Employee disengagement is often discussed as if it begins with the employee.
Someone stops participating. Their energy changes. They contribute less. They become quieter in meetings, less responsive to new ideas, or more focused on doing only what is required.
Organizations may respond with an engagement survey, a recognition campaign, a wellness initiative, or another message about culture.
But what if disengagement is not primarily an employee-attitude problem?
What if it is the predictable result of how work has been designed, how managers have been selected, and how much organizational pressure has been placed on the people responsible for holding teams together?
That is the larger issue behind the estimated $10 trillion in annual productivity loss associated with low global employee engagement. The number is enormous, but the more important question is what is creating that loss.
The evidence points toward a widening disconnect between what organizations expect from managers and what managers are realistically equipped to deliver.
Engagement has moved backward
Global employee engagement reached 23% in 2022 and remained there in 2023. It then declined to 21% in 2024 and 20% in 2025.
A percentage-point decline may sound small until it is translated into people. According to the analysis presented in The $10 Trillion Disconnect, every one-percentage-point drop represents approximately 21 million workers becoming less connected to their organizations.
This is not simply a matter of people feeling less enthusiastic about work.
Engagement affects discretionary effort, collaboration, problem-solving, customer service, knowledge sharing, retention, and an organization’s ability to implement change. When engagement declines across millions of workers, the impact spreads far beyond individual performance reviews.
It becomes an economic and organizational capacity problem.
The steepest decline is happening among managers
The decline has not affected every part of the workforce equally.
Individual-contributor engagement remained relatively stable, moving from 20% in 2022 to 19% in 2025. Manager engagement fell much more sharply, from 31% to 22% during the same period.
That difference matters because managers influence the daily experience of nearly everyone beneath them.
They translate organizational decisions into practical expectations. They clarify priorities, address performance concerns, distribute work, manage conflict, communicate change, support development, and respond when employees begin to disconnect.
Organizations often talk about managers as though they are simply another employee group. Operationally, they function more like connective tissue.
When the management layer weakens, the effects travel through the organization.
A disengaged employee may reduce the effectiveness of one role. A disengaged manager can affect an entire team.
Organizations flattened structures without redesigning the work
Many companies have reduced management layers to lower costs, simplify reporting relationships, and create faster decision-making.
In theory, a flatter organization can improve communication and reduce unnecessary bureaucracy.
In practice, removing management positions does not automatically remove the work those managers were performing.
The work usually moves somewhere else.
Remaining managers inherit larger teams, broader responsibilities, more administrative tasks, and greater pressure to execute organizational priorities. They may be expected to coach employees, manage performance, handle operational work, support retention, communicate leadership decisions, lead change, and introduce new technology at the same time.
The span of control expands, but the manager’s capacity does not.
This is where organizational flattening becomes less of an efficiency strategy and more of a transfer of pressure.
The organization may appear leaner on paper while the remaining management structure becomes increasingly fragile.
Managers are carrying both operational and human demands
Management work has always involved competing priorities, but the current role is particularly difficult because managers are expected to operate in two different systems simultaneously.
One system is task-based. It includes deadlines, productivity expectations, budgets, compliance requirements, schedules, reporting, and measurable results.
The second system is human. It includes motivation, trust, conflict, development, psychological safety, communication, recognition, and the different needs of individual employees.
Neither system disappears when workloads increase.
Managers are still expected to deliver results while supporting the people responsible for producing them. When organizations increase execution demands without removing other responsibilities, the human side of management is often the first thing squeezed out.
One-on-one meetings become shorter or less frequent. Development conversations are postponed. Feedback becomes reactive. Managers spend more time processing work and less time understanding what is happening within their teams.
Later, the organization may interpret the resulting decline in engagement as an employee problem.
It is often a capacity problem that began much earlier.
AI adds another layer of contradiction
Organizations are also asking managers to lead employees through rapid technological change.
Managers may be expected to encourage AI adoption, explain how new tools will affect work, address resistance, identify useful applications, and help employees build confidence.
