From risk to advantage: why manager engagement is the game-changer in 2025
Published on 25 April 2025 • Written by Dr Lisa Colledge
I was saddened, but not surprised, to see Gallup's State of the Global Workplace 2025 report, which has just been published [1].
To date, the only recorded drop in employee engagement globally since 2009—when Gallup began systematically collecting these data—was in 2020. That 2% drop was driven by the COVID-19 pandemic and lockdowns. Engagement recovered in subsequent years, reaching an all-time high of 23% in 2022 and holding steady in 2023. But now, for only the second time ever as you can see in the screenshot below, engagement has dropped again—by the same 2% margin.
Global employee engagement is now at 21%. This means only one in five employees feel any level of connection to their organization’s mission, and believe that they have the leadership, development opportunities, and accountability to contribute meaningfully.
The decline wasn’t uniform: in Europe, for example, engagement remained steady. However, given that Europe already reported the lowest global engagement of only 13%, I suspect that this flat result is more likely to reflect a floor effect — that the statistic is reaching the extreme possible in such a large dataset — than a sign of stability.
Why it matters: organizational impact
Organizational health is defined by McKinsey [2] as how a business is run—regardless of who leads it or what external pressures it faces—and the most resilient organizations have a strong balance between:
Performance metrics with people metrics.
Long-term vision with short-term execution.
Engagement, as reported by Gallup, is an extremely comprehensive people metric, comprising strategy, leadership, performance, accountability, communication, knowledge management, development and ongoing learning [3].
Gallup estimates the global economic cost of the 2% drop in engagement as $438 billion in lost productivity [1], due to the direct impact of engagement on many key business outcomes, as illustrated below [4].
What can your organization do?
First of all, know that you can so something. The drop in engagement and the accompanying financial performance hit was not inevitable. Organizations which exemplify engagement best-practices have maintained engagement levels of 70–75% [1].
Understand the primary cause: declining manager engagement.
Manager engagement fell by 3%, with more severe declines among young managers (-5%) and female managers (-7%) [1].
Manager wellbeing also dropped from 57% to 52% [1].
Employee engagement remained stable—this is a manager-specific issue. But managers drive 70% of the variance in team engagement so employee engagement is likely to fall in the near future [5].
Consider the context. Anecdotal and economic trends suggest that managers are currently confronted by an extremely challenging situation. Many are operating in unsettling, volatile environments. They are expected to satisfy more demands with lower budgets, staffing reductions, and strategic uncertainty.
Consider what makes a difference to managers’ engagement. Gallup highlights a three-pronged approach in ensuring that people are trained in the foundational skills to be managers, learn effective coaching techniques, and enjoy improved wellbeing due to this training [1]. But three prongs seem unnecessary since the first lever encompasses the other two: invest in manager training.
Understand that managers want to be successful. They feel successful when their team members are productive and contributing to the organization’s mission. The literature clearly shows that employees engage productively and contribute when they feel a strong connection to the mission, and have opportunities to development their capabilities to contribute to that mission [6].
One system, one solution
Organizational health depends on employee engagement.
Managers want to be trained to become better managers within their organization.
Employees want to have a stronger connection with, and ability to contribute to, their organization’s mission.
These are not independent issues. They reflect one systemic challenge, seen from three perspectives. A single solution—investing in manager capability—addresses all three.
A competitive opportunity, not just a crisis
This situation is serious, but it presents a clear competitive opportunity for organizations willing to act. A culture of engagement is a stronger differentiator than ever. Manager capability is a multiplier of organizational performance now, as well as in the future.
Now is a strategic time to invest in training that develops managers as coaches, to elicit optimal team performance, so that their team thrives even when the unexpected happens. This isn’t a perk—it’s a proven part to long-term advantage.
If you’re not sure whether you want to go all in, dip your toe in and try a pilot with one or two of your managers.
If you're looking for a training solution that addresses all of these needs and transforms today’s challenge into your competitive advantage, I’d love to share more about an evidence-based way forward with you.
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References
Chris Gagnon, Elizabeth John, and Rob Theunissen, 2017, Organizational health: A fast track to performance improvement, McKinsey & Company.
Jon Clifton and Kristen Lipton, 2024, Announcing the 2024 Gallup Exceptional Workplace Award Winners.
Gallup, State of the Global Workplace 2024 Report: The Voice of the World's Employees.
Jim Harter, 2024, World's Largest Ongoing Study of the Employee Experience, Gallup.
Aaron De Smet, Marino Mugayar-Baldocchi, Angelika Reich, and Bill Schaninger 2023, Some employees are destroying value. Others are building it. Do you know the difference?
I'm Lisa, and I help leaders create inclusive cultures that embrace all neurostyles. By empowering every team member to contribute at their best, while fostering mental well-being, you will boost innovation, retention, and talent acquisition—leading to enhanced business performance.
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