As we step into 2026, employers across the UK are facing a stark reality: employee engagement - a key driver of productivity, retention and organisational health - was critically low in 2025, and the ripple effects are measurable on both national and global economies.
📉 Engagement: a growing concern in the UK
Nationwide studies show the UK workforce’s engagement levels lag behind global peers. In 2025, only around 10 % of British workers were considered engaged - among the lowest in Europe. (Cheeratwork, Cultureamp)
Another UK benchmark suggests a somewhat higher figure - around 65 % engaged employees - but still places the UK in the bottom 40 % of regions worldwide. (Cultureamp)This disparity highlights differences in methodology but underscores one clear trend: engagement remains a priority challenge for UK businesses.
Across Europe, research from Gallup shows engagement levels remained subdued in 2024 and 2025, contributing to broader workplace strain.
đź’· Economic impact: what low engagement costs
Low engagement isn’t an HR buzzword - it’s a billions‑pound problem for Britain.
Recent analyses suggest that low employee engagement is draining the UK economy of approximately £257 billion annually - roughly the equivalent cost of running the entire NHS for a year. (ITN, Gallup)
This figure reflects lost productivity, reduced innovation, increased turnover and disrupted service delivery - all consequences of a disengaged workforce that fails to contribute at its full potential.
Globally, the effects are equally stark. According to research aggregators, employee disengagement may have cost the world economy upwards of $438 billion in lost productivity around 2024–2025. (HRnews)
🧠What employee engagement really means
Employee engagement is more than satisfaction or happiness - it’s about emotional commitment, motivation and discretionary effort.
According to HR experts, engagement reflects an employee’s:
- Emotional investment in their work
- Sense of purpose and connection to organisational goals
- Willingness to go beyond basic job duties
- Belief in their ability to grow and contribute meaningfully
Research shows that when people feel connected to a high‑performing team, over 50 % are fully engaged, compared to far lower rates in less cohesive groups. (ADP)
In contrast, workers who feel overlooked or undervalued are far more likely to express intentions to leave: over half of undervalued UK employees plan to quit in 2026. (thehrdirector)
🔍 The UK context: stress, turnover and workforce health
Employee wellbeing and engagement are closely linked. A record rise in workplace health claims in 2024 signals rising physical and mental health burdens, which often precede disengagement and exits from the workforce.(Financial Times)
Separate reporting warns that without stronger employer focus on workforce health, the UK could lose another 600,000 workers to long‑term illness by 2035, further exacerbating disengagement and labour shortages. (theGuardian)
At the same time, turnover remains a pressing concern: average turnover rates hover above 30 % in many UK sectors, hinting at deep dissatisfaction and mobility. (HRDatahub)
đź“Š What 2026 holds: a pivotal year for engagement
Predictions for 2026 point to a critical juncture for employee engagement as organisations balance cost pressures, digital transformation and evolving employee expectations. (Inpulse)
Three key forces are set to shape the year ahead:
- AI adoption outpacing people strategies - technology alone won’t fix cultural or engagement issues.
- Skills gaps straining teams - unmet expectations lead to frustration and disengagement.
- Managerial pressure rising - overburdened leaders struggle to maintain connection with their teams.
According to commentators in the HR community, organisations that prioritise people‑centred leadership and emotional insight - not just productivity metrics - will see engagement and retention strengthen in 2026. (Inpulse)
🤝 Why engagement matters for business outcomes
Employee engagement isn’t simply “nice to have.” Research consistently shows a strong link between engagement and organisational performance:
- Lower turnover: Engaged teams experience significantly less churn. (BuildEmpire)
- Higher productivity and profitability: Active engagement correlates with measurable improvements in output and customer satisfaction. (Gallup)
- Greater resilience: Engaged employees are more adaptive to change and digital disruption.
This range of outcomes demonstrates that engagement is not a standalone HR metric - it’s a strategic business priority.
🧠The way forward: insight‑driven engagement
In 2026, organisations face a choice: continue relying on traditional survey‑based engagement metrics that reflect only outcomes, or embrace real‑time, behaviour‑anchored insights that reveal how employees feel, speak and contribute on a daily basis.
Understanding engagement through patterns, language, participation and sentiment ensures leaders are equipped to act before small issues escalate into turnover, burnout or lost productivity.
This shift - from reactive measurement to predictive understanding - will distinguish organisations that thrive in 2026 from those that struggle to adapt.
And here, tools like Ulla can help. Instead of waiting for disengagement to show up in exit interviews or burned-out employees, HR teams and managers can use Ulla’s early signals to spot patterns and act before it’s too late - not to control, but to stay aware and responsive.