Employee engagement in the U.S. dropped to 31% in 2024, the lowest level in ten years. This figure is the worst since 2014.
“Actively Disengaged” Employee Numbers Also Peak
Gallup’s latest report reveals that actively disengaged employees now make up 17% of the workforce. Those are employees whom Gallup defines as “resentful that their needs aren’t being met and are acting out their unhappiness.”
That’s a troubling sign for organizations trying to inspire and retain talent. It’s an even more troubling sign for CMOs and CXOs who are trying to deliver exceptional customer experience. Can you imagine the results of nearly one out of five employees having a visibly bad attitude in dealing with customers.
It’s important to remember these are averages. Some companies will do better, while others, unfortunately, do worse.
The Downward Trend in Employee Engagement
Employee engagement peaked at 36% in 2020. That year marked a high point for connection, capping ten years of uninterrupted increases. Things have steadily worsened since then.
Fthe deBetween 2023 and 2024, engagement dropped by two points. This means over three million fewer engaged employees just last year.
Gallup’s data shows engagement struggles across the board. Key areas like clarity of job expectations, feeling cared about, and opportunities for growth have all seen significant declines.
Younger Workers Are Struggling
The drop in engagement is hitting younger employees the hardest. Gen Z, in particular, saw a remarkable five-point dip last year.
What’s causing this? These workers report issues with:
- Lack of recognition.
- Limited growth opportunities.
- Insufficient resources to succeed.
When employees don’t feel supported, they disengage. Younger generations, who value purpose and development, are particularly vulnerable.
White Collar Industries Hit Hardest
Some industries are feeling the engagement slump more than others. Finance, insurance, transportation, technology, and professional services all reported sharp declines.
These fields often demand high productivity under intense pressure. Without strong engagement strategies, workers can feel disconnected and overwhelmed.
I’d speculate that fears about AI encroaching on many jobs in this group could also fuel discontent, particularly if employers are moving quickly to test and adopt AI tools.
Economic Context and Confusion
Interestingly, labor productivity rose last year, even as engagement dropped. But this isn’t a win. This, too, could be caused in part by AI adoption. Google, for example, recently reported that 25% of its code was being written by AI.
At the same time, economic uncertainty weighs on employees. Job openings remain high, but many workers feel stuck. Quit rates are down from recent peaks but still higher than historical norms.
What’s Behind the Decline in Engagement?
Gallup points to several culprits for declining engagement:
- Rapid organizational changes.
- Hybrid and remote work challenges.
- Outdated performance management systems.
- Shifting customer and employee expectations.
For many businesses, the result is the same: employees who feel undervalued, underappreciated, and unclear about their roles.
One example: more companies are demanding that remote and hybrid employees return to the office full time. This may make those who were assured they could work from home feel betrayed by the company. It’s also leading to deceptive practices like “coffee badging,” hardly a hallmark of a healthy work culture.
How Leaders Can Increase Employee Engagement
The good news? Some companies have cracked the code for engagement, achieving rates double the national average. CMOs, CXOs, CHROs and CEOs all have a role to play. Here are some of the success strategies identified by Gallup:
- Clarify Culture and Purpose. Leaders must define the culture they want and align it with their organization’s goals. When employees see a clear purpose, they’re more likely to stay engaged.
- Empower Managers. Train managers to build strong relationships with employees. Clear priorities, frequent feedback, and consistent accountability are key.
- Select the Right Leaders. Hire and promote managers who can connect with and inspire teams. Not everyone has this skill, but it’s vital for engagement.
- Invest in Engagement. Use proven strategies to measure and improve engagement. Monitor progress and change course as needed.
Why Employee Engagement Matters
Engaged employees are more productive, safer, and deliver better results. They’re also critical for organizational resilience in tough times.
Disengagement, on the other hand, signals deeper vulnerabilities. Leaders who ignore the warning signs risk higher turnover, lower morale, and declining performance.
Customers can tell the difference between engaged and disengaged telephone representatives, sales people, support staff, and other front-line workers. In the hospitality industry, almost everyone encounters guests during the course of the day. Even a one-in-five chance of interacting with a disgruntled, disengaged team member is far too high and, over time, will impact repeat business, revenue, and profit.
The Bottom Line
The drop in U.S. employee engagement should be a wake-up call for every business leader. This is a clear signal that workers feel disconnected.
Before you say, “Well, that’s true for some companies, but not here,” be aware there’s often a huge disconnect between perception and reality. In 2022, workforce analytics company Visier found big gaps between what CEOs thought and what their people said. One example was that 74% of CEOs thought their companies help employees develop new skills but only 38% of the workers agreed.
Reversing the trend in employee engagement will require focus and commitment. But, the companies that increase engagement and reduce disengagement will see the rewards: stronger teams, better performance, and greater success.