An Analysis of Shifting Employee-Employer Bonds Around the World
Engagement is continuing to decline globally, and managers are feeling the pinch. Gallup just reported that global employee engagement declined to 21 percent in 2024, with managers experiencing the largest drop. This marks only the second decline in engagement in the past 12 years—a worrying sign for organizations already struggling with productivity. The cost of low engagement to the global economy is USD $8.8 trillion—equivalent to 9 percent of global GDP.
As engagement declines, employee expectations are changing dramatically. The pressure to improve the employee experience is driving new regulations and considerations around the world.
- In October 2024, the UK government published its Employment Rights Bill taking a “pro-business, pro-worker” approach. The bill, which will now progress through the UK Parliament and may be amended as part of that process, includes wide-ranging proposed changes in 28 different areas which will affect employers.
- The Japanese government approved a law in March 2025 that requires companies to protect their employees from customer harassment. The bill mandates that firms establish clear rules to protect their employees from abuse following a rise in workers quitting or suffering from mental illness due to unreasonable customer demands and bad behavior.
- The work environment in the Middle East is ripe for disruption, with laws and regulations driving Middle East employment reforms. The Kingdom of Saudi Arabia will introduce new amendments to its Labor Law, and the UAE’s Abu Dhabi Global Market (ADGM) will enact new employment regulations. The Saudi amendments will also impose wider obligations on employers to train Saudi national employees and provide greater powers to the Ministry of Human Resources and Social Development to impose certain penalties for breach of the obligations under the law.
- In addition, many nations across Latin America are promoting worker advocacy. Three countries—Mexico, Colombia and Chile—are leading the way to drive significant change by introducing new regulations and reforms.
Rapid technological advancements, globalization and economic instability are raising concerns about job security, especially with the rise of Artificial Intelligence (AI). As the economy falters and record-high inflation remains, employees today—especially those in the U.S.—are no longer confident that greener pastures await them. The WEF Future of Jobs Report predicts that from 2025 to 2030, job creation and destruction due to structural labor-market transformation and the impact of AI will create 170 million new jobs. However, this growth is expected to be offset by the displacement of the equivalent of 92 million current jobs, resulting in net growth of 7 percent of total employment, or 78 million jobs.
Leadership is under pressure to move into a new era in the highly competitive market for top talent. Poorly prepared leaders and inadequate leadership can significantly impact employee well-being, productivity and overall workplace culture. That combined with the new attacks on diversity, equity, inclusion and belonging leaves employees—and their managers—with higher stress levels and burnout, leading to less-than-desirable business results. The costs of this can be staggering. It’s estimated that burnout for a company of 1,000 people in the U.S. averages a loss of $5.04 million and 800 quality-adjusted life years annually.
$5.04mm
average loss for a company per 1,000 people from employee burnout (U.S.)
These forces are pushing companies to reconsider culture and reinvent the employee experience to stay relevant and stay ahead of the curve to keep and attract talent.
Of course, just a few years ago, as the pandemic upended the workplace, fundamental tenets of the traditional employee-employer relationship were quickly reshaped, with businesses rethinking the workplace from top to bottom. From work-from-anywhere policies to wellness programs to stipends for office equipment, benefits that had never previously reached the negotiating table suddenly felt like must-haves in the war for top talent.
Now, in the current economic climate, the top concern for employees is shifting to stability and job security. Workers are committing to resilient companies focused on long-term growth over so many start-ups that have taken riskier paths. The organizations prioritizing stable and secure workplaces have an increasingly compelling pitch to employees in a world where so little feels certain. That’s why when today’s employees consider a potential employer, they see reputation and stability as the most important factors, with culture and employee wellness initiatives close behind.
This all comes back to the need for leaders to pressure test not only their strategies and structures but their cultures, too. A strong Employee Value Proposition (EVP) reflects and protects a company’s culture—ensuring it’s not to be overlooked as a critical component of business success. We’ve always encouraged clients to think about their EVPs from a bigger lens than just the transactional benefits, but in 2025, they hardly have a choice.
