What are the Levels of Employee Engagement

What are the levels of employee engagement? According to Gallup's research framework, there are three distinct levels of employee engagement that exist in every workplace: actively engaged (31% of U.S. employees), not engaged (52%), and actively disengaged (17%). Understanding these levels is critical—with global disengagement costing the economy $8.9 trillion annually in lost productivity.

People are the key to organizational success, which is why workplace engagement has evolved into a fundamental driver of business performance. High levels of engagement strengthen organizational outcomes and stakeholder value while encouraging employee retention, fostering customer loyalty, and improving satisfaction across the board. The impact of employee retention on a company's bottom line directly affects productivity, morale, and overall business performance.

Quick Answer Box:

• Actively Engaged: 31% - Passionate, productive, drive innovation

• Not Engaged: 52% - Fulfill duties but lack emotional connection ("quiet quitting")

• Actively Disengaged: 17% - Actively undermining workplace success

Employee retention is a major concern for businesses in today's rapidly evolving work environment. Are you familiar with the "war for talent"? This phenomenon describes how businesses struggle to retain top employees due to skills gaps and evolving employee expectations. Today's prospective employees evaluate not only compensation and benefits but also company values, growth opportunities, and work-life balance. In other words, you need a strong employee engagement strategy to stay competitive and win the ongoing battle for talent.

Current trends in developed countries show growing emphasis on work-life balance, flexible working arrangements, and meaningful work. Research indicates that organizations following best practices average 70% employee engagement with a ratio of 14 engaged employees for every actively disengaged one—more than seven times the U.S. average.

Understanding Gallup's Employee Engagement Framework

To evaluate changes in American workforces, Gallup launched an employee engagement tracking survey over 20 years ago. This research examined common workplace elements and grouped employees into three distinct types based on their commitment and dedication levels.

The 2024 Reality: U.S. employee engagement hit an 11-year low in 2024, with only 31% of employees engaged—down from a peak of 36% in 2020. This represents approximately 9.6 million fewer engaged workers than just four years ago. The ratio of engaged to actively disengaged employees now stands at 1.8-to-1, compared to 2.1-to-1 in 2023.

Companies leverage this three-level model to understand the importance of employee engagement and increase productivity and commitment within their organizations. Let's explore each level in detail.

Level 1: Actively Engaged Employees

Definition: Actively engaged employees are heavily invested in and passionate about their work and company mission. They want to drive organizational success through high performance and consistent productivity.

Engaged employees embody the company's 'customer first' ethos. They demonstrate leadership qualities, enthusiasm, creativity, ambition, tenacity, and a strong work ethic that elevates team performance.

Characteristics of Actively Engaged Employees:

• Proactively offer creative ideas for enhancing operations and processes

• Take initiative on projects that benefit the company's strategic goals

• Strongly support and advocate for the company's vision and values

• Demonstrate visible pride in their company and its mission

• Consistently exceed performance expectations

• Build strong bonds within teams and motivate colleagues through positive influence

• Show resilience when faced with obstacles, setbacks, and pressure

• Maintain an optimistic outlook on the business's future

• Seek continuous learning and professional development opportunities

• Act as brand ambassadors both inside and outside the organization

Recognition's Role: Actively engaged employees thrive on acknowledgment. Research shows that 84% of highly engaged employees received recognition the last time they went above and beyond. Employee recognition software like Workmates enables organizations to systematically celebrate achievements, reinforcing positive behaviors that drive engagement.

Engagement Measurement: Organizations using HR Cloud's Workmates can track engagement through participation in recognition programs, communication channels, and survey responses. Real-time analytics help identify which employees demonstrate active engagement behaviors.

Level 2: Not Engaged (Quiet Quitting)

Definition: Not engaged employees are emotionally disconnected from their work and workplace. Often referred to as practitioners of "quiet quitting," these employees fulfill their job requirements but invest minimal passion or discretionary effort.

According to Gallup's 2024 data, 62% of employees globally report being not engaged—unattached to their jobs and company. This represents the majority of the workforce in most organizations.

Characteristics of Not Engaged Employees:

• Perform the bare minimum required to maintain employment

• Rarely volunteer suggestions for improving processes or operations

• Resist change initiatives and growth opportunities

• May consistently criticize the organization or display apathy

• Decline particularly demanding tasks or stretch assignments

• Show minimal alignment with company goals and objectives

• Prefer working independently rather than collaborative team efforts

• Clock in and clock out without additional contribution

• Demonstrate low participation in company culture activities

• Lack enthusiasm for organizational mission and values

The "Quiet Quitting" Phenomenon: This modern term describes employees who aren't actively disengaged but have mentally checked out. They meet basic expectations without the engagement that drives innovation and excellence. More than 75% of employees report feeling burned out or ambivalent in their current positions, contributing to widespread disengagement.

