, at 5%, and female managers, at 7%. When managers are disengaged, there is a higher likelihood that their teams will also be disengaged. 70% of team engagement is attributable to the manager.
It should not come as a big surprise that managers are feeling pressure. They must balance employee needs and expectations with shifting executive priorities during a prolonged period of uncertainty. Turnover during the past few years, remote work and return-to-office mandates, and AI implications are just a few of the issues managers find themselves in the middle of, and they are struggling to deliver the best outcomes.
Relatedly, global employee well-being also declined in 2024, marking a second consecutive year of decline. Overall, just ⅓ of workers are “thriving” in their lives. Managers again recorded the largest decline. For older managers and women, the drops were even more significant at 5% and 7% respectively.
“Many factors influence how people feel about their life overall, including satisfaction with their income and the cost of living. Nevertheless, many employees spend most of their lives working, and their work experiences influence their life evaluations. Half of employees who are engaged at work are thriving in life overall, compared with only a third of employees who are not engaged.”
According to the report, if the global workforce were fully engaged, the global economy would see an increase of almost $10 trillion, which is roughly 9% of the global GDP. The report also suggests a rethinking of managerial roles. “By redesigning role responsibilities around performance coaching, organizations can improve team performance for the new workplace, not the old one.”
Training is one area that could significantly increase employee engagement. Only 44% of managers report having received some form of leadership training. Gallup has found that even rudimentary training can reduce manager disengagement by 28%.
Another aspect of training that can have a tangible impact on engagement is coaching. When managers learn to become stronger coaches for their teams, the results are long-term, with a roughly 20% improvement in employee engagement.
When combined with the training mentioned above, manager development programs can increase engagement by 50%. Just as they are learning to be better coaches to their teams, they also need the support and coaching from their leadership.
“Gallup’s employee engagement meta-analysis finds that when organizations build their growth strategy around great management, the result is better customer service and higher productivity, sales and profits. These outcomes are reproducible across industries and cultures. The best organizations Gallup has studied put manager training and development at the center of their strategy.”
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