Employee Engagement is Declining; How Office Space is the Cure

Why the right workspace is a performance multiplier

The Cost of Disengagement (it's higher than your lease)

Something’s wrong at work, and it's not just the coffee.

According to Gallup’s 2025 State of the Global Workplace, employee engagement has slipped from 23% to 21% globally, the sharpest drop since the pandemic. In the U.S., engagement is at a ten-year low, with just 31% of employees engaged and 17% actively disengaged.

Translation? Millions of people are scrolling LinkedIn between meetings, wondering why they’re still here.

This little dip in enthusiasm cost the global economy a cool $438 billion in lost productivity last year alone.

The Office Isn't The Problem; it's the solution.

Some journalists are reporting that disengagement is the by product of return-to-office policies. “Let them stay home,” the headlines cry. And yes, for many employees, remote work has been a lifeline: less time commuting, more time living. But that doesn’t mean remote is the antidote to disengagement.

The real issue isn’t where people work; it’s that they’re coming back to. Or rather, what they’re not coming back for. As revealed in. a recent 2025 McKinsey and Company report, “The working model is far less important than the work environment leaders create… Most people say their overall work experience needs improvement, even if their work arrangement is satisfactory.”

Studies including a recent story by Steelcase Global Report in partnership with Ipsos (study of 12,480 employees across 17 countries), show a direct positive correlation between workplace satisfaction and employee engagement. The report shows only 13 % of workers in that high‑satisfaction/high‑engagement cluster. 

Gen Z Isn’t Ghosting Work; they’re ghosting bad work environments

According to Gensler, only 35% of Gen Z employees say they feel engaged at work, compared to 42% of Millennials and 48% of Gen X.

Gen Z isn’t ghosting work, they’re ghosting bad work environments.

According to recent studies, a 62% of Gen Z are actively exploring new roles.

While salary and autonomy matter, many cite lack of purpose, uninspiring office spaces, and poor culture as leading reasons for disengagement and departure.

The turn?

Gen Z values environments that align with their values—places that feel thoughtful, inclusive, and energizing.

As Oliver Hall, National Chair of NextGen at the British Council for Offices, in his Financial Times letter (May 5, 2025), Gen Z isn't rejecting the office, they're challenging us to make it better. He adds,

"Gen Z's are holding out for spaces that inspire, for places that reflect their values, ignite their creativity, and support how they actually work."

The Mental Health Issue

In a major workplace mental health study by Mind Share Partners, 76% of U.S. workers reported experiencing at least one symptom of a mental health condition, and 84% say their workplace environment contributed to it.

While, in a recent Vogue article, the media labels burnout an ‘occupational phenomenon,’ Americans describe it as their daily reality.

People are tired. They're isolated. And they're craving connection, clarity, and spaces that actually support how they work and live.

Return-to-Office Mandates missing the mark (and the mood)

Mandating bodies-in-seats was intended to boost engagement. Instead, in many cases, it has created resentment.

While 87% of companies now operate in a hybrid model, those forcing full returns without a clear plan have seen crowded spaces, deflated morale, and soaring attrition. (CXApp)

According to MIT Sloan Management Review:

“There is mounting evidence that strict in office mandates damage employee engagement and increase attrition — especially among high performers and those with caregiving responsibilities.”

But the issue isn’t being in the office — it’s being in the office without a plan.

Gartner reinforces this: in a recent survey, 64% of HR leaders said mandatory in-office requirements are driving higher attrition, particularly among top talent.

In-office work fuels connection, creativity, and culture... when the environment supports it.

Without thoughtful design and intentional experience, the office stops being a catalyst for engagement… and becomes just another source of friction.

The Untapped Solution

The most innovative companies aren’t doubling down on mandates. They’re doubling down on office experience.

Take Deloitte, for example. Working with them, we eliminated excess office space and implemented a new workplace design strategy at their 115,000 SF office at Promenade II in Midtown Atlanta. Full case study linked here.

The result?

A space aligned to how people actually work — one that fosters flexibility, collaboration, and focus while supporting cost efficiency and team morale.

This is what it looks like to reimagine office space as a strategic asset.

The office isn't the enemy, it's the untapped solution.

What the Best Workplaces Get Right

Want people to come in and come alive? Give them what remote work can’t:

• Quiet zones  for deep focus

• Collaborative spaces  to spark ideas

• Natural light, plants, and views  for mental clarity

• Amenities  like cafés, wellness rooms, outdoor lounges

• Flexibility: Not everyone needs the same space every day

According to Gensler’s Global Workplace Survey, the most engaged employees don’t isolate; they learn, socialize, and interact in diverse spaces. High-functioning teams are far more likely to sit near each other  (81% vs. 50% for weak teams) and work in varied environments that suit their tasks.

Bigger isn't better. Today’s talent doesn’t care how big your office is. They care how it feels to be there.

Navigating, selecting, and designing office space isn’t about cost per square foot alone, it's about cultivating environments that drive purpose, retention, and growth. That starts by reframing real estate from overhead to opportunity.

Here's the playbook for Office Design:

• Tie space to strategy Make physical space a reflection of culture and goals

• Measure more than occupancy Include engagement, well-being, collaboration

• Design for humans Comfort, daylight, greenery, ergonomic furniture

• Make it a destination  Think high-design, hospitality, and belonging
  

Final Thought: Build the office they want to work in.

It’s not office vs. remote. It’s default vs. design.The companies that win aren’t the ones enforcing attendance, they’re the ones earning it.

In a world where disengagement costs billions and top talent is harder than ever to retain, your office could be your best-kept secret or your biggest missed opportunity.

When you design for engagement, people don’t just show up; they show up better.

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How to Stay Ahead

1. Conduct a Needs Analysis to align your real estate strategy with your business objectives. 

2. Secure and Optimize Office Location(s), Space(s), and Lease(s).

3. Maximize Profitability, Recruitment, and Retention

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Many companies lose millions of dollars due to lack of employee engagement, loss of top talent, and inefficient or unneeded office space.

Working with Gregg Metcalf, clients gain the insights, the analysis, and the plan to obtain the lease and office space that retains the best employees, attracts top talent, and maximizes productivity as well as profitability.

To Contact Gregg Metcalf:

email: gregg.metcalf@jll.com

mobile: 404.661.9284