Why Engagement and Trust Are Sliding & What To Do About It Now
If you lead a business today, you're paying close attention to the environment in which you’re operating, scanning everything from geopolitics to the economy to technology (hello, AI). In that context, smart leaders are paying close attention to their talent and culture agenda, and with good reason.
At the very moment you’re asking people to navigate restructuring, collaborate across boundaries, adopt AI, and stay focused on customers, a specific set of risks is building inside organizations: falling engagement, stretched managers, and a more anxious, divided workforce, which is exactly the opposite of what supports that agenda. The latest Gallup State of the Global Workplace Report, coupled with Edelman’s 2026 Trust Barometer, paints a picture that the most proactive leadership teams want to get ahead of.
What the Data Are Telling Us
It’s easy to say “we’re fine,” but looking at the global data is a useful reality check. No organization is fully immune to what’s happening in the broader landscape, and the trends are moving in a different direction than many leaders assume.
Gallup’s 2026 report shows global employee engagement has declined for the second year in a row, dropping to 20% (that’s 1 in 5 employees) from a high of 23% in 2022. That three-point decline translates into significant impact: Gallup estimates that low engagement cost the world economy approximately $10 trillion in lost productivity last year, about 9% of global GDP.
Three patterns are particularly relevant for organizations:
Manager engagement is eroding. Manager engagement has fallen from 31% in 2022 to 22% in 2025, eliminating the “engagement premium” managers used to have over individual contributors. When your managers are just as disengaged as their teams, they can’t carry the weight of AI rollout, reorgs, or growth mandates. In practice, that means the very people you rely on to translate strategy, model energy, and steady the organization are operating with the same low commitment and depleted bandwidth as everyone else, which could make change feel like something being done to them, not something they are leading.
AI’s promise is hitting a human ceiling. In organizations that have implemented AI, 65% of U.S. employees say AI has had a positive impact on their personal productivity, but only 12% strongly agree it has transformed how work gets done. Leaders in multiple countries report a similar pattern: widespread AI use, minimal impact on labor productivity so far. (For more on the leadership role AI presents, see my last blog post.)
Anxiety is high, especially around jobs. Globally, perceptions that it’s a good time to find a job remain below pre‑pandemic peaks, and in U.S. organizations with AI already in use, nearly a quarter of employees believe their job could be eliminated within five years due to automation or AI. The concern is even greater in sectors like technology, insurance, and finance.
Only 20% of employees are engaged, and manager engagement has fallen to 22%. What does that mean for your strategy and goals?
The 2026 Edelman Trust Barometer report shows:
Trust in "my employer" is high, but trust beyond that is fragile. Employees continue to say they trust their own employer more than other institutions, even as 70% of people report they are hesitant or unwilling to trust someone who is different from them in values, information sources, problem‑solving approaches, or background.
Income‑based trust gaps are widening. High‑income respondents show a 16‑point higher Trust Index than low‑income respondents, with even larger gaps in some markets. That means senior leaders and frontline employees often experience very different levels of trust in institutions, which shapes how they hear the same messages and interpret the same decisions.
70% of people say they are hesitant or unwilling to trust someone who is different from them.
McKinsey’s State of Organizations 2026 report adds important context, noting that organizations are trying to sustain performance “at a time of tech innovation, economic disruption, and changing workforce expectations” and highlighting three forces that are fundamentally reshaping companies: technology disruption (especially AI), intensifying economic and geopolitical disruption, and workforce shifts.
These findings echo what the World Economic Forum’s Global Risks Report 2026, which describes an “age of competition,” that is, a world where countries are increasingly using economic tools as weapons, societies are becoming more polarized, and AI‑related risks are rising, reshaping the environment every organization must navigate.
The macro data point to a set of risks that are not going away and in some cases are intensifying, even as a few indicators, like overall wellbeing, show modest improvement.
The next question is how these patterns are showing up inside your organization.
A quick diagnostic: Is this showing up in your world?
If you want to know whether these macro patterns are already in play in your organization, start with a few straightforward questions:
Have you looked at your manager scores lately?
Are manager engagement and 360 results flat or declining, even when overall engagement looks “fine”? And to what extent are you seeing comments that suggest managers have quietly given up on things changing and don’t believe anyone really cares or will act on feedback?What do your change initiatives look like below the steering committee?
Are AI and transformation programs technically on track while day‑to‑day behavior barely shifts? Are people using the tools but not rethinking how work actually gets done?Where is friction quietly growing?
