Employee engagement: what it is, what drives it, and how to improve it

Engagement just dropped to a 5-year low

Gallup's 2026 State of the Global Workplace report put global employee engagement at 20%. That's the lowest figure since 2020, and it marks a steady decline from the 2022 peak of 23%. The cost is enormous. According to Gallup, disengaged employees drain roughly $10 trillion from the global economy every year in lost productivity. That's about 9% of global GDP. In the US alone, the figure is roughly $2 trillion.

But the headline number isn't the most worrying part. It's where the decline is hitting hardest. Manager engagement fell 5 points in a single year, from 27% to 22% between 2024 and 2025. Since managers account for roughly 70% of the variance in team engagement, that drop cascades through entire organisations. For a deeper look at the data, see our breakdown of the latest employee engagement statistics.

The good news: engagement responds fast to the right inputs, and the biggest lever (manager support) is also the most fixable one. The rest of this guide covers exactly what to do about it.

Why listen to us

We see Eletive not just as a tool, but as a partner in our ongoing journey to enhance employee engagement.

At Eletive, we help HR and people teams turn engagement data into action every day. This guide draws on what we see across organisations like AkzoNobel and SD Worx, real rollouts, not theory. The focus throughout is what actually moves engagement, not just what measures it.

What is employee engagement?

Employee engagement is how committed people feel to their work and their organisation's purpose, and how willing they are to put in discretionary effort. It goes beyond showing up. An employee can be perfectly satisfied with their pay, benefits, and working conditions but still do the minimum and mentally check out.

William Kahn first defined the concept in 1990. He described engagement as a psychological state where people express themselves physically, cognitively, and emotionally through their work. Kahn identified 3 conditions that make engagement possible. Meaningfulness is whether the work itself feels worthwhile. Psychological safety is whether people feel they can be themselves without risk. And availability is whether they have the energy and emotional resources to fully engage.

When those 3 conditions are present, people invest more of themselves in their roles. When they're absent, people pull back, even if they're otherwise content.

The CIPD takes a more practical view. They describe work engagement through 3 dimensions. Vigour covers energy and resilience, dedication covers enthusiasm and pride, and absorption is about deep concentration in the task at hand.

In everyday terms, the difference is visible. Engaged employees care about outcomes and take ownership of problems before they escalate. They stay longer, contribute ideas, and support their teammates. Disengaged employees do none of that, and the costs of that gap are steep.

Engaged vs disengaged employees

The difference between engaged and disengaged employees shows up in daily behaviour, not in annual reviews alone.

Gallup splits the global workforce into these 3 groups. 20% are engaged, 64% are not engaged, and 16% are actively disengaged. The "not engaged" group is the silent majority. They're physically present but mentally absent, and that's where most of the improvement opportunity sits. Reaching this group is often more productive than trying to convert the actively disengaged.

Employee engagement vs related concepts

Engagement overlaps with several other workplace ideas, but it isn't the same as any of them. Treating them as interchangeable leads to measuring the wrong thing and solving the wrong problem.

Engagement vs employee satisfaction

Satisfaction is about contentment. Does someone feel fairly paid? Do they get along with their manager? Are the conditions they work in acceptable? A person can tick all of those boxes and still be completely disengaged. They're comfortable, but they're coasting.

Engagement includes everything satisfaction covers, plus emotional commitment and a willingness to go further. A well-designed employee satisfaction survey captures contentment. But engagement surveys also need to measure connection, purpose, and motivation.

The simplest way to think about it is this. Satisfaction stops people from leaving. Engagement is what makes them want to stay and do their best work.

Engagement vs employee wellbeing

Wellbeing covers how people feel physically, mentally, and emotionally. It includes stress levels, workload balance, mental health, and whether someone can fully switch off after work hours. Engagement without wellbeing leads to burnout. People who are deeply committed but chronically overworked will eventually crash.

The relationship works both ways. Poor wellbeing drags engagement down over time. And sustained disengagement erodes wellbeing too, because people who feel disconnected from their work tend to feel worse about everything else. Ignoring one while optimising the other creates a cycle that undermines both.

