It’s no secret that motivated workers, and their discretionary efforts, are the secret to consistent performance and above-average profits. Yet despite this fact, employee engagement continues to decline worldwide.
In DHR’s 2026 Global Trend Report, just 64% of workers describe themselves as very engaged — down from 88% in 2025. Engagement is only slightly higher in North America (67%) and Europe (68%). Gallup’s recent numbers are less stark, but U.S. engagement levels are still on par with pandemic-era lows. The two reports highlight similar causes: less professional development, more stress and burnout, and weaker relationships with managers.
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The bright spot in these lackluster reports? The protective influence of a strong workplace culture. Employees who work in healthy environments report consistently high engagement, despite increasing job pressure and uncertainty.
As Jim Harter, chief scientist of workplace management and wellbeing at Gallup, writes, “When you equip your managers with the right skills and your culture supports them, you can improve employee engagement and performance. This remains true even during economic uncertainty and difficult conditions.”
Collaboration and workplace synergy
High-performing teams are built by engaged employees who prioritize trust, communication and psychological safety. They are more likely to encourage one another, contribute ideas freely and work toward collective success. This focus on teamwork and mutual support leads to better communication, fewer misunderstandings and more efficient teams.
Josh Haymond, managing partner of Vaco Raleigh, a U.S.-based talent solutions company, says regular meetings with his leadership team ensure that each person has an opportunity to share observations and discuss concerns in a safe space. “There needs to be scheduled time or else it doesn’t get done effectively. We take time off the floor consistently to spend time together as a leadership group, so that we can be on the same page,” he says.
When collaboration goes well, the result is higher productivity and better decisions. But the costs of poor collaboration are serious — more than $16,000 a year in lost productivity for every manager, or roughly $874,000 a year for a 1,000-person company. Gartner found that “collaboration drag,” or inefficient cross-functional work, made teams 37% less likely to hit their revenue targets.
Productivity and business performance
Engaged employees generate 18% more in sales, and they are 14% more productive overall, irrespective of industry, location, company size or economic climate. That works out to be about one month of additional work a year. The extra effort that people invest when they care about their work compounds into big performance gains. Businesses in the top percentile for employee engagement were 23% more profitable compared to those in the bottom percentile.
The link between engagement and profits is clear when looking at the Wall Street Journal’s Management Top 250. Companies like Nvidia, Intuit, ServiceNow and Adobe are recognized for excellence across key performance indicators such as customer satisfaction, innovation, and financial strength. A shared trait among these leaders? High scores in employee engagement and development. One Intuit employee writes on Glassdoor: “Intuit is the first company that I have worked for that goes above and beyond for their employees. My leadership is truly empowering and supportive.”
Engaged employees go beyond minimum expectations and deliver stronger results. This mindset reduces rework, streamlines collaboration and drives continuous improvement across teams.
Innovation and psychological safety
Innovation requires people who are engaged, energized, and aligned to solve a problem or achieve a shared purpose. Highly engaged employees are more likely to take the initiative, come up with better solutions, and push for improvements. But even the most motivated employee will stop speaking up in an environment that punishes risk.
Psychological safety — knowing it’s safe to share ideas, admit mistakes and offer dissenting opinions — is vital for innovation. Research published in the Journal of Organizational Behavior found that when companies focus on psychological safety, their employees tend to be more creative and launch innovative products faster.
“When you’re building something that’s never been built before and has the potential to change how humanity moves, you have to empower employees and engineers to speak up about [psychological] safety and innovate in a constructive environment,” says Wei Luo, vice president of strategy, product and operations at Cruise, a self-driving car company owned by General Motors.
When psychological safety is paired with high engagement, the result is a culture of curiosity, learning and experimentation. This willingness to embrace change enables engaged employees to be more agile and adaptable in the face of uncertainty.
Resilience and a lower risk of burnout
Characterized by exhaustion, cynicism and reduced effectiveness, burnout is common in the modern workplace, especially among high-performing individuals. According to a report from Moodle, 66% of U.S. employees experienced some sort of burnout in 2025. Rates of burnout were even higher among younger workers, with 81% of 18- to 24-year-olds and 83% of 25- to 34-year-olds reporting burnout.
When organizations invest in employee engagement, they also foster workplace resilience. Engaged employees feel connected to their work, supported by their leaders and confident that their contributions matter. This sense of purpose helps them manage stress, stay focused under pressure and ask for help when needed.
Leaders play a critical role in preventing burnout, says Oliver Brecht, vice president of the Workplace Options Center for Organizational Effectiveness. An empathetic approach to leadership, offering timely feedback, and giving employees more control over how they accomplish their work can reduce the risk of burnout. When expectations are clear and workloads are manageable, employees are more likely to stay energized.
“When people know what’s expected of them — what their goals are, how to prioritize their work, how to behave and what to expect from their peers and managers as well — they feel more confident and in control,” Brecht explains. “That clarity is key to preventing burnout.”
Engagement depends on leadership and culture
When employees feel connected to their work, supported by their leaders and valued for their contributions, they show up differently. They bring creativity, commitment and resilience. They build stronger teams and deliver better service. They stay longer, learn faster and help your business navigate challenges.
It’s clear that companies with high engagement consistently outperform their peers. But engagement doesn’t happen by chance — it’s cultivated through intentional leadership and a workplace culture that puts people first.
In today’s competitive market, where top talent and innovation are key to growth, companies that invest in their people will have the edge. That’s the power — and the promise — of engagement.
Companies that get employee engagement right outperform their competitors across the board. Yet too many executives struggle to build workplaces where people feel valued, trusted, and empowered to deliver their best. For deeper insights on building engagement through purpose and connection, look for my new book, The Employee Engagement Handbook: A Leader’s Guide to People, Purpose, and Performance.
About the Author
Donald Thompson is Managing Director of the Workplace Options Center for Organizational Effectiveness, host of the High Octane Leadership podcast, and author of The Employee Engagement Handbook.