Employee engagement in the U.S. dropped to its lowest point in a decade in 2024, with only 31% of employees reporting being engaged at work. This figure mirrors the engagement levels recorded in 2014. Additionally, the percentage of actively disengaged employees rose to 17%, matching the same year’s data.
A Gallup report reveals that employee engagement decreased by two percentage points from 2023, continuing a trend of increasing detachment, particularly among workers under 35 years old.
While engagement saw a brief uptick midyear, it declined through the remainder of 2024, ending at a decade low. Historically, U.S. employee engagement peaked at 36% in 2020 after years of gradual improvement, but it has been on a downward trajectory since then.
Impact of Declining Engagement.
Each percentage point in engagement represents roughly 1.6 million full- or part-time employees. The cumulative declines since 2020 account for approximately 8 million fewer engaged workers, including 3.2 million fewer compared to 2023.
Key Drivers Behind the Decline.
Gallup’s 12 engagement indicators revealed significant drops (three points or more in “strongly agree” ratings) in these areas during 2024:
Clarity of Expectations: Only 46% of employees feel clear about their job expectations, a sharp decline from 56% in March 2020.
Feeling Valued as a Person: Just 39% strongly believe that someone at work cares about them, down from 47% in 2020.
Encouragement for Growth: A mere 30% of employees strongly agree that someone at work encourages their development, compared to 36% in 2020.
These declines highlight the unmet needs for role clarity, supportive relationships, and growth opportunities across all age groups. Notably, managers—responsible for fulfilling these needs—are also struggling, with only 31% reporting being engaged themselves.
Workforce Segments Most Impacted by Declining Engagement in 2024.
The decline in U.S. employee engagement during 2024 was most evident among certain workforce segments:
Younger Workers (Under 35): Engagement among younger employees, particularly Gen Z, dropped significantly, with a five-point decline compared to the previous year. The most affected areas included clarity of role expectations, recognition, access to necessary tools and resources, opportunities to leverage strengths, feelings of being valued, and avenues for personal and professional growth.
Industry-Specific Declines: Sectors such as finance and insurance, transportation, technology, and professional services experienced noticeable decreases in employee engagement.
Economic Context Behind the Engagement Decline.
This trend unfolded amidst challenging economic conditions. While job vacancies continued to exceed hiring rates, fewer people in 2024 believed it was a favorable time to secure employment. Although quit rates showed a slight decline from their 2021-2022 peaks, they remained near historical averages, according to the Bureau of Labor Statistics (BLS).
Despite modest improvements in overall non-farm labor productivity, growth in business labor productivity was slower compared to the previous year
How Productivity Persists Amid Declining Engagement.
The apparent disconnect between declining employee engagement and rising labor productivity can be attributed to several factors:
Productivity Metrics: The BLS measures labor productivity as the ratio of revenue to hours worked, which focuses on output rather than the quality of work. Gains in productivity can result from technological advancements, intellectual property value, or capital investments.
Engagement’s Broader Impact: Employee engagement directly influences numerous business outcomes, including work quality, safety, and profitability, but these impacts may not immediately reflect in productivity metrics.
Economic Variables: Broader economic conditions, such as high unemployment, inflation, and interest rates, can overshadow workforce engagement when assessing overall productivity. For example, high mortgage rates might limit real estate sales, even for highly engaged agents.
Reasons Behind Rising Disengagement.
Gallup research points to several contributing factors:
Rapid organizational changes.
Challenges posed by hybrid and remote work models.
Shifting expectations from both customers and employees.
Ineffective performance management systems.
Strategies for Leaders to Address Engagement Challenges
Despite these challenges, some organizations have maintained engagement levels more than double the national average. Leaders can reverse engagement declines through targeted strategies:
Clarify Workplace Culture and Purpose: Define and align organizational culture with core values and customer needs.
Lead with Strengths: Establish clear goals, communication strategies, and a focus on people-centered leadership to foster a strong connection between employees and the organization.
Upskill Managers: Invest in developing managers with the natural ability to inspire and engage employees. Equip them to provide clarity, regular feedback, and accountability in an evolving work environment.
By focusing on these areas, organizations can rebuild employee engagement, ensuring both individual and organizational success despite broader economic challenges.
Who Is Responsible for Employee Engagement?
To identify the root causes of disengagement, leaders should focus on the behaviors exhibited by their most engaged employees and ask, “What are these individuals doing differently?”
Gallup, a leader in engagement research, has identified specific patterns among highly engaged employees:
Resilience: They don’t let obstacles become excuses for inaction or diminish their performance.
Strength-Focused: They focus on their natural talents, prioritizing areas where they excel rather than struggling with tasks that don’t align with their strengths.
Proactivity: They take deliberate steps to improve their engagement, proactively seeking solutions instead of waiting for external intervention.
Accountability: They own their performance and avoid blaming others when outcomes don’t meet their expectations.
Is Engagement Solely an Employee Responsibility?
While it’s clear that engaged employees take initiative, the question arises: why not simply teach all employees to adopt these behaviors? Why involve executives or assign engagement responsibilities to managers?
The answer lies in the organizational hierarchy. Engagement starts at the top, with leadership shaping the conditions for managers to foster engagement within their teams. Without executive support, even the most committed managers will struggle to create a culture of engagement.
The Role of Managers in Employee Engagement.
Research from Gallup shows that managers account for 70% of the variance in team engagement. A manager’s leadership style determines whether they foster or hinder engagement:
Coaching Managers: These managers empower employees to leverage their strengths and tackle challenges. They foster a collaborative relationship where employees actively seek guidance, support, and advocacy. This approach nurtures engagement by encouraging discretionary effort and self-motivation.
Transactional Managers: These managers adopt a “give-and-take” approach, where employees are expected to meet specific demands in exchange for rewards. This style can lead to learned helplessness, discouraging employees from taking initiative and fostering dependency on managerial intervention.
Why Coaching Outperforms Bossing.
The difference between coaching and traditional managing lies in the level and type of involvement:
Individualization vs. Generalization: Coaching managers tailor their approach to each employee’s unique needs, strengths, and circumstances. In contrast, traditional managers apply a one-size-fits-all approach, which can stifle engagement.
Empowerment vs. Dependency: Coaches create an environment where employees feel empowered to make decisions and solve problems independently. Bosses, on the other hand, establish a culture of reliance, where employees need constant oversight to navigate challenges.
The impact of these managerial styles is significant. Coaches cultivate a high-performing, self-motivated workforce, while transactional managers risk disengagement and diminished accountability. This underscores why leaders at all levels must embrace the responsibility of fostering engagement to build thriving, productive teams.
