How can HR leaders turn CEO attention to falling engagement?
Global employee engagement has slumped to its lowest level in five years, but many chief executives still aren't losing sleep over the risk of a restless workforce.
Gallup's 2026 State of the Global Workplace report found that only 20% of employees worldwide were engaged at work in 2025, down from a peak of 23% in 2022 and the weakest result since 2020.
Low engagement and active disengagement together cost the world economy an estimated US$10 trillion in lost productivity last year, or around nine per cent of global GDP.
Yet evidence from Boston Consulting Group's (BCG) latest CEO Insomnia Index suggests that rising employee disgruntlement is far from a top‑tier concern in many boardrooms.
In the CEO survey, just 38% said they were "concerned" or "very concerned" about increasing levels of employee disgruntlement. The rest were only somewhat concerned (42%) or not concerned at all (20%), even as employees are ranked as one of the most stressful stakeholder groups for leaders.
The contrast points to a potentially dangerous perception gap: global engagement is sliding, but many CEOs still view it as a manageable, even secondary, risk.
A disconnect between C‑suite and frontline
In BCG's report, several CEOs acknowledged how easy it is for discontent to remain invisible at the top. Complaints tend to surface first in the lower layers of the organisation, where workers may be reluctant to escalate issues or fear consequences for speaking up.
One leader described how the board's expectations can compound that blind spot. The CEO said they are expected to care about the people first and live that mantra with their teams – but noted that the board doesn’t always share the same priorities.
The result, they said, is that they are forced into "impossible situations" where they must contradict their own people‑first messaging to satisfy demands from those "not involved in the day‑to‑day."
Such pressures make it easy for engagement to slip down the priority list, especially when CEOs are juggling more visible external threats such as economic uncertainty, AI disruption, and geopolitical risk.
Dave Ulrich, professor at the University of Michigan and an expert on HR matters, argues that this context is exactly why HR leaders have to frame "people risk" differently.
"Start the dialogue about employee morale by NOT talking about employees, but what matters most to CEOs," he told HRD, as he cited market value, customer revenue, and customer attitudes.
In his work, Ulrich has found that employee sentiment is a powerful lead indicator of customer sentiment, with strong correlations between the two. When morale erodes, customer experience and ultimately market valuation tend to follow.
"Simply stated, employee morale is a lead indicator of customer experience," he says. "Data supports it and so does personal experience."
The perception gap in the data
The feeling that CEOs and employees are living in different realities is also borne out in large‑scale employee‑experience research.
Ben Granger, chief workplace psychologist at Qualtrics, says gaps between executive perceptions and frontline experience are "more common than most leaders would like to admit."
In Qualtrics' 2026 Employee Experience Trends report, which surveyed more than 33,000 workers across 24 countries, 42% of employees said they wanted their leaders to listen more – yet only 25% said their company had actually increased listening in the past year.
"We also frequently observe massive gaps between executives and frontline workers when it comes to whether employee feedback is acted upon," Granger told HRD. "Both listening frequency and action are highly correlated with employee morale, engagement and satisfaction."
When leaders don't have systematic ways to hear from employees, they fall back on assumptions, he warns, and those assumptions often reflect the relatively privileged experiences of the people at the top, not the frustrations of workers dealing with broken processes or difficult customers every day.
Qualtrics' data also show that customer‑facing workers typically have a sharper understanding of the causes of poor customer experiences than senior leaders do.
They identify the same root causes that consumers flag in external surveys. Without deliberate listening mechanisms, Granger says, executives are "essentially operating on incomplete information and assumptions – which only exacerbates perception gaps."
What HR leaders can do now
With engagement on a downward trajectory and CEOs only moderately alarmed, HR leaders face a dual challenge: elevating the issue on the executive agenda while also showing employees that their concerns are heard and acted on.
Ulrich believes the most effective CHROs do this by drawing a straight line between engagement, the employee value proposition, and outcomes the CEO already tracks. He summarises what employees value most as "VOI2C2E":
- Vision and meaningful work
- Opportunity for impact
- Incentives
- Involvement in decisions
- Community with colleagues
- Communication
- Entrepreneurship or flexibility in how work gets done
By using analytics to link these elements to outcomes such as customer satisfaction, revenue growth or stock‑price performance, HR can move the conversation from "soft" engagement scores to hard business risk, according to Ulrich.
Granger, meanwhile, says the HR teams that successfully bridge the CEO‑employee gap are those that connect engagement data directly to the bottom line.
"They're actively looking to connect employee experience data to business outcomes that C‑suites care about: customer experience, productivity and retention," he said.
Companies such as KFC and US lawn‑care firm TruGreen, he adds, have seen measurable improvements in both customer metrics and financial performance by explicitly tying employee‑experience investments to customer outcomes.
Looking ahead six to 12 months, Granger highlights priorities for HR leaders whose dashboards are showing weak or stagnant engagement:
Protect the integrity of feedback. When bonuses or penalties are tightly linked to engagement scores, employees quickly see surveys as a compliance exercise, not a safe way to speak up.
"Employee engagement is NOT a vanity metric," Granger said. Leaders should first ensure people feel safe giving honest feedback, even if the scores dip.
Make responses visible. Often, the gap between executives' and employees' perception of action is about communication, not activity. Granger recommends that senior leaders communicate their responses to feedback multiple times across different forums, making the link between employee input and leadership decisions explicit.
Measure expectations as well as experiences. Organisations can be making objective progress – especially on hot‑button issues like DEI – but if employees’ expectations are rising faster, scores can appear flat. Capturing expectations helps leaders avoid misreading stagnant numbers as failure.
Focus on the drivers, not just the headline score. Global engagement percentages tend to move slowly, but underlying experiences such as communication quality, cross‑functional collaboration, or manager effectiveness can swing sharply year to year.
"Focusing on engagement metrics alone is akin to telling a sports team to 'go win the game,'" Granger said. "Focusing on drivers is like giving the team specific guidance on what to do in order to improve the chances of winning the game."
