Globally, employees are checking out. Here's what leaders need to know.

Gallup released its State of the Global Workplace: 2026 Report today, and the headline is hard to ignore: global employee engagement has fallen to 20% in 2025, the first time Gallup has recorded two consecutive years of decline. That means 8 in 10 employees worldwide are going through the motions. And the economic toll is staggering: an estimated $10 trillion in lost productivity globally, equivalent to 9% of global GDP.

Implications for purpose-driven organizations

“Recent global CEO surveys make it clear that leaders view their people as a key asset, yet, we are seeing a gap between what executives say and how engaged employees actually are, suggesting the need for a different kind of engagement," said Risa Sherman, Senior Director at Carol Cone ON PURPOSE.

We see these findings as confirmation of what purpose-driven leaders already know: when employees understand why their work matters, engagement follows. The organizations navigating this moment most effectively are building cultures where people feel connected to something meaningful. Interestingly, many nonprofit organizations are finding themselves particularly well-positioned to capitalize on this. "Gallup has basically quantified a global hunger for work that feels meaningful and ‘good for others’, and nonprofits are sitting on that value proposition," said Audrey Sylvia, Senior Director at Carol Cone ON PURPOSE. "Our opportunity within the NGO sector now is to design jobs, partnerships, and funding models that turn that hunger into sustained, purpose‑driven work instead of more burnout."

The manager crisis

The steepest declines aren't happening among frontline workers. Manager engagement dropped five points in a single year, from 27% to 22%, and has fallen nine points since 2022. When the people responsible for driving culture and performance are disengaged themselves, the effects ripple across entire organizations.

This is more than a management training problem. Managers account for 70% of the variance in team engagement. They set the tone, shape daily experience, and serve as the connective tissue between organizational strategy and the people doing the work. When that layer frays, no amount of top-down messaging or bottom-up initiative can fully compensate.

Managing the emotional workplace

After a five-year run of consistent improvement, global employee thriving peaked in 2022 and has been declining since. In 2025, it ticked up one point to 34%, with half of world regions seeing modest gains. But the underlying emotional picture remains difficult. Daily stress, anger, and sadness among workers all remain above pre-pandemic levels, suggesting either lasting psychological impacts from that period or a fundamentally more challenging baseline than before 2020.

What the data also shows, however, is a clear pathway. New Gallup analysis, conducted in partnership with the Wellbeing and Planet Earth Foundation and PERSOL, finds that when employees enjoy their work, believe it improves others' lives, and feel they have genuine choices in what they do, they report stronger wellbeing and higher engagement. In other words, work that feels meaningful and self-directed isn't just good for people. It's measurably good for business.

A new variable: AI

This year's report introduces a finding worth paying close attention to. Manager-led AI adoption and AI integration with existing systems are the top two drivers of frequent AI use within organizations. Managers aren't just engagement levers; they are now the critical link between organizational AI investment and actual results.

As Gallup CEO Jon Clifton put it: "Businesses are investing heavily in AI, but the results are not showing up in the bottom line. Gallup's data points to an answer the corporate world has largely ignored: the manager. Organizations pouring resources into AI tools without first addressing manager disengagement may find those investments significantly underperform.

What comes next

For leaders looking at these numbers, consider the following next steps. Audit where purpose lives in your organization: is it built, mobilized, and advanced by employees? That can improve engagement and overall employee wellbeing. Invest in your managers not only as performance drivers, but as culture carriers. And as you build out your AI capabilities, don't separate that work from your engagement work. The two are directly linked.

Organizations that get this right won't just reverse the trend. They'll pull ahead of it.