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A happy, engaged manager makes for a happy, engaged team. 

That was one of the takeaways written in bold in Gallup’s latest State of the Global Workplace report, which examines workers’ mental health and well-being. The thumbs up was great news for companies teeming with engaged managers. But for the rest of the workplace, the report card was not so rosy. 

Overall, Gallup found that global employee engagement stagnated in 2023 and employee well-being declined. A mere 23% of employees reported being engaged with their jobs, which was the same as the previous year, while 62% reported being “not engaged” — three points higher than 2022. Meanwhile, 41% of employees reported feeling “a lot of stress” and 20% said they experienced loneliness daily.

In particular, younger workers have been struggling. Twenty-two percent of employees under 35 said they experienced daily loneliness, compared with 19% of those above 35. Fully remote employees were significantly more likely to feel lonely (25%) than those who work fully onsite (16%). And workers in South Asia (29%) were most likely to feel lonely. 

The toll of all this is enormous. Aside from the human suffering (which is not to be minimized), Gallup estimates that low employee engagement costs the global economy $8.9 trillion, or 9% of the global GDP. 

What can your company do to improve the health and productivity of your employees and create an environment where people are actively engaged? For successful approaches and more insights from Gallup, read on.

If you want more engaged employees, focus on empowering managers

Being a manager has always been hard. Since the pandemic, it’s become even harder. Managers are still trying to figure out how to oversee employees in remote and hybrid environments. And there’s now an increasing number of employees having mental health problems. The need for managers to inspire employees has become more urgent than ever. 

Gallup found that only three in 10 managers around the world are engaged — meaning that they feel involved and enthusiastic — in their jobs themselves. So, the chances that they’ll engage and improve the well-being of their employees are low. 

This is especially true in countries such as France, the U.K., and Germany where there’s low overall engagement (13%) and where, the report notes, there is a “work-to-live” culture. Meanwhile the highest levels of engagement are in the United States and Canada (33%), which both have more of a “live-to-work” ethos. 

Gallup’s decades of research into effective management has found certain qualities that set great managers apart: They build ongoing relationships with employees that are grounded in respect, positivity, and employees’ unique gifts. They also help employees find meaning and reward in their work. 

But managers are feeling stressed out now too. While they report higher rates of thriving — due to higher pay and social status — they experience just as much stress and loneliness as nonmanagers. And they’re more likely to report feeling daily anger, sadness, and worry. Managers are also more likely than nonmanagers to be looking for a new job. 

So, if you want to increase workplace engagement, Gallup says, prioritize making managers’ jobs as streamlined, engaging, and fulfilling as possible. 

Follow the example of best-practice organizations to inspire and engage managers 

The good news is that in best-practice organizations across industries and geographical regions, three-fourths of managers and seven in 10 nonmanagers are engaged.

The even better news is that many of the organizations identified by Gallup as best-practice organizations did not start out that way. Rather, their leadership made an intentional effort over several years to increase engagement. Let’s look at how they did this: 

They put a high priority on manager hiring and development. The best organizations hired managers that had a talent for engaging their teams and they trained their managers to become effective coaches who consistently give employees meaningful, individual feedback that help them become better performers.They integrated engagement into every stage of their employee and manager life cycle. These companies made engagement a business strategy that informed how they hire, onboard, coach, and develop talent. They also included it in performance management, goal setting, team meetings, and manager-employee conversations. In other words, they worked on creating cultures steeped in engagement. They emphasized well-being at work and in life. Best-practice organizations made their support for employee well-being visible and consistent. Many of them employed well-being counselors or coaches.They also went beyond physical health to include financial literacy and planning support; hosted webinars on mental health; and encouraged community volunteerism. 

Final thoughts: When employees are engaged, companies thrive too

The best news to come out of the Gallup report is that when organizations increase their employee engagement, business outcomes improve too. 

Companies with highly engaged teams experience 78% lower absenteeism, 17% higher productivity for sales, and 23% greater profitability. They also have significantly lower attrition.

While all of this matters, one statistic stands out: Employees at organizations with high engagement are significantly (68%) more likely to experience well-being. As the report notes, having a great job gives people hope. It’s hard to put a dollar amount on that. To employees, it’s worth its weight in gold. 

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