The two need to be managed together. For practical steps, see our guide on strategies to improve employee wellbeing.

Engagement vs employee experience

Employee experience (EX) is the broader umbrella. It covers every interaction someone has with their organisation, from the first job listing through onboarding, daily work, development, and eventually offboarding. Engagement is one outcome of that experience.

A strong employee experience creates the conditions for engagement. But you can have a polished experience on paper and still see low engagement. A modern office, the latest tech, and generous benefits don't guarantee that people feel connected to their work. The experience shapes the environment. Engagement is what people feel within it.

Engagement vs happiness

Happiness is a mood. Engagement is a state of mind. Free snacks and team socials can boost happiness for a day or two, but they don't build lasting engagement. That comes from meaningful work, clear expectations, and concrete opportunities to grow.

It's possible to be engaged and not always happy, because challenging work creates friction. But it's hard to sustain engagement in a workplace where people are unhappy. The two are related, but one is a fleeting feeling, and the other is an ongoing relationship with work.

Why employee engagement matters

The business case for engagement is backed by one of the largest workplace studies ever conducted. Gallup's 11th edition meta-analysis covered 183,806 business units across 53 industries and 90 countries. The findings are consistent, and the gaps between engaged and disengaged teams are large.

Productivity

Highly engaged teams produce 18% more in sales productivity than their disengaged counterparts. That gap shows up in output quality too. When people care about their work, they solve problems faster, waste less time on rework, and catch issues before they grow into expensive ones.

Productivity gains from engagement also compound over time. Engaged teams build better processes, share knowledge more freely, and help new team members ramp up faster.

Profitability

Top-quartile business units for engagement are 23% more profitable than bottom-quartile ones. Over time, that gap compounds into a meaningful competitive advantage, because engaged teams make better decisions, serve customers better, and waste fewer resources.

Gallup's research shows another pattern. Business units in the top half of engagement more than double their odds of success.

Retention

Engaged teams see 51% lower turnover in low-turnover organisations and 21% lower turnover in high-turnover ones. Every departure carries a replacement cost at 50% to 200% of the employee's annual salary. So the link between engagement and retention has a direct financial impact.

The cost goes beyond recruitment fees. Each departure takes institutional knowledge with it. And when one person leaves, it increases the workload and stress on the team that remains, which can trigger more departures. For more on this, see our guide on how to reduce employee turnover.

Absenteeism

The gap here is the most dramatic in the data. Top-quartile teams see 78% lower absenteeism than bottom-quartile ones. When people want to be at work, they show up. When they don't, sick days and unexplained absences climb, and every unplanned absence puts pressure on the people who are there.

For organisations tracking absenteeism rate as a KPI, engagement data adds context. It helps you understand why absence rates are high, not just that they are.

Customer satisfaction

Engaged employees deliver better customer experiences. They're more responsive, more attentive, and more likely to resolve problems on the first attempt. Gallup's data shows significantly higher customer loyalty in engaged business units. That makes intuitive sense. People who care about their own work tend to care about the people they serve.

The effect is strongest in customer-facing roles, but it extends to any team whose work shapes the customer journey, including product, operations, and support.

Safety

In industries with physical risk, engagement has a direct safety impact. Engaged teams report fewer workplace incidents. People pay more attention, follow protocols more carefully, and look out for one another. This makes engagement a health and safety metric as much as an HR one.

For a deeper look at these outcomes, explore the 8 powerful benefits of employee engagement.

What are the drivers of employee engagement?

Motivated-employees

Engagement doesn't happen by accident. Specific workplace conditions drive it, and organisations can measure and improve them. Research from Gallup, the CIPD, and large-scale employee listening programmes points to the same core drivers, which fall into three connected themes: leadership and clarity, recognition and growth, and culture and connection.

1. Leadership and clarity

Everything else on this list depends on people knowing what's expected of them and trusting the person who leads them. These two drivers set the floor for engagement. Get them wrong, and no amount of recognition or purpose makes up the difference.

