Imagine this: Your top managers are overwhelmed, your teams are engulfed in negativity, and financial metrics are under strain. This is the harsh reality confronting firms worldwide. Recent research warns of a looming leadership crisis that could overshadow the Great Resignation.
Manager engagement has plummeted to 27%, a significant three-point fall in just a year, sending shockwaves across companies, as per a comprehensive study by coaching platform meQuilibrium, based on a survey of 5,477 working adults and Gallup research.
For the second time in over a decade, employee engagement is declining, with the most striking drop not among entry-level staff but from the very leaders crucial for inspiration and performance, the report reveals.
Brad Smith, chief science officer at meQuilibrium, serving clients like GE Aerospace, JPMorgan Chase, and Paychex, has observed that managers show the steepest engagement declines, experiencing “alarming levels” of stress and burnout. This, he notes, can “negatively impact employee engagement, motivation, productivity, and turnover within their teams.”
The financial stakes are monumental. Full engagement of the global workforce could unleash $9.6 trillion in productivity—tantamount to a 9% increase in global GDP. Under current conditions, however, these potential gains disappear as disengaged managers struggle to lead effectively.
The message for HR leaders is clear. Organizations that decisively support their leadership while building resilience can emerge stronger from current workplace disruptions. The research suggests it’s imperative to prioritize management’s well-being, cultivate emotional intelligence organization-wide, and enhance empathetic leadership skills.
What’s fueling this crisis? The research points to a blend of factors creating a “VUCA” environment—volatility, uncertainty, complexity, and ambiguity. Key characteristics include:
– **Widespread pessimism.** 67% of employees feel worse about the national situation, with 35% feeling negative about their jobs. Additionally, nearly half expect worsening conditions, perpetuating a cycle of declining morale.
– **Uncertainty-related stress.** High uncertainty more than triples the rate of pessimistic workplace views, with nearly one in three employees experiencing significant burnout symptoms.
– **Employee disconnect.** Over half of employees exhibit some disconnect symptoms from work, teams, or organizations, and those severely disconnected report a 66% drop in productivity.
A notable issue is the perception gap within organizations. While 42% of employees report suffering from uncertainty-related stress, 63% think their colleagues are affected, suggesting stress levels are systematically underreported, complicating HR’s understanding of workplace health.
This isn’t affecting everyone equally. Gen Z employees and government workers face the most disillusionment, highlighting the inadequacy of one-size-fits-all solutions.
Despite this, the research identifies effective measures against workplace chaos, like emotion regulation, optimism (with awareness of workplace volatility), and empathetic leadership.
“In a world defined by volatility and ambiguity, building resilience is no longer optional—it’s essential,” Smith states. “Our research shows that skills such as emotion control and empathetic leadership can protect employees from the harmful effects of uncertainty and pessimism. Even during turbulent times, we can prepare people to succeed.”
Louis Carter, founder of Most Loved Workplace, notes that corporate optimism won’t necessarily counter corporate pessimism—“only clear, grounded leadership that rebuilds relationships and connection” will. “Give people tangible wins they can control. Help them set small, meaningful goals connected to purpose—not just productivity. When people see progress, their perspective shifts.”
“The solution isn’t about mood. It’s about meaning, feeling in control of one’s life, and connection to the whole,” he concludes.