What: The latest Gallup report reveals that falling manager engagement is the primary driver of a global productivity decline — arriving at the same moment AI is reshaping how organisations expect work to get done

Why it is important: For retailers, the finding is specific: management quality, not technology spend, determines whether AI adoption improves performance. The data from 2025 show the gap clearly.

The Gallup “State of the Global Workplace” 2025 report highlights a critical inflexion point for organisations worldwide, as global employee engagement has fallen to 21%, with manager engagement dropping even more sharply. This decline is particularly concerning given the simultaneous acceleration of AI and digital transformation across industries, including retail. The report identifies managers as the linchpin of team engagement, noting that 70% of team engagement is attributable to the manager’s influence. However, managers themselves are increasingly disengaged and experiencing declines in well-being, especially among younger and female leaders. The consequences are significant: disengaged managers lead to disengaged teams, resulting in lost productivity, increased absenteeism, and higher turnover. Gallup estimates that if global engagement were maximised, it could add $9.6 trillion to the world economy. The report calls for urgent investment in manager training, effective coaching, and ongoing development to reverse these trends. Ultimately, the findings underscore that the future of work—and retail competitiveness—depends on empowering managers to harness AI’s potential while maintaining strong human connections.

IADS Notes: The Gallup report’s findings on declining global engagement, particularly among managers, and the urgent need for leadership-driven transformation are strongly echoed in recent retail industry analyses. Throughout 2025 and early 2026, sources such as BCG, Forbes, and Gallup have consistently highlighted that while AI adoption is widespread in retail, only a minority of companies—about 10%—have managed to scale these solutions effectively, with leadership engagement, workflow redesign, and systematic upskilling emerging as critical success factors (Jan 2026, Mar 2026, Jul 2025). The persistent gap between digital ambition and operational reality is underscored by the fact that just 36% of retail workers feel prepared for AI-driven change, despite 72% using AI tools regularly. Regional differences in engagement and job market perceptions, as detailed in the Gallup report, are mirrored in retail, where adaptive workforce planning and skills-based talent management are increasingly vital for resilience. Furthermore, the decline in employee engagement and wellbeing is directly linked to productivity and profitability challenges, with recent Gallup and Retail Bulletin analyses warning that detachment and burnout threaten both customer satisfaction and long-term business performance (Feb 2026, May 2025). Ultimately, the convergence of these findings demonstrates that the future of retail will depend on visionary leadership, robust management practices, and a balanced approach to AI integration that prioritizes both technological innovation and human potential.

State of the Global Workplace - 2026 report