Manager quality

This is the single biggest factor. Gallup attributes roughly 70% of the variance in team engagement to the direct manager. A good manager sets clear expectations, gives meaningful recognition, and supports professional growth. They also create an environment where people feel safe enough to speak up and take risks.

Manager engagement itself fell from 27% to 22% between 2024 and 2025, a 5-point drop in a single year. That matters because when managers are disengaged, the effect cascades through their teams. Investing in manager development isn't optional. It's the fastest lever available to most organisations.

Clarity of expectations

This sounds basic, but less than half of employees (47%) strongly agree they know what's expected of them. It's one of the most foundational elements Gallup measures, and it's been falling since 2020. People can't be engaged in work when they're unsure what success looks like or how their contribution fits the bigger picture.

Clarity extends to how priorities are communicated, how goals connect across teams, and whether people understand how their performance is evaluated. When organisations grow or restructure, clarity is often the first thing to break down, and engagement drops with it.

2. Recognition and growth

Once people know what's expected of them, the next question is whether their effort and progress get noticed. These two drivers are where engagement either compounds or quietly erodes.

Recognition and feedback

Only 30% of employees feel that someone at work encourages their development. That figure dropped from 36% in 2020. Recognition is most effective when it's specific, timely, and tied to outcomes the person cares about. A generic "good job" doesn't improve engagement. A specific "your analysis saved us 2 weeks of rework on the Q3 report" does.

Feedback needs to flow in both directions. Employees who can share upward feedback and see that it's heard are more likely to stay engaged over time.

Growth and development

People want to see a path forward. Employees who can see how they might progress, learn new skills, or move laterally within the organisation are 3.5 times more engaged than those without that visibility. Development doesn't always mean promotion. It can mean stretch projects, new responsibilities, mentoring, or cross-functional moves.

Organisations that make development visible and accessible tend to retain their strongest performers for longer, because those people can see a future worth staying for.

3. Culture and connection

The last three drivers are less about process and more about how work feels day to day, whether it means something, whether people have room to make decisions, and whether they feel safe doing so.

Purpose and meaning

Engagement rises when people feel their work connects to something bigger than daily tasks. That connection doesn't need to be grand. It can be as simple as understanding how a team's output fits the organisation's wider goals. Or it might mean seeing the impact of the work on someone outside the team.

Leaders who communicate the "why" behind priorities, even routine ones, help their teams stay connected to the work's purpose.

Autonomy and trust

People who have some control over how they approach their work, solve problems, and manage their time are more engaged than those working to rigid scripts. This applies across roles. Even in structured environments, giving people agency over small decisions builds ownership and pride.

Autonomy works best when it's paired with clarity. People need to know what outcome is expected before they can take ownership of how to get there.

Psychological safety

People need to feel they can speak up, ask questions, admit mistakes, and challenge ideas without fear of punishment. When psychological safety is low, employees hold back. They stop raising concerns, sharing ideas, and flagging risks, and that costs the organisation both innovation and engagement.

Building psychological safety starts with managers. Teams where the manager models vulnerability (admitting their own gaps, asking for input, thanking people for pushback) tend to develop stronger trust over time.

For a deeper look at each driver, read our guide on the drivers of employee engagement and how to measure them.

How to measure employee engagement

You can't improve engagement if you can't see it. Measurement gives you a baseline, shows where problems are, and tells you whether your actions are working. But the method matters as much as the decision to measure.

Annual engagement surveys

This is the traditional approach. These surveys tend to be comprehensive, with 40 to 80 questions, and they run once a year. They give you a detailed snapshot, but the data can be months old by the time you've analysed results, built action plans, and started implementing changes.

Annual surveys still have a place for deep benchmarking and trend analysis. But they work best alongside more frequent methods. The difference between real-time pulse surveys and annual surveys is significant, and most organisations benefit from combining both.

