Organisations face a crisis of engagement. The answer may be staring us in the face.
4-minute read
That was the conclusion from Gallup’s annual state of the global workplace survey, the results of which were published last week. Since 2023, employee engagement levels have fallen some 15%, to just one in five of the workplace being engaged. In Gallup’s words, we are facing “a slump in employee engagement.”
When leaders in the C-suite are tempted to look the other way, the evidence suggests that they will soon pay the price. It seems the contagion is spreading and according to Gallup currently costs businesses some $10tn.
And those organisations whose scores are still holding up against the trend shouldn’t be complacent. A slump in engagement tends to happen slowly, and then quickly. The danger? Most businesses don’t see it happening; until it’s too late. One day, employees seem engaged. The next, discretionary effort has evaporated.
The conditions that spread the virus
A senior HR leader we spoke to described ‘quiet quitting’ as a virus. It may lie dormant but can spread rapidly under the right conditions.
So, what are those conditions? If we look at the overall picture the answer may not be too difficult to fathom; and therefore the solution to plummeting employee engagement may be hiding in plain sight.
First, we need to understand what’s really happening here. Since 2009, levels of employee engagement have been significantly and steadily increasing, with each year up to 2023 improving on the last. This, in some ways, makes the drop off since 2023 even more alarming.
A turning point
So, what was it about 2009? The year approximately marks the point when the employee engagement argument was won.
This period marked a wider shift in how organisations thought about performance and people. In the wake of the Global Financial Crisis, many businesses were forced to do more with less, exposing the limits of purely structural or process-driven efficiency.
Since the mid-1990s, industry had been in thrall to a management theory known as Business Process Re-engineering, in which management consultants colluded with C-Suite leaders to “shake-up” the organization. This cultivated a mindset in which middle managers, who tended to hold the tacit knowledge of the organization, were seen as ‘blockers’ who just didn’t ‘get it.’
In reality, Business Process Re-engineering tended to destroy value, while earning big fees for consultants. As a result of the financial crisis, there was little continued appetite for hubristic fads and a desire to be more grounded and get back to basics.
At the same time, firms like Gallup and Great Place to Work were publishing increasingly robust longitudinal data linking employee engagement—and, crucially, the quality of line management—to productivity and profitability. What followed was a quiet revolution: Far from being characterised as the sponge layer or the sediment layer, the line manager started to be recognised as a vital resource at the heart of the organisation – the shaper of the culture, to be supported and invested in.
Fast forward to 2026
Fast forward to 2026, and it’s a different story. Since the pandemic that trend has been reversed. As the Chief People Officer of a major Tech firm told us:
“Since the pandemic there is a clear sense now that there is far less investment money around. Now, as a result, the focus is almost entirely on outputs, deliverables and things that lead directly to profit. CEOs are much more concerned about delivering success in the market in the near term than creating a nice place to work.”
According to a McKinsey report, in late 2021, the only training that saw increased investment in the years immediately following the pandemic was training that directly supported digital transformation, data analytics and technical competencies. The indications are that this trend continued into the following years.
A lag indicator
And given that the effect of cutting investment generally shows up as a lag indicator, the dip that feeds through at around 2023 backs up this hypothesis. Put simply, we cut investment in developing line managers, we pay a price.
Positive deviance
If we want to understand how to fix a problem, it helps to look at those organisations that are still getting it right. This is the principle of positive deviance: study the few who buck the trend.
A small number of organisations continue to report engagement levels of 70% or more. What do they do differently?
According to Jim Harter, Gallup’s chief scientist for workplace management, the answer is strikingly consistent: they invest, systematically and persistently, in their line managers.
Just a handful of line-manager behaviours
Our landmark survey with YouGov last year, Stop and Reverse Quiet Quitting, analysed responses from a representative sample across all UK industry sectors. It identified that just a handful of line-manager behaviours explain the majority of the variance in engagement. Listening; talking things through; inviting ideas and input and showing an interest in the employee’s strengths.
The great news is that the smartest organizations are beginning to reinvest in these soft leadership skills for their line-managers. We are seeing a return to in-person training, with bespoke programmes, in which participants are coached and challenged. These organizations will see the benefits feed through. Those who aren’t, are likely to, in Warran Buffet’s immortal metaphor, be caught swimming naked when the tide goes out.
To find out how we can help leaders in your organisation to be more impactful, influential and persuasive visit www.threshold.co.uk
