The State of the Workplace in 2026: Our thoughts on Gallup’s latest report

Every year, we find ourselves coming back to the latest release of Gallup’s State of the Global Workplace report. We’ve found over the years it gives us one of the clearest, most consistent signals on what’s actually happening inside organisations at scale.

In this blog, we share our thoughts on some of the key insights and some patterns that are getting harder to ignore.

What is the Gallup State of the Workplace report… and why do we care?

Gallup’s report is one of the most comprehensive longitudinal datasets on the employee experience globally. Each year, it draws on:

• Data from 100+ countries

• Insights from hundreds of thousands of employees

• A consistent methodology that allows for true year-on-year comparison

In a world where employee sentiment shifts quickly and where new “trends” emerge almost weekly, Gallup gives us a stable, long-term view of how people are actually experiencing work.

At Nine Yards, we love to pick it apart each year because it helps us cut through the noise of hot trends, sense-check what we’re seeing with clients on the ground and identify where perception and reality might be differing.

What stood out to us this year?

There are plenty of stats in the report, but a few insights really stood out.

1. Engagement has stalled and is now declining

The 2026 report highlights only 20% of employees globally are engaged. That means 4 out of 5 employees are either checked out or actively disengaged.

This is the second consecutive year of decline, which suggests something more structural than a post-pandemic reset.

Australia sits at 21% engagement, broadly in line with the global average. Which might sound fine, but for us begs the question “how can we do better?”

2. The cost of disengagement is massive

Gallup estimates that low employee engagement is costing the global economy close to $10 trillion USD each year in lost productivity. Equivalent to around 9% of global GDP.

It’s a staggering figure and a stark reminder that culture and experience aren’t just people and culture priorities, they’re direct levers of organisational success (something we explored in our recent thinking on culture as a commercial asset). When culture is misaligned or underdeveloped, it doesn’t just impact how people feel, it shows up in how organisations perform.

3. Stress remains stubbornly high

Around 40% of employees globally report experiencing daily stress, and while that has stabilised slightly, it remains above pre-pandemic levels.

On the surface, organisations may still be seeing performance hold. But underneath, many employees are operating with reduced capacity, managing higher levels of cognitive load, fatigue, and pressure. It’s certainly a common theme we’re hearing across our community too. 

The risk is that over time, sustained stress impacts decision quality, resilience, and the ability to adapt – all of which are critical to performance in today’s environment.

In Australia, stress levels are significantly higher than the global average, with around 50% of Australian employees reporting daily stress.

4. Managers are the pressure point

One of the clearest insights in the report is around the role of managers.

• Manager engagement is declining

• Expectations on managers are increasing

• Their impact on team engagement remains disproportionately high

It reinforces what we already know – that the biggest impact on a team's experience is managers. With ongoing capacity and system design issues impacting managers, it’s no surprise their engagement is declining and having a direct impact on their teams.

Managers are being asked to do more than ever before: drive performance, lead change, support wellbeing, navigate ambiguity, and translate strategy into action. Often simultaneously, and often without the clarity, support, or headspace to do it well.

It’s something we explored in our recent thinking on a leadership recession, where the demands of leadership are outpacing the way we’re equipping and enabling leaders to succeed. When they’re also responsible for the experience of others – the impact is amplified and impacts culture and performance across the organisation.

5. Hybrid work isn’t the silver bullet (but poor design is the problem)

Flexible work models are generally linked to better wellbeing outcomes.

But the report also highlights:

• Poorly designed return-to-office approaches are negatively impacting experience

• Employees in “remote-capable but forced onsite” roles are seeing the biggest drops

So it’s not about where people work – it’s about how intentionally work is designed.

How does this compare to other research?

When we look at the research from other organisations like Culture Amp and the World Economic Forum, we’re seeing the same themes emerge again and again.

The “experience gap” is real

• Culture Amp points to gaps in clarity, feedback, and leadership capability

• Gallup shows the outcome is low engagement and high disengagement

It might be different lenses, but it tells us the same story. Employees are not consistently experiencing work in the way organisations think they are delivering it.

Work is evolving faster than leadership capability

The World Economic Forum talks about:

• AI transformation

• Skills-based organisations

• New ways of working

Gallup adds a critical layer – those structural changes are not yet translating into a better day-to-day employee experience.

The middle manager squeeze is universal

Across all major research managers are more critical than ever, but also more stretched than ever

They’re being asked to lead change, coach performance, support wellbeing and deliver results. Often without the capability, capacity, or clarity to do so effectively.

Wellbeing is now a performance lever

There’s increasing alignment that wellbeing is not separate from performance – it underpins it.

And yet, many organisations are still treating it as an “initiative” rather than a design principle.

So what? The Nine Yards perspective

If we step back, the story isn’t just about engagement scores or wellbeing metrics.

It’s telling us we are redesigning work faster than we are redesigning leadership and experience, and that gap is really starting to show. Many organisations are doing more for their people than ever before, but employees aren’t feeling it.

For us, this means the answer isn’t more initiatives or perks, and it’s not another engagement survey.

It’s getting back to the foundations:

• Clarity in how work gets done

• Capability in how people are led

• Intentional design of the day-to-day experience

If you think we can help you and your team with any of these, please reach out!