Remote Work Impact: The shift to hybrid and remote work has intensified disengagement challenges. Employees working remotely without strong connection points are particularly susceptible to becoming disengaged. HR Cloud's mobile-first Workmates platform addresses this by providing centralized communication, recognition, and engagement tools accessible from anywhere.

Want to learn how Workmates can transform your organization today?

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Manager Influence: Manager engagement fell from 30% to 27% in 2024, with managers under 35 reporting a five-percentage-point decline. When managers disengage, their teams follow—making leadership engagement critical to organizational health.

Level 3: Actively Disengaged Employees

Definition: Actively disengaged employees aren't just dissatisfied—they're frustrated that their needs remain unaddressed. These workers potentially undermine the efforts of motivated colleagues every day.

In 2024, 17% of U.S. employees were actively disengaged, equivalent to the percentage last seen in 2014. Actively disengaged employees spread negativity and can damage team morale, productivity, and company culture.

Characteristics of Actively Disengaged Employees:

• Make it obvious through statements and behavior that they don't want to work for the organization

• Actively sabotage efforts of teams, management, colleagues, and the company

• Take credit for others' work while deflecting responsibility

• Blame poor performance on lack of resources rather than taking ownership

• Vocally complain about company issues to colleagues and external audiences

• Spread damaging information about the company outside work environments

• Resist learning opportunities and professional development

• Focus on problems rather than proposing solutions

• Refuse to participate in team collaboration

• May actively seek alternative employment while remaining in current role

The Business Cost: Employee disengagement costs the global economy $8.9 trillion in lost productivity annually—equivalent to 9% of global GDP. For individual companies, disengagement translates to reduced output, higher turnover, and damaged customer relationships.

Generational Trends: Younger employees under 35 showed five-point declines in engagement, with Generation Z experiencing a six-point drop. Notable declines appeared in clarity of expectations, recognition, and opportunities to leverage strengths.

What Factors Cause Decline in Employee Engagement?

Understanding disengagement drivers helps organizations develop targeted intervention strategies. Here are the primary factors that push employees from engagement toward disengagement:

1. Lack of Confidence in Leadership

Employee engagement strongly correlates with leadership quality. Psychologically absent leaders fail to build meaningful relationships with their teams. They don't provide adequate guidance, constructive feedback, or recognition. Many resort to micromanagement while claiming credit for team achievements.

Only 46% of employees feel clear about what's expected of them at work, down from 56% in March 2020. This clarity gap directly reflects leadership communication failures.

Three main leadership factors contributing to disengagement:

• Poor leadership skills and management capabilities

• Lack of mentorship and career guidance

• Negative working relationships with direct supervisors

Solution: HR Cloud's Perform module helps managers establish clear expectations, provide structured feedback, and track employee development—strengthening the manager-employee relationship.

2. Limited Growth Opportunities

Career advancement and professional development significantly influence whether employees stay engaged. Without training and learning opportunities, employees struggle to understand career progression paths within organizational hierarchies.

According to a Udemy survey, learning and development opportunities can increase employee engagement at work by 80%. Organizations that invest in employee development see dramatic engagement improvements.

Development areas to address:

• Skills training for current role mastery

• Leadership development for aspiring managers

• Cross-functional experience opportunities

• Clear career pathing and promotion criteria

• Mentorship and coaching programs

Solution: During onboarding with HR Cloud's Onboard, organizations can establish development plans and learning pathways that demonstrate commitment to employee growth from day one.

3. Poor Reward and Recognition Programs

When employees deliver exceptional work without acknowledgment, burnout and disengagement inevitably follow. Impersonal or ineffective recognition programs fail to move the engagement needle.

Companies with engaged employees see 21% higher profitability and 17% higher productivity than companies with disengaged workforces. Strategic recognition programs directly impact these business outcomes.

Recognition best practices:

1. Timely recognition (immediate or within 24 hours)

2. Specific and personalized appreciation

3. Alignment with company values

4. Variety of recognition types (verbal, written, tangible rewards)

5. Peer-to-peer recognition opportunities

Research shows companies with effective recognition programs have 31% lower voluntary turnover rates compared to those without such programs.

Solution: HR Cloud's Workmates recognition platform enables instant kudos, values-based recognition, and points-based reward systems—making appreciation easy, frequent, and meaningful.

