What’s causing a drop in employee engagement?

We’ve been through a lot in the past few years—a global pandemic, climate disasters, ongoing social unrest, geopolitical conflict and war, rising inflation, and an economic downturn.

With the world in a seemingly perpetual state of crisis, it’s no surprise that people are having trouble getting things done at work. The world’s billion-strong knowledge workers are a smart and ambitious bunch, doing their best to carry on despite the loss of certainty and stability in the world. But it’s taking a toll and people are struggling.

Engagement levels are low, and the disengagement is manifesting itself through trends like the Great Resignation followed by “quiet quitting” and Bare Minimum Mondays. People are not only disengaged, but increasingly also disillusioned about work. They’re rethinking their priorities and renegotiating their relationship to work in general.

To gain a better understanding of the forces at play, we surveyed over 2,500 knowledge workers from around the world to find out what’s causing the disengagement and disillusionment affecting our global workforce. We asked how they’ve been affected by the multiple crises of the past few years—from COVID-19 to the war in Ukraine to the cost-of-living crisis. We asked about their priorities, what’s affecting their focus at work, and what worries or preoccupations are weighing them down.

After analyzing the data in detail, we’re excited to share our findings in Who gives a shuck? An Oyster report on employee disillusionment. Whether you’re a company executive, People professional, or team manager, the insights and employee perspectives in this report will help you better understand the challenges confronting today’s knowledge workers—and how companies can help.

Employees are struggling

“I worry too much because of war, Covid, inflation, rent increase. I am too anxious.” – Survey respondent

First things first: it’s clear from the survey data that people are having trouble focusing at work. Specifically, 54.4% of knowledge workers said their ability to focus at work had been affected over the last previous 12 months, with 9.9% saying it was “very much” affected.

That’s over half of the workforce struggling to get their work done, which is alarming. It tells us that the events of the wider world are not something people are simply able to shrug off. No wonder that employee engagement is in a state of crisis as people are preoccupied with other things.

So what kinds of preoccupations are we talking about? When asked about the factors most impacting their ability to focus at work, knowledge workers reported that the rising cost of living, the pandemic, and economic uncertainty were their top external stressors.

“I think my main concern now is just how drastically the cost of living has gone up, and how that affects my stress level.” – Survey respondent

Another stressor that stood out was personal worries or concerns, which affected about three out of four respondents. It’s hard to know what exactly is causing a high level of personal worries, but it’s entirely possible that it’s connected to external stressors like the cost-of-living crisis.

Mental health is the top priority

“I started caring more about my mental and physical state. I thought that career would be the most important for me but that turned out to be less important.” – Survey respondent

If people are struggling and stressed out, it’s only natural that it’s affecting their mental health. This might explain why nearly half of our survey respondents (49.7%) chose mental well-being as their #1 priority in life, followed by relationships with friends, physical well-being, and religious/spiritual beliefs. Career advancement, on the other hand, ranked a distant #5.

“After the pandemic I realized so much more was important to life than just working ourselves to death. So yes, work is less important and family, hobbies, and mental health are my main priorities now.” – Survey respondent

Perhaps it’s a post-pandemic effect, but it’s clear that people are prioritizing their emotional, physical, and spiritual well-being over climbing the career ladder. This is especially true for younger workers, with 51.6% of Gen Z respondents choosing mental health as their top priority, compared to 44.8% of Gen X. Broken down by race, 58.4% of Black professionals prioritized mental well-being above all else, compared to a low of 37.7% of Asian respondents.

Financial worries are a major preoccupation

“Mainly, please raise our pay. Inflation is killing us.” – Survey respondent

Among the external stressors affecting people’s ability to concentrate on their work, financial concerns turned out to be the most prominent. Three out of four respondents (74.6%) said that the rising cost of living has made it hard for them to focus on their work. This comes as no surprise given that inflation and the cost-of-living crisis has been hitting people hard around the world.

Once again, there are generational and racial differences in the data. Black workers are disproportionately impacted by the cost-of-living crisis and the threat of an economic downturn, especially compared to their white peers. Across age groups, Gen Z and Millennial workers are almost twice as affected by rising living costs when compared to Gen X.

“Working seems less and less worthwhile with the cost of living skyrocketing. I barely make enough money to cover my bills and expenses, and the chance of saving any significant money at the end of the month is basically zero. Inflation is drastically outpacing my wages. What am I working for? What's the point?” – Survey respondent 

With soaring inflation and a looming recession, people are starting to wonder what the point is of working so hard if they still can’t make ends meet. 

What can companies do to improve engagement and retention?

So what can companies do in this situation? Obviously, you can’t prevent global crises or change macroeconomic conditions. But you can certainly pay attention to your people and do your best to take care of your team. And if you want to meet people where they are, this report on employee disillusionment is a great place to start because it not only uncovers the causes of disengagement, but also what companies can do better in terms of culture and benefits.

For instance, 75.2% of respondents told us that taking time off is essential to their well-being. So be proactive about encouraging your team to take time off. If mental health is the #1 priority for your workforce, try to support mental health and well-being at an organizational level. The better you take care of your team, the more likely they’ll be able to cope with external pressures and contribute meaningfully to your mission.

For more insights and analysis, be sure to download the full report here. And if you’re wondering how you can improve employee engagement and retention, we’ll be hosting a special panel discussion on April 12 where you can learn from People experts at Kona, Plumm, and Oyster about how to build a positive workplace culture.