Are you seeing more “us versus them” language between functions, sites, or regions? Are there obvious stress and strain points across teams that haven’t (yet) become formal complaints, but keep surfacing in skip‑levels, Slack/Teams threads, or exit interviews?How are your leaders really doing?
Gallup and other large-scale studies note a common pattern is emerging: leaders are reporting higher stress, anger, sadness, and loneliness than individual contributors, even as they’re expected to carry more of the change load. Does that match what you’re hearing in your one‑on‑ones and at offsites?
If any of these feel familiar, it’s important to dig in. That’s what it looks like to be intentional about your people and culture and not leave the achievement of your organization’s strategic goals to chance.
How We Read the Data (Without the Drama)
At Malida Advisors, we treat reports such as those from Gallup and Edelman as inputs. We study the data, look at trends over time, and then ground them in the realities our clients live day to day.
We avoid inflammatory language when a clear‑headed reading will do.
We distinguish between signal and noise.
We put numbers in context: industry, size, geography, and the specific inflection points your organization is navigating.
It also means we won’t minimize real risk.
When the data point to issues that will cost you talent, momentum, or trust if left alone, we will say so directly and help you move at the right pace.
Our focus is on practical, sustainable solutions. Not overreacting to every headline. Not underreacting to emerging patterns or risks.
We help you see the landscape clearly, understand what it means for your organization, and act decisively and with urgency where warranted, without unnecessary drama.
Why this deserves your attention now
When you already know there’s a pattern and choose not to act, it won’t stay contained. It mushrooms. With people as your largest investment, letting disengagement and distrust run unchecked is effectively choosing slower execution and higher risk, rather than clearing the path for your strategy to succeed.
Reason 1: Engagement as a leading indicator for change outcomes
Gallup’s work makes a simple but important point: engagement is a measure of readiness for change. In the AI era, productivity gains depend not just on the tools you deploy, but on how effectively individual workers and teams actually use them. Disengaged teams undercut those gains; actively disengaged teams can create security and reputational risks.
Gallup’s long‑standing meta‑analyses show strong relationships between engagement and business‑unit outcomes like productivity, profitability, and safety, and in this report, they note that low engagement is linked to weaker performance and lower economic growth. PwC's 2026 Global CEO Survey reinforces the same pattern from the top: despite heavy AI investment, only about one in eight CEOs say AI has delivered both cost and revenue benefits so far, underscoring that technology alone is not closing the gap.
If you are asking people to absorb AI, restructuring, or new go‑to‑market strategies, low or declining engagement is not a background issue. It is an early warning indicator that your plans will stall.
Waiting does not keep things “neutral.” It means you proceed with high‑risk changes on top of a shaky foundation.
Reason 2: Insularity hardens over time
It’s important to recognize that Edelman’s insularity data has real operational implications and goes far beyond social commentary. When 7 in 10 employees say they are hesitant or unwilling to trust colleagues who differ from them, it shows up as slower decision-making, more escalation, and workarounds that never reach you until something breaks.
Edelman also finds that people with an insular mindset are significantly more likely to hold a strong sense of grievance, believing the system is rigged, that business and government serve a select few, and that their own prospects are deteriorating.
That combination of low trust across differences plus rising grievance does not resolve on its own. If anything, it gets reinforced by every difficult change you implement without enough attention to how people experience it. And it doesn’t just affect how people feel; it directly undermines creativity and collaborative problem‑solving. When employees are hesitant to trust or even engage with colleagues who think differently, it becomes much harder to move the needle on anything that requires cross‑functional cooperation: AI adoption, restructuring, or new go‑to‑market strategies all stall if people don’t actually want to interact with one another.
Reason 3: Today’s patterns become tomorrow’s trajectory
The most important thing about these trends is not where they are today, but where they’re pointed. Engagement, manager health, trust, and insularity all tend to move gradually until they hit a tipping point, and by then, course‑correction is harder and more expensive.
If you don’t intentionally intervene, a few things become more likely over the next 12–24 months:
Discretionary effort keeps shrinking. When only one in five employees is engaged, and managers no longer have an engagement premium, you should expect fewer people to stretch, volunteer, or stay late for the hard problems — exactly the behaviors that power AI adoption, transformation, and growth.
Change fatigue hardens into cynicism. If leaders keep asking for “one more change” without addressing the foundations of engagement and trust, people stop believing that this time will be different. They comply just enough to get by, but they don’t truly re‑learn how they work.