At the same time, many workers are concerned that AI could reduce or eliminate their roles. The deck highlights particularly high levels of concern within finance, insurance, and technology.
This creates a difficult contradiction.
Managers are expected to champion a transformation that some employees fear, even when the managers themselves may not have received enough training, information, authority, or support to explain what the transformation means.
Technology adoption is not only a technical project. It is a trust and communication project.
Employees want to know:
- Why is the organization introducing this technology?
- How will their responsibilities change?
- What skills will they need?
- Will the organization invest in helping them adapt?
- Are decisions being made with them or simply announced to them?
Those questions cannot be answered by a software rollout plan. They require credible leadership close to the work.
If managers are already overloaded and disengaged, they are unlikely to become effective champions of change simply because the organization adds AI adoption to their objectives.
Disengagement does not always lead to resignation
Organizations often use turnover as the most visible indicator that something is wrong.
But disengagement does not always end with an employee leaving.
The external job market affects how disengagement appears.
When employees believe there are strong opportunities elsewhere, disengagement may create flight risk. People disconnect and leave.
When employees feel less optimistic about the job market, they may remain in place while reducing effort, initiative, and psychological investment. The organization retains the person but loses part of their contribution.
This is sometimes described as quiet quitting, but the label can oversimplify the problem. It focuses attention on what the employee has stopped giving without examining what the organization may have stopped providing.
In a weak labor market, low turnover can create a false sense of stability.
People staying does not necessarily mean people are engaged.
A disconnected organization cannot respond well to disruption
Engagement is frequently treated as a culture metric. It is also a measure of organizational readiness.
A connected workforce is more capable of sharing information, adapting to new expectations, solving unexpected problems, and working across departments.
A disconnected workforce is slower and more brittle.
That becomes especially important during market disruption, restructuring, technological change, or rapid growth. Those moments require employees to understand the direction, trust the people communicating it, and contribute beyond the narrowest definition of their jobs.
Organizations cannot expect resilience from a workforce that has been steadily disconnected from decision-making, development, and meaningful support.
The weakness may remain hidden during ordinary operations. It becomes visible when the organization is asked to carry something heavier.
Rebuilding engagement starts with the manager experience
The usual response to declining engagement is to focus on employees. A more useful starting point may be the manager experience.
Three areas deserve particular attention.
Select people for management capability
Technical expertise and strong individual performance do not automatically translate into management ability.
Organizations need to evaluate whether potential managers can communicate, exercise judgment, give feedback, develop others, manage conflict, and create clarity.
Promotion should not be the only available reward for a high-performing employee. When management becomes the default next step, organizations may lose a strong specialist and gain an unprepared manager.
Redesign the role, not only the structure
Reducing management layers without examining workload, decision authority, administrative burden, and team size is not genuine organizational redesign.
It is subtraction.
A serious redesign asks what work is essential, who should own it, what can be simplified, and what managers need to stop doing if they are expected to lead effectively.
Span of control should be based on the complexity of the work and the needs of the team, not only on a preferred ratio.
Equip managers to lead change
Managers need more than information about a new initiative.
They need context, practical tools, decision-making authority, time to communicate, and opportunities to raise concerns before they are expected to answer employee questions.
This is especially important during AI adoption. Managers cannot create confidence if they are receiving incomplete information at the same time as everyone else.
The real cost is lost capacity
The $10 trillion figure captures lost productivity, but the larger loss may be harder to calculate.
It includes ideas that are never offered, problems that are noticed but not raised, employees who stop stretching themselves, managers who no longer have time to develop people, and organizations that become less capable of responding to change.
Engagement cannot be repaired through messaging alone.
It is shaped by how work is structured, how decisions are made, whether managers have realistic capacity, and whether employees experience development, communication, and support as part of the work rather than occasional initiatives.
Organizations do not strengthen engagement by asking people to care more.
They strengthen it by building a system worth caring about.