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“The platform connects associates to each other in a way that doesn’t happen through email.” — Gail Gust, Director of Marketing and Business Development

4. Disregard for Employee Well-being

Employee well-being directly impacted by employee well-being. Organizations that genuinely prioritize mental and physical health create more motivated workforces.

Among actively disengaged employees, 54% experience high daily stress. Workplace stress, anxiety, and burnout require organizational attention. Companies must addressed by companies systematically to prevent disengagement.

Well-being initiatives that boost engagement:

• Mental health resources and counseling services

• Flexible work arrangements

• Wellness program offerings

• Stress management training

• Work-life balance policies

5. Discrepancies with Company Values and Goals

Cultural alignment matters. Companies seek employees who match their organizational culture, and employees choose employers sharing their values and goals.

Employees prioritizing work-life balance won't thrive in organizations with unpredictable schedules. Those valuing diversity, equity, and inclusion expect their employers to embrace these principles actively.

Alignment strategies:

• Clear communication of company values

• Demonstrated commitment to stated values

• Inclusive decision-making processes

• Transparent goal-setting and progress sharing

• Regular culture check-ins through surveys

Solution: HR Cloud's employee engagement surveys help organizations regularly assess value alignment and identify culture gaps before they drive disengagement.

6. Unsatisfactory Compensation and Incentives

Inadequate compensation creates financial stress that fuels disengagement. Employees struggling to meet financial obligations cannot fully engage with workplace activities or organizational goals.

When compensation doesn't reflect market rates or individual contributions, even otherwise engaged employees lose motivation.

Compensation factors affecting engagement:

• Below-market base salary

• Inequitable pay across similar roles

• Lack of performance-based incentives

• Insufficient benefits packages

• Unclear compensation philosophy

Solution: Regular market analysis and transparent compensation practices demonstrate respect for employees' contributions. HR Cloud's HRIS streamlines compensation management and helps ensure equitable pay practices.

How to Keep Employee Engagement High

Organizations can implement proven strategies to maintain and improve engagement levels across all employee categories:

1. Strengthen Communication and Relationships

Disengaged employees often possess great potential but feel neglected. Management must balance speaking and listening—actively soliciting employee input and addressing concerns promptly.

Only 39% of employees feel strongly that someone at work cares about them as a person, dropping from 47% in 2020. This relationship gap represents a significant engagement opportunity.

Communication improvements:

• Regular one-on-one meetings

• Open-door policies from leadership

• Town halls and all-hands meetings

• Anonymous feedback channels

• Team-building activities

Encourage employees to express concerns through multiple channels. Foster belonging and participation by creating opportunities for peer interaction and stronger workplace relationships.

Solution: Workmates creates a centralized digital workplace where employees access updates, documents, events, and recognition—strengthening daily connection and culture through mobile-first communication channels.

2. Invest in Career Development

Many employers provide limited growth and development opportunities, leading to disgruntled employees and eventual disengagement. Develop comprehensive employee development and training strategies that help employees advance careers and learn new skills.

Only 30% of employees believe someone at work encourages their development, down from 36% in 2020. This development gap represents urgent priority for engagement improvement.

Development initiatives:

• Skills training programs

• Leadership development tracks

• Cross-functional projects

• Mentorship pairings

• Educational assistance programs

• Conference and workshop attendance

3. Provide Recognition and Rewards

Express gratitude for employee efforts and contributions to re-engage your workforce. Employee engagement and recognition programs are crucial for boosting morale and improving performance.

You don't need expensive programs. Simple gestures make significant impacts:

• Thank-you notes for specific contributions

• Public acknowledgment in team meetings

• Employee of the month honors

• Peer-to-peer recognition systems

• Small gift cards or experiences

Solution: Employee recognition software like Workmates makes acknowledging hard work effortless. Digital kudos, values-aligned badges, and reward catalogs create systematic appreciation that drives engagement.

Recognition statistics:

• 37% of employees rank recognition as their top motivator

• Companies with strong recognition see higher retention and productivity

• Peer recognition creates culture of appreciation

Want to learn how Workmates can transform your organization today?

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4. Seek Regular Employee Feedback

Ask questions to understand what motivates employees and how employee engagement can be strengthened. Learn through multiple feedback mechanisms:

• Employee engagement surveys - Measure engagement levels and identify improvement areas

• Exit interviews - Understand why employees leave and what could have retained them

• Pulse surveys - Quick check-ins on specific topics or recent changes

• Anonymous suggestion boxes - Safe channels for honest feedback

• Online company reviews - External perspective on employer brand

Regular employee retention surveys provide valuable insights into satisfaction factors and loyalty drivers. Track long-term trends and measure initiative impact through annual comprehensive assessments.

