Employee engagement averaged 31% in 2025, unchanged from 2024 but down sharply from the 2020 peak of 36%. The five-year decline represents approximately 8 million fewer engaged employees across the U.S. workforce. For workers under 50, the picture is even worse. Gen Z and younger millennials sit at 32% engagement, older millennials at 30%, and Gen X at 29%. Only Baby Boomers maintained their 2020 levels at 34%.
The generational divide is stark. Since 2020, younger millennials dropped 8 percentage points in engagement, while older millennials fell 9 points, which is the steepest decline of any cohort. Gen X lost 6 points. Baby Boomers didn't budge.
What's driving the collapse? Gallup's qualitative analysis points to two core failures: clarity and care. Workers across generations report the largest declines in "knowing what's expected at work" (down 9 points since 2020) and "feeling cared about as a person" (down 8 points). For younger workers specifically, the drops are even more severe: 13 points fewer Gen Z and young millennials strongly agree someone at work cares about them as a person, down from 54% in 2020 to 41% in 2025.
When Gallup asked what would help, 35% said better communication about expectations. Another 34% said supportive relationships, communication, and respect would help them feel more cared about. Only 23% mentioned pay and benefits.
Why it matters for you:
- Your under-40 talent pipeline is disengaged: When 70% of your future leaders are checked out, you're not building bench strength—you're hemorrhaging institutional knowledge before these workers even develop it. The engagement gap concentrates your retention risk exactly where you can least afford it.
- Role clarity isn't optional anymore: Less than one in five non-leadership employees strongly agree they know what exceptional performance looks like in their role. For leaders, it's still only 30%. When expectations are unclear, engagement tanks—and managers without clarity are four times less likely to be engaged themselves.
- Communication failures compound over time: Workers aren't asking for radical changes. They want transparency about company strategy, regular check-ins about their development, and consistent feedback from their managers. These are table stakes, and most organizations are failing at all three.
Source: Gallup, "U.S. Employee Engagement Declines From 2020 Peak" (January 2026)
Watch this: Companies treating 31% engagement as the "new normal" are normalizing that two-thirds of their workforce doesn't care. Gallup's data shows the gains made over the prior decade—in role clarity, development, and day-to-day experience—have not just stalled but reversed. Younger workers are particularly vulnerable because they're earlier in their careers and more dependent on clear expectations and development. When you fail at basic communication and respect, you lose them first.
The contrarian play: Stop measuring engagement and start fixing the specific breakdowns. Your employees already told you what they need: better communication about expectations (35% said this would help most) and feeling respected and cared about (34%). While your competitors run another engagement survey and do nothing with the results, you can redesign your manager-employee communication cadence, clarify performance standards at every level, and train managers to actually give a damn about their people. The companies that reverse these declines in the next 12-24 months will dominate talent retention through 2030.