People Element's 2026 Employee Engagement Report — 59% Engagement, a Growing AI Perception Gap, and Fragile Recovery
Talent Management / Employee Experience | 3 min read
People Element (Denver, Colorado; CEO Chris Coberly; Denver-based HR technology company providing employee survey software for mid-market organisations), has released its 2026 Employee Engagement Report — drawing on feedback from more than 94,000 employees across industries. The headline finding: employee engagement reached 59% in 2025, reflecting a modest recovery from its post-pandemic low, though the findings indicate a substantial portion of the workforce remains not fully engaged. The report identifies three primary drivers of engagement — communication and employee voice, growth and value, and leadership effectiveness — which have remained consistent across multiple years, suggesting that engagement outcomes are tied to sustained organisational practices rather than short-term initiatives.
"The data indicates that while engagement levels have improved, the recovery remains fragile. Organisations that maintain focus on employee feedback and follow-through will be better positioned to sustain progress."
— Chris Coberly, Chief Executive Officer, People Element
Four Key 2026 Workplace Trends — Manager Burnout, AI Perception Gap, RTO Tension, and the Turnover Illusion
Beyond the headline engagement figure, the report outlines four workplace trends actively shaping the employee experience in 2026. Increased manager burnout is emerging as a compounding risk — as managers carry elevated responsibility for employee experience in distributed and hybrid environments, their own engagement and capacity is under strain. A striking AI perception gap has opened between leadership and employees: 76% of executives report that their employees are excited about AI, while only 31% of employees indicate the same — a 45-percentage-point disconnect that signals significant misalignment between how leadership and frontline workers experience the AI transition. Continued return-to-office tension remains a source of engagement friction across organisations navigating evolving workplace policies. Most significantly, the report flags a declining voluntary turnover illusion: lower quit rates may obscure underlying disengagement, as employees remain in roles while reporting lower levels of motivation and connection. The report's finding is direct — retention alone may not be a sufficient indicator of engagement, and organisations may need to assess employee experience more directly rather than relying on turnover as a proxy for wellbeing.
Key Takeaways
- • People Element (Denver, Colorado; CEO Chris Coberly; HR technology for mid-market organisations; full-lifecycle employee survey platform: engagement, onboarding, stay, 360, and exit surveys; frontline-heavy industries; HRIS and payroll integrations; proprietary benchmarks; G2 High Performer) has released its 2026 Employee Engagement Report — based on feedback from 94,000+ employees across industries.
- • Headline finding: employee engagement reached 59% in 2025 — a modest recovery from the post-pandemic low, but with a substantial portion of the workforce still not fully engaged. The recovery is characterised as fragile. Three primary, multi-year consistent drivers of engagement: (1) communication and employee voice; (2) growth and value; (3) leadership effectiveness. Their consistency across years indicates engagement is tied to sustained organisational practice, not short-term initiatives.
- • The AI perception gap — the most significant finding: 76% of executives report that their employees are excited about AI; only 31% of employees report the same. A 45-percentage-point disconnect between how leadership and frontline workers experience AI in the workplace. This gap signals that organisations may be significantly underestimating employee anxiety, uncertainty, or ambivalence about AI adoption — and overestimating buy-in for AI transformation at the employee level.
- • Three additional 2026 trends: (1) Increased manager burnout — managers carrying elevated responsibility for employee experience in distributed environments while their own engagement is strained. (2) Return-to-office tension — continued friction from evolving workplace location policies. (3) Declining voluntary turnover as a misleading signal — lower quit rates may obscure disengagement, with employees remaining in roles while reporting lower motivation and connection. The report's key implication: retention alone is not sufficient as an engagement indicator.
- • People Element platform context: AI-driven analytics and action recommendations; open-ended comment summarisation using AI so HR can focus on what matters most; full-lifecycle survey coverage (engagement/onboarding/stay/360/exit); transparent pricing; proprietary benchmarks; integrations with HRIS and payroll systems. The 2026 Employee Engagement Report is available at get.peopleelement.com/2026-employee-engagement-report.