Solution: Workmates includes built-in survey capabilities that make regular feedback collection effortless. Launch pulse surveys, track participation, and analyze results through integrated analytics.

5. Provide Flexibility

Employees increasingly choose flexible and work-from-home options over traditional 9-to-5 schedules. Consider offering flexible hours policies and remote work options when business needs allow.

Flexibility often proves more effective than annual bonuses for engagement. Employees with schedule control demonstrate higher efficiency, happiness, and dedication to company goals.

Flexible work arrangements:

• Hybrid work schedules

• Remote work options

• Flexible start/end times

• Compressed workweeks

• Results-based work expectations

6. Review Pay and Benefits

Uncompetitive compensation and poor benefits make employees feel disrespected and disengaged. Conduct comprehensive analysis of all remuneration aspects:

• Base salary benchmarking

• Performance bonuses

• Time off policies

• Health benefits

• Retirement contributions

• Wellness program benefits

The link between comprehensive benefits and employee retention is significant. Competitive packages often determine whether employees stay or seek opportunities elsewhere.

Solution: HR Cloud's HRIS centralizes compensation data, tracks benefit utilization, and helps ensure equitable treatment across the organization.

Measuring Your Organization's Engagement Levels

Beyond understanding the three engagement levels, organizations need systematic approaches to measure and track engagement over time.

Engagement Measurement Methods:

1. Annual Engagement Surveys - Comprehensive assessments using validated question sets

2. Pulse Surveys - Quick 3-5 question check-ins on specific topics

3. eNPS (Employee Net Promoter Score) - Single-question loyalty metric

4. One-on-One Meetings - Qualitative feedback from direct conversations

5. Exit Interviews - Understanding disengagement reasons when employees leave

6. Participation Metrics - Tracking involvement in recognition, events, training

7. Performance Data - Correlating engagement with productivity outcomes

8. Absenteeism Rates - Monitoring attendance patterns as engagement indicator

9. Turnover Analysis - Examining voluntary departure trends

10. Recognition Activity - Measuring appreciation frequency and participation

Solution: Workmates provides comprehensive engagement analytics that track participation across communication, recognition, and surveys—enabling data-driven engagement strategies.

The Role of HR Technology in Boosting Engagement

Modern HR technology platforms play crucial roles in moving employees from disengagement to active engagement. Integrated solutions provide tools addressing multiple engagement drivers simultaneously.

HR Cloud's Engagement Solution:

Workmates - The Frontline-First Employee Experience Platform:

• Recognition & Rewards: Instant kudos, peer recognition, and customizable reward catalogs

• Communication Hub: Company announcements, team channels, and social feeds

• Surveys & Feedback: Pulse surveys, eNPS tracking, and sentiment analysis

• Mobile-First Design: Native apps ensuring frontline and remote employee access

• Analytics Dashboard: Real-time engagement metrics and participation tracking

Onboard - Engagement from Day One:

• Automated workflows that accelerate time-to-productivity by 60%

• Preboarding portals that engage new hires before their start date

• Buddy systems and team introductions that build early connections

• Culture immersion content that reinforces values alignment

People HRIS - Foundation for Engagement:

• Centralized employee data enabling personalized experiences

• Self-service portals empowering employee autonomy

• Automated workflows reducing HR administrative burden

• Org charts and directories facilitating connections

Perform - Continuous Development:

• Goal tracking aligned to company objectives

• Continuous feedback replacing annual reviews

• Development planning for career growth

• Performance recognition tied to business outcomes

Industry-Specific Engagement Considerations

Different industries face unique engagement challenges requiring tailored approaches:

Healthcare:

• Frontline workers needing mobile-accessible engagement tools

• Shift workers requiring flexible communication channels

• High-stress environments demanding robust well-being support

• Compliance-heavy workflows benefiting from automation

Manufacturing:

• Production floor employees often lacking desk access

• Safety recognition programs critical for engagement

• Skills training essential for advancement

• Team-based recognition for collaborative achievements

Technology:

• Rapid change requiring continuous learning opportunities

• Remote-first cultures needing strong digital connection

• Project-based work benefiting from goal tracking

• Innovation recognition encouraging creative contributions

Retail:

• High-turnover environments requiring quick onboarding

• Part-time and seasonal workers needing inclusion

• Customer service excellence tied to engagement

• Store-level recognition driving location pride

Solution: HR Cloud's modular approach allows organizations to configure engagement strategies matching industry-specific needs and workforce characteristics.

