The Future Cost of Low Engagement
Employers may point to a calmer labor market as a sign of stability, and internally as a sign of happy, motivated employees. Indeed, attrition overall is down, and employees appear to be staying put.
But beneath the surface, a different story is unfolding. Employees, it seems, are not staying because they are deeply engaged or fulfilled, but rather because of the risks inherent in an unpredictable market. Many, I understand from a CHRO contact, are nervous about moving in a time of uncertainty - worried about landing a new role only to be “last in, first out.”
This lack of movement has created a dangerous illusion. Employers may believe they have weathered the storm and mastered loyalty and retention. In reality, disengagement is widespread. As and when conditions shift - and confidence returns – there’s a danger that those organizations that have put People concerns on the backburner will face something of a reckoning.
Stability Does Not Equal Satisfaction
Let’s explore the labor market reality under the hood. 1 in 3 employees say their manager does not respect them, a statistic that speaks directly to low psychological safety. Meanwhile, more than 50% of workers report they cannot be their real selves at work, and fewer than half believe their company is empathetic (as compared to a much greater estimation of this from leaders…).
Such findings, and more, reveal a picture of widespread discontent that transcends any single group of employees. When employees do not feel respected and cannot be authentic, and when they believe their employer lacks empathy, diminished trust and engagement seems inevitable. In summary, then, there may be no attrition crisis today compared with ‘The Great Resignation’ earlier in the decade, but employee loyalty secretly appears to be eroding in real time.
AI Supercharges Productivity, Not Collaboration
The rise of AI at work continues to create new efficiencies, and reshape the way companies and teams operate.
There is no doubt that AI can make individuals more productive: repetitive tasks are automated, workflows are streamlined, and employees can achieve more in less time. However, this augmentation (in theory) of individual productivity doesn’t resolve the challenges inherent in collaboration. In fact, leaner teams, often enabled by AI, can serve to actually make those challenges more visible. Smaller groups amplify the importance of every relationship and every manager – and if employees do not feel respected or safe speaking up, AI cannot necessarily fill the gap.
Managers remain the single biggest driver of employee engagement. Research shows they account for roughly 70% of the variance in whether employees feel motivated. Yet, many managers feel unequipped to navigate diverse communication and working styles (indeed, more than half tell us at Uptimize that they feel they urgently need training and skills development in this realm). As teams adopt new tools and rely more heavily on each other, the risk of misalignment, friction, and burnout grows.
The Cost of Ignoring Engagement
Ignoring these risks has a price. Today, organizations are already losing productivity from employees who are present in body but do not necessarily feel sufficiently valued, engaged and motivated to consistently produce their best work. Innovation suffers when people feel unsafe to contribute. Collaboration slows when authenticity is suppressed.
Soon, the consequences may be sharper for employers than they are currently experiencing today. Whenever the labor market opens up again, employees who have felt undervalued will leave. Many of those will be high performers or members of underrepresented groups, eroding competitiveness and diversity. Attrition at scale, too, does not just impact the bottom line in terms of cost-to-replace; it also saps momentum, damages reputation, and can become a dynamic hard to shake off.
The long-term impact may be more severe still, too, with companies that have failed to properly address engagement and inclusion risking falling behind in innovation, adaptability, and talent attraction. As competitors strengthen their employee experience, meanwhile, the gap can further widen.
What Organizations Can Do Now
The answer seems not to wait until the market shifts again, but rather to act today so as not to be too late. And leaders can take several practical steps to address engagement before the risks explored here do become an uncomfortable, fast-moving reality:
Measure psychological safety regularly, not annually. Simple surveys on respect, belonging, and authenticity can highlight issues early.
Invest in managers. Equip them with tools to support different working and communication styles, and connect that directly to collaboration outcomes.
Embed inclusion into everyday work. Structured agendas, opportunities for asynchronous input, and clarity around roles can help unlock contribution from every employee.
Pair AI adoption with engagement strategies. Every new tool or workflow should be matched with actions that reinforce clarity, trust, and collaboration.
Link People investments to business outcomes. Engagement should be presented to boards not as a soft initiative but as a measurable driver of productivity, retention, and growth.
Don’t Take Your Eye Off the Ball
The workforce may look quiet, but calm waters can hide dangerous currents. Employees are staying put because the market is tough, not because they feel fulfilled. When conditions change, those who have felt unsupported or unheard will move on quickly.
Organizations that act now will have the trust, engagement, and collaboration needed to thrive alongside AI. They will retain talent when others scramble, and most importantly they will build workforces that choose to stay not out of fear, but out of genuine enjoyment and commitment.
The choice for leaders is clear. Treat today’s illiquid, quiet workforce realities as a signal to continue to invest in the Employee Experience, or assume this isn’t a priority anymore and risk paying a significant price.
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