Manager engagement is eroding worldwide just as organisations lean on people leaders to deliver artificial intelligence strategies and protect workforce wellbeing, according to a recent report. This poses risks in productivity, change adoption and retention at the team‑leader level.
Since 2022, manager engagement has dropped by nine points, with the steepest annual fall between 2024 and 2025, when it slid from 27% to 22%, according to Gallup’s State of the Global Workplace 2026 report. Global engagement overall fell to 20% in 2025, its lowest level since 2020 and down from a peak of 23% in 2022.
Low engagement cost the world economy about US$10 trillion in lost productivity last year, or 9% of global GDP, according to the report. Gallup concludes that managers once enjoyed an “engagement premium” but are now “increasingly only as engaged as those they lead,” raising questions about succession pipelines and the sustainability of current leadership models.
Why are managers’ engagement levels falling?
Gallup’s report points to several structural and role‑based pressures that help explain why managers’ engagement is falling. The research links sharp regional declines to organisational flattening and reduced numbers of management roles.
In South Asia, Gallup notes that manager engagement dropped by eight points in 2025, “the largest decline of any region,” while “the percentage of managers in South Asia also declined, suggesting that employers are cutting management roles.” With “fewer managers in place, team sizes are likely to grow,” and a separate Gallup study finds that “manager engagement declines with larger spans of control,” even though talent and training can offset the effect.
The report also emphasises that managers are being asked to lead AI adoption without always having the capabilities or support to do so. Gallup stresses that “managers play a critical role in meaningful AI adoption,” and identifies manager‑led support as one of the two top drivers of frequent AI use. Yet “less than a third of U.S. employees in organizations that have begun implementing AI technologies strongly agree their manager actively supports their team’s use of the technology,” pointing to a gap between expectations and what managers feel able to deliver.
Gallup adds that “few managers have natural management talent, and many have not received the training they need to successfully coach teams and individuals toward high performance,” suggesting that inadequate development is undermining their effectiveness and engagement. The report also highlights the emotional toll of leadership roles. When Gallup compares leaders, managers, project managers and individual contributors, it finds that higher levels of leadership report more engagement and better life evaluation, but also much worse daily emotional experiences.
Leaders are “substantially more likely to report experiencing a lot of stress (+7 points), anger (+12), sadness (+11) and loneliness (+10) the previous day” than individual contributors. At the same time, “leadership also offers little upside in terms of positive emotions,” with leaders less likely to say they smiled or laughed a lot or experienced enjoyment. Gallup concludes that “engagement reduces the emotional burden of leading others and significantly boosts thriving,” finding that engaged managers experience all negative emotions at lower rates and are 14 points more likely to be thriving than the average leader.
Canada Post and Air Canada have both cut managers from their workforce.
AI, wellbeing and regional pressures
The engagement slide is unfolding as employers pour resources into AI. In the report’s foreword, Gallup CEO Jon Clifton writes that “the technology works” but that “those gains are not showing up in the bottom line.” He cites an MIT study finding that 95% of organisations saw no measurable impact on profits from roughly US$40 billion in enterprise AI investment, and a separate executive survey in which 89% reported no effect on labour productivity.
Clifton points to managers as the missing link between AI capability and business results. “In organizations investing in AI, the strongest predictor of employee adoption, aside from technical integration, is whether their direct manager actively champions it. Even the most sophisticated neural network cannot overcome an indifferent team leader,” he writes.
Gallup’s Q1 2026 U.S. workforce survey identifies the top two drivers of frequent AI use as effective technical integration and manager‑led adoption.
Employees who strongly agree their manager supports AI are 8.7 times more likely to strongly agree that AI “has transformed how work gets done in their organization,” and 7.4 times more likely to say AI gives them “more opportunities to do what they do best every day.”
The report also links manager engagement to wider trends in wellbeing and job confidence. Globally, the share of employees who are “thriving” rose in 2025 for the first time in three years, edging up from 33% to 34%. However, leaders and managers report worse daily emotional experiences than individual contributors, saying they are more likely to feel stress, anger, sadness and loneliness on any given day.
Previously, one HR manager shared with HRD Canada tips on remote-first success.
Canada and the U.S.
Regional data show that Canada and the United States remain among the highest‑engagement regions, at 31% compared with the 20% global average.
Yet job‑market sentiment there has deteriorated sharply: the share of employees saying it is a good time to find a job has fallen from 70% in 2019 to 47% in 2025, leaving the region “second-to-last in regional job market rankings.”
Employee engagement levels by region (Gallup State of the Global Workplace 2026):
| Region | % Engaged (2025) | Change vs 2024* |
| United States and Canada | 31% | 0 |
| Latin America and the Caribbean | 30% | -1 |
| Southeast Asia | 25% | -1 |
| Post‑Soviet Eurasia | 25% | -1 |
| Australia and New Zealand | 21% | 0 |
| South Asia | 21% | -5 |
| Sub‑Saharan Africa | 19% | 0 |
| East Asia | 18% | 0 |
| Middle East and North Africa | 14% | 0 |
| Europe | 12% | -1 |
| Global average | 20% | -1 |