Pulse surveys

These are shorter, more frequent surveys (weekly, monthly, or quarterly) that track engagement continuously. They tend to use 5 to 15 questions and give leaders a close-to-real-time view of how people are feeling. Pulse surveys are better at catching problems early and showing whether recent changes are having an effect.

Because they're shorter, they also tend to get higher response rates. And higher participation means more representative data. For guidance on getting started, see our guide on pulse surveys for employees.

Employee Net Promoter Score (eNPS)

The eNPS asks one simple question. "How likely are you to recommend this organisation as a place to work?" It produces a score between -100 and +100 that's easy to track over time. But it only tells you the number, not what's behind it. Use it alongside other methods to get both the signal and the context.

Our complete guide to eNPS covers how to calculate and interpret your score.

Lifecycle surveys

These capture engagement at specific moments in the employee journey. Those moments include onboarding, probation review, role changes, and exit. They help you understand where engagement is strongest and where it drops off, so you can target support at the right stage.

Exit surveys are especially valuable. They tell you why people leave, and patterns across exit surveys can reveal systemic issues that pulse surveys might not surface.

1-on-1 conversations

Surveys capture trends at scale. Conversations capture nuance. Regular 1-on-1 meetings between managers and their team members surface concerns that surveys miss entirely. They also signal that the organisation values individual voices, which is itself an engagement driver.

The best 1-on-1s are structured enough to be useful but flexible enough to follow what the employee needs to discuss. A standing agenda that covers progress, blockers, and development keeps them focused without making them feel scripted. And documenting key points in a shared note means nothing gets lost between meetings.

Choosing the right metrics

No single metric tells the whole story. Most organisations track a combination of measures to build a fuller picture.

• Employee engagement index (a composite score across multiple engagement dimensions)

• eNPS (the single-question loyalty indicator)

• Survey participation rates (low participation is itself a warning signal)

• Specific driver scores (clarity, recognition, development, manager quality)

• Operational data (retention rates, absenteeism, internal mobility)

For help choosing the right combination, see our overview of employee engagement metrics. And for question design, explore our list of proven employee engagement survey questions.

How to improve employee engagement

Measurement is the starting point. The harder work is acting on what the data tells you. These are the strategies that consistently make a difference, based on what research and practice both show.

Act on results and close the feedback loop

The fastest way to damage engagement is to survey people and then do nothing visible with the answers. When feedback disappears without a response, employees stop trusting the process. They disengage from surveys first, and then from the work itself.

Share key findings with teams. Explain what you're going to change and why, and then follow up with progress updates so people can see the impact. Closing the loop matters more than any other single step in the process. It proves that feedback leads to action, and that proof is what keeps people willing to share.

For a full breakdown, read our guide on how to improve employee engagement in the workplace.

Give managers the tools they need

Managers are the biggest lever for engagement, but many don't have the data, training, or support to use that lever effectively. Give them access to their team's engagement results. Provide practical tools for 1-on-1s, goal-setting, and feedback conversations, and coach them on what the data means and how to respond.

This isn't about adding admin. It's about giving managers the visibility and structure to lead their teams with confidence. When managers can see engagement trends for their own team and act on them directly, the whole system responds faster.

Build a continuous listening approach

An annual survey gives you one data point per year. A continuous listening strategy gives you a real-time view of how engagement changes over weeks and months. Combine pulse surveys, lifecycle surveys, eNPS, and informal check-ins to build a picture that updates as your organisation evolves.

The goal isn't more surveys for the sake of it. It's better timing, so you catch problems early enough to fix them before they become entrenched.

Make recognition specific and regular

Recognition works when it's specific and timely. "Your work on the onboarding redesign cut new-hire time-to-productivity by 3 weeks" is meaningful. "Great job this quarter" is forgettable. Build recognition into daily management routines and make sure it reaches everyone, not only the most visible team members.

Recognition doesn't need to be expensive or elaborate. A specific acknowledgement from a direct manager, delivered close to the moment, carries more weight than an annual award ceremony. Peer-to-peer recognition also helps, because it builds a culture where noticing good work is everyone's job.