Conclusion: Taking Action on Engagement Levels

Employee disengagement affects organizations globally. Without strategic intervention, it becomes an epidemic undermining productivity, culture, and business results.

The current reality demands action:

• U.S. engagement at an 11-year low with only 31% of employees engaged

• The ratio of engaged to actively disengaged employees now stands at just 1.8-to-1

• Global disengagement costs $8.9 trillion annually in lost productivity

Regardless of disengagement causes, organizations must initiate re-engagement processes. When businesses understand engagement consequences, they're more likely to implement initiatives boosting engagement and reducing turnover.

There's no quick fix for increasing engagement. However, there are clear steps to identify probable disengagement reasons. With the insights provided here, you can accelerate progress by building stronger relationships, developing knowledge programs, implementing recognition systems, and gathering continuous feedback.

Developing comprehensive employee recognition strategies proves crucial for talent retention and positive work environments. By focusing on appreciation, satisfaction, and rewards, companies significantly improve employee productivity and performance.

Start Your Engagement Transformation:

Modern workforce challenges require integrated solutions. HR Cloud's comprehensive platform combines engagement, onboarding, HRIS, and performance management—providing everything needed to move employees from disengagement to active engagement.

Schedule a demo of Workmates to see how centralized recognition, communication, and analytics can transform your employee experience and drive measurable business results.

Experience how Workmates can transform communication and strengthen culture—all in one powerful platform

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Frequently Asked Questions

1. What is employee engagement and why is it important?

Employee engagement refers to the emotional commitment employees have toward their organization and its goals. It's critical for improving productivity, retaining top talent, and driving business success. Companies with engaged employees see 21% higher profitability and 17% higher productivity.

2. What are the three levels of employee engagement?

Gallup classifies employees as actively engaged (passionate and productive), not engaged (fulfilling duties without emotional connection), and actively disengaged (actively undermining workplace success). As of 2024, U.S. workplaces show 31% actively engaged, 52% not engaged, and 17% actively disengaged.

3. What causes low employee engagement?

Common causes include poor leadership, limited growth opportunities, lack of recognition, inadequate compensation, and misalignment with company values. Recent research shows significant declines in clarity of expectations (down to 46%), feeling cared about (39%), and development encouragement (30%).

4. How can organizations improve employee engagement?

Effective strategies include strengthening leadership communication, offering career development, recognizing employee achievements, providing flexibility, and conducting regular feedback surveys. Integrated platforms like HR Cloud's Workmates provide tools addressing multiple engagement drivers simultaneously.

5. What is the 'war for talent' in HR?

The "war for talent" describes intense competition among companies to attract and retain top-tier employees in markets with limited skilled candidates. Organizations must offer competitive compensation, growth opportunities, strong culture, and meaningful work to win this ongoing battle.

6. How does poor leadership affect employee engagement?

Leaders who micromanage, fail to communicate effectively, or don't show appreciation contribute significantly to employee dissatisfaction and disengagement. Manager engagement itself declined from 30% to 27% in 2024, demonstrating how leadership challenges cascade through organizations.

7. What role does recognition play in employee engagement?

Recognition—whether through simple thanks or formal programs—boosts morale, increases motivation, and reinforces positive behaviors. 37% of employees rank recognition as their top motivator, and companies with effective recognition programs have 31% lower voluntary turnover rates.

8. Why do employees disengage even if they are paid well?

Compensation alone doesn't guarantee engagement. Factors like career growth, meaningful work, recognition, strong leadership, and positive workplace culture play vital roles. Employees need to feel valued, heard, and connected to organizational purpose beyond just financial rewards.

9. What is "quiet quitting" and how does it relate to engagement levels?

"Quiet quitting" describes employees who fulfill minimum job requirements without extra effort or emotional investment—corresponding to Gallup's "not engaged" category. This group represents 62% of employees globally, making it the most common engagement level.

10. How do you measure employee engagement levels?

Organizations measure engagement through annual surveys, pulse surveys, eNPS scores, one-on-one meetings, exit interviews, participation metrics, performance data, and absenteeism rates. Workmates provides integrated engagement analytics tracking these metrics in real-time.

Author Bio:

Alex Shvarts is the CEO of FundKite, one of the fastest-growing FinTech companies in New York that provide funding to small businesses across the U.S. Founded in 2015, Alex’s business utilizes a boutique funding style, offering business owners a flexible variety of products and services that can be tailored to fit their individual financial situations. Prior to founding FundKite, Alex engineered and sold proprietary technology to the greater FinTech industry.