Your “good” people quietly recalibrate. High performers and high‑potential leaders are often the first to feel the tension between what you say you value and how work actually feels. They may not leave immediately, but they start taking calls, hedging their bets, and mentally moving from “builder” to “bystander.”
None of this looks dramatic in a single quarter. It shows up as slightly slower execution, slightly more politics, slightly less creativity, until one day, a missed target or a cluster of regretted exits forces a more urgent response.
With people and culture, what you don’t reset, sets.
With people and culture, what you don’t reset, sets. Addressing engagement, manager capability, and trust now is less about fixing a single problem and more about intentionally shaping your trajectory, so that the way your people feel about their work supports your strategy instead of blocking or slowing it down.
What acting now can look like (without boiling the ocean)
Acting now does not mean launching ten new programs at once. It means being deliberate about a small set of moves that directly address what the data are telling us and doing them in a way that fits your context, not a generic playbook.
For most mid‑market and large‑enterprise clients we work with, that looks like:
Will we truly equip our managers, or assume they’ll “figure it out”?
This is about whether managers get targeted support that’s tied to real transformations, or are left to navigate AI, restructuring, and new expectations largely on their own.Are we willing to do the real alignment work with the executive team?
This means deciding whether your senior leaders will actually align on direction, decision rights, and leadership standards (including how they show up together in front of the organization) or stay in a pattern of one‑off messages and events.How intentionally are we using the trust employees still place in “my employer”?
This is where you choose between relying on high‑level messaging versus creating honest, two‑way forums where leaders are transparent about change and are seen listening, translating, and adjusting in real time.
None of this is about perfection. It’s about deciding whether you want to design these moves thoughtfully with the right partners in the room, or hope they emerge piecemeal and add up in the right way.
How Malida Advisors supports leaders on engagement and trust
At Malida Advisors, we work with executive teams, senior leaders, and HR organizations who see these patterns emerging and want to respond in a thoughtful, sustainable way.
Our work typically focuses on three things:
Executive and senior‑team alignment on direction, decision rights, and leadership standards so the organization moves in a coherent way, your stakeholders experience a consistent, credible leadership voice, and people see their leaders modeling how to lead through complexity and growth.
Leadership development that is grounded in real work, not abstract competencies, combining group programs and 1:1 coaching to build practical skills in feedback, conflict, and change leadership, so leaders can translate strategy into day‑to‑day expectations and conversations.
Team and culture work that builds practical habits around trust, feedback, and conflict, focused on the day‑to‑day behaviors that make it possible for people to work across differences and stay engaged, even when the stakes are high.
In all of this, our goal is the same: to help you build leadership, team, and culture capabilities that are self‑sustaining, not dependent on us. We want your leaders and teams to have the clarity, skills, and confidence to keep moving forward long after a given engagement wraps.
Next step: examine your organization’s signals
If you’re seeing some of the patterns in this article, such as manager engagement sliding, AI and change initiatives moving on paper but not in behavior, “us versus them” dynamics across teams, or senior leaders quietly running on fumes, then this is the moment to be curious (and not complacent) about what acting now could look like in your world.
If you’re preparing for major initiatives in the next 12-24 months and want a clear, honest view of how engagement, manager capability, and trust are helping or hindering your plans:
Schedule a working session to explore your organization’s current signals before your next offsite, board meeting, or project milestone.
Start a conversation with Malida Advisors at hello@malidaadvisors.com or visit malidaadvisors.com to explore executive team alignment, leadership development, and team effectiveness support tailored to organizations like yours.
Reports referenced in this article:
Edelman Trust Institute. (2026). 2026 Edelman trust barometer: Global report: Trust amid insularity. https://www.edelman.com/trust/2026/trust-barometer
Gallup. (2026). State of the global workplace report 2026. https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx
Krivkovich, A., Klinger, D., Maor, D., & Guggenberger, P. (2026). The state of Organizations 2026. McKinsey & Company. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-state-of-organizations
PwC. (2026). PwC's 29th CEO survey. https://www.pwc.nl/en/insights-and-publications/themes/economics/ceo-survey.html
World Economic Forum. (2026). The global risks report 2026. https://www.weforum.org/publications/global-risks-report-2026/?gad_source=1&gad_campaignid=22228224717&gbraid=0AAAAAoVy5F7GbJ7j89m2q9gm6dU_tf_KA