Invest in development and career paths

Development is one of the strongest engagement drivers, and it's been declining for years. Create visible career paths so people can see where they might go. Offer skill-building that connects to the work they do. And make internal moves accessible, so people grow inside your organisation instead of leaving to grow somewhere else.

Where possible, connect development to engagement survey results. If a team scores low on growth and development, that's a signal to prioritise learning opportunities for that group. Development doesn't have to be a formal programme. Stretch assignments, shadowing opportunities, and access to mentors all count.

Set clear expectations and align goals

Gallup's data shows that clarity of expectations is one of the fastest-falling engagement elements. Make sure every team member knows what's expected of them, how their work connects to the team's objectives, and how success will be measured. Goal frameworks like OKRs help here, but they only work if they're reviewed and updated regularly.

Use data to benchmark and track progress

Engagement isn't a one-time project. It's an ongoing practice. Use benchmark data to understand where you stand relative to your industry and peers. Track your scores over time. And segment the data by team, location, role, and manager so you can focus effort where it makes the biggest difference.

Who owns employee engagement?

One of the main reasons engagement stalls in organisations is that nobody owns it clearly. HR launches a survey, results get shared, and then nothing happens because everyone assumes someone else will act.

The answer is that everyone owns a piece, but the pieces look different depending on the role. Eletive calls this self-leadership: the idea that engagement isn't something HR delivers to people, but something managers and employees build together, day to day. When ownership is clear, engagement improves. When it's ambiguous, it stalls.

Leadership sets the direction

Senior leaders own the conditions that make engagement possible. They decide how much to invest in manager development and whether feedback is taken seriously. They also set the tone for transparency and for whether leaders model the behaviours they expect.

When leadership treats engagement as a strategic priority, with visibility at board level and dedicated resources behind it, engagement improves. When they delegate it entirely to HR, it stalls. The commitment has to start at the top and be visible enough that people believe it.

HR builds the systems

HR's role is to design the measurement approach, choose the tools, create the frameworks, and support managers in using them. But HR shouldn't be the only team held accountable for engagement scores. That creates a bottleneck and sends the wrong signal. HR enables engagement across the organisation. It doesn't carry engagement alone.

The strongest HR teams position themselves as coaches and enablers, building manager capability rather than trying to run engagement for every team from the centre.

Managers make it happen day to day

This is where engagement lives in practice. Managers run the 1-on-1s, set expectations, give recognition, and respond to concerns. The best systems in the world won't help if managers aren't equipped or motivated to use them.

Equipping managers means giving them access to data, practical frameworks, and enough time to lead their people. When managers can see engagement trends for their own team and act on them directly, the feedback loop tightens, and improvements happen faster.

Employees take ownership too

Engagement isn't something that gets done to people. Employees who take ownership of their development, share honest feedback, and contribute actively to their teams amplify the impact of everything else. This is the principle behind self-leadership, where engagement becomes a shared responsibility across the organisation.

The most effective model distributes ownership across all 4 groups. Leadership funds it, HR enables it, managers lead it daily, and employees participate actively.

Engagement for frontline and deskless teams

Up to 80% of the global workforce is deskless. These are people in manufacturing, healthcare, retail, logistics, and hospitality who don't sit at a desk all day. Many don't have a company email or laptop. And they're the least engaged group. Gallup's data shows that on-site workers who can't work remotely report just 19% engagement, the lowest of any work setting.

The root problem is access. 83% of frontline workers don't have regular access to email. Traditional survey tools, intranets, and communication platforms don't reach them. If you can't reach people, you can't listen to them. And if you can't listen, you can't act.

What frontline teams need

Standard engagement tools assume everyone has a laptop and an email address. Frontline teams need something different.

• Mobile-first access so people can respond from their own phone in under 5 minutes

• Kiosk mode for shared devices in factories, warehouses, or retail locations

• Multi-language support in 40 or more languages, so everyone can respond in the language they're most comfortable with

• Short, focused surveys that respect the fact that these workers have limited time during shifts

• SMS or app-based notifications so survey invitations reach people who aren't checking email

These aren't optional extras. For organisations with large frontline populations, they're the difference between hearing from 20% of the workforce and hearing from 90%.

