Employee Engagement in the U.S. Isn’t Just Declining – It’s Signaling Something More Structural

The World Economic Forum’s 2026 Global Risk Report warns that “an outdated social contract is diminishing trust between citizens and governments, with corporations caught in the middle.” Add rising constitutional uncertainty around immigration enforcement and the rapid deployment of AI reshaping work, accountability, and decision-making authority, and the workplace is becoming a proxy battleground for broader institutional instability.

So, here’s the critical question: will engagement rebound toward the peak levels we saw in 2020 – driven by racial justice reckoning and pandemic solidarity – or will it sink even lower than 2025’s 10-year low?

For leaders, this is no longer a matter of messaging or morale programs. The challenge is clear: navigating values at war while fostering trust, inclusion, and resilience inside organizations. When AI accelerates operational change faster than governance and trust structures evolve combined with values colliding and trust eroding, engagement becomes a leading indicator of enterprise risk – one that shows up downstream in productivity, litigation exposure, operational fragility, and reputational cost. And while the forecast for engagement is uncertain, the responsibility is undeniable.

Moreover, in an uncharted, AI-accelerated environment marked by institutional strain, employee engagement is no longer simply a culture metric – it is an organizational safety and governance issue. Trust, psychological security, and social cohesion now function as leading indicators of enterprise risk, with direct implications for performance, legitimacy, and resilience. What comes next will depend less on sentiment and more on institutional design to accommodate the future of work taking shape in a volatile external environment.

Leaders who embed organizational safety into risk management, governance, and operating models will be better positioned to stabilize engagement and protect enterprise value and balance-sheet resilience amid sustained uncertainty. Otherwise, engagement will remain on the watch list as the next systemic failure.