For practical guidance, see our guides on engaging blue-collar workers with employee surveys and the 10 engagement challenges in frontline and blue-collar sectors.

Why it matters for your overall engagement numbers

Frontline workers make up the largest portion of many organisations' headcount. If your engagement programme only reaches office-based staff, you're seeing a fraction of the picture. And you're missing the teams with the most room for improvement.

Getting engagement right for frontline teams means giving them the same voice that desk-based employees already have. When you do, participation rates climb, and the data becomes representative of your whole organisation. That's when the insights start to tell you something you can act on.

Organisations with strong frontline engagement programmes also tend to see lower turnover in hard-to-fill roles. That has a direct impact on both recruitment costs and operational continuity.

Tools for employee engagement

The right platform makes the difference between engagement data sitting in a spreadsheet and insights that lead to action. When evaluating tools, look for continuous listening capabilities, not annual surveys alone. You also want manager-level dashboards, built-in action planning, and the flexibility to adapt as your organisation grows.

Eletive brings this together in a single platform, replacing the 4 to 6 disconnected tools most organisations juggle for surveys, 1-on-1s, goals, and feedback. It combines real-time pulse surveys, people analytics, AI-powered insights, and manager enablement tools, built on a validated, science-based survey methodology.

Teams can move from yearly to quarterly to bi-weekly surveys at their own pace, and combine standard questionnaires with custom ones. The platform supports 40+ languages and includes kiosk access for frontline teams, so every employee can participate regardless of role, location, or language.

AkzoNobel, with 34,100 employees globally, achieved close to 90% survey participation and collected 43,000 employee comments using Eletive. SD Worx rolled it out across more than 10,000 employees in 27 countries. And Xella Group uses the platform to engage 4,500 employees across Europe.

Book a demo with Eletive to see how it works.

FAQs

1. What is employee engagement in simple terms?

Employee engagement is how committed and connected someone feels to their work and organisation. Engaged employees care about outcomes, take initiative, and contribute beyond what's strictly required. Disengaged employees do the minimum and mentally check out.

2. What is the difference between employee engagement and employee satisfaction?

Satisfaction is about contentment with pay, conditions, and management. Engagement goes deeper. It includes emotional commitment, a sense of purpose, and a willingness to go beyond basic requirements. Someone can be fully satisfied but not engaged at all.

3. How do you measure employee engagement?

The most common methods are pulse surveys, annual engagement surveys, eNPS, lifecycle surveys, and regular 1-on-1 conversations. Most organisations use a combination. They track composite engagement scores, specific driver scores, and operational metrics like retention and absenteeism alongside their survey data.

4. What are the main drivers of employee engagement?

Research consistently points to manager quality, clarity of expectations, recognition and feedback, growth opportunities, purpose and meaning, autonomy, and psychological safety. Of these, the direct manager has the largest single impact. Gallup attributes roughly 70% of the variance in team engagement to the manager.

5. Who is responsible for employee engagement?

Engagement works best when ownership is distributed. Leadership sets the strategy and provides resources. HR builds the systems and frameworks. Managers lead it daily through conversations, feedback, and goal-setting, and employees contribute by sharing honest feedback and owning their development. The model breaks when any one group is expected to carry it alone.

6. Why is employee engagement declining?

Global engagement fell to 20% in 2025, the lowest since 2020. Manager engagement fell sharply, from 27% to 22% between 2024 and 2025, and that decline rippled through teams. Falling clarity of expectations, reduced development support, and ongoing workplace disruption have all contributed.

7. How much does low employee engagement cost?

Gallup estimates that disengaged employees cost the global economy roughly $10 trillion in lost productivity every year, about 9% of global GDP. In the US alone, the figure is approximately $2 trillion. Those costs surface as higher turnover, more absenteeism, lower productivity, and weaker customer outcomes.