In the wake of the Great Resignation of 2021 and 2022, companies are now facing a new challenge in 2025, dubbed the Great Detachment. Economic challenges and efforts to control inflation have led to fewer job opportunities, resulting in employees being more hesitant to leave their jobs. While this might seem like good news, it comes with a significant downside: record-breaking levels of low employee engagement.

The Not-So-Hidden Costs of Low Employee Engagement

Despite the decrease in turnover rates, employee engagement has reached an 11-year low.¹ Research shows that employees who are not quitting their jobs are not necessarily happier, more productive, or engaged. Many are actively looking for new opportunities. Gallup reports that employees are seeking new job opportunities at the highest level since 2015.

The costs of low engagement are clear: lower productivity, higher absenteeism, less innovation, and a staggering loss of $8.8 trillion annually across the globe.²

Employers who fail to recognize and reward their employees, invest in their development, and prioritize their well-being will likely experience higher turnover. Conversely, employers that proactively cultivate a culture of recognition, appreciation, and well-being are more likely to retain their top talent and keep their existing employees productive and engaged.

Low Levels of Employee Engagement and Well-Being Have Costly Consequences

Prioritizing employee well-being is no longer a nice-to-have; it is essential. Many companies have had to tighten their purse strings and scale back on hiring additional employees and resources, leading to current employees feeling the brunt of additional responsibilities and tasks. This results in lower engagement, lower productivity, and, ultimately, lower profits.

Burnout is soaring, with 43% of employees feeling burned out and 37% so overwhelmed that it impacts their ability to work effectively.³ Employee engagement remains at an all-time low of just 23% globally.⁴ Employees are also stressed about their job security and pay, with inflation outpacing most employees' salaries, causing many to struggle with the rising costs of living.

Employees' Expectations Have Shifted

To keep up with the rising costs of living, most employees want sufficient salary increases. Unfortunately, many companies cannot afford to pay what employees want, and some have halted annual salary bumps altogether. In addition to raises, employees also want and expect more flexibility and vacation time. However, data shows that these preferences have declined year-over-year. Employers need to find new and innovative ways to make their employees feel appreciated.

Most Companies Miss Opportunities to Keep Their Employees Engaged

Only 38% of respondents said that their company has a rewards and recognition program. Investing in rewards and recognition could save companies a significant amount of money by helping to build a strong company culture, retain talent, and keep employees productive and motivated. The cost of replacing an individual employee can range from one-half to two times the employee's annual salary. Lost productivity costs U.S. businesses a shocking $1.8 trillion every year.⁵

Give Small, More Frequent Rewards to Keep Employees Engaged All Year Long

Employees want recognition and rewards more frequently. Though employees often expect a holiday reward at the end of the year, this is no longer enough to keep them engaged and motivated. Four out of ten employees want more frequent recognition, rewards, and incentives, and six out of ten want to receive recognition at least monthly. Companies do not need to spend a lot to keep employees happy. Small, more frequent rewards for key milestones and achievements throughout the year can be even more impactful than one or two larger rewards.

Gift Cards Are Clear Winners Across Different Generations and Work Arrangements

Gift cards are loved across different age groups and work setups. At Blackhawk Network (BHN), we have found employees appreciate the flexibility of gift cards and being able to use them for whatever they want or need. Nearly half of employees want to use gift cards and prepaid cards for necessities, making them a great way to supplement employees' incomes while boosting morale. Personalized messages on gift cards reinforce positive behaviors and encourage employees to continue producing their best work.

Redefined Workplaces Mean Reimagined Rewards and Recognition Programs

Despite the increasing number of return-to-office mandates, the workplace has forever changed. Trends such as “hushed hybrid” continue to exist, showing that some employees resist working from an office. Giving rewards and incentives is one way employers can motivate employees to return to the office. Employees are willing to return to the office for a price, with many wanting a one-time monetary incentive or a pay increase.

Upskilling Is Non-Negotiable for Employees and Employers

Investing in learning and development is another way to help drive employee engagement. When employees feel stagnant, they are more likely to be disengaged, less productive, and seeking new opportunities. Investing in learning and development helps safeguard organizations and prepares companies for the future landscape of work.

The Future of Employee Engagement Is in Your Hands

A robust rewards and recognition program demonstrates that your company appreciates your employees, regardless of the economic climate and employment landscape. The ROI of rewards and recognition is clear: when employees are appreciated, they are more likely to be engaged, productive, and loyal. This is your opportunity to boost your company's culture of appreciation and recognition while safeguarding your business.
 
Footnotes

Author bio

Brian Gross is a Senior Content Manager at Blackhawk Network. Since 2018, Brian has been part of a team of BHN specialists developing a wide variety of content, including eBooks, videos, blogs, and demand gen materials. His prior experience as an advertising writer and creative director has helped him shape each piece, as well as jumping in here and there with strategy, ads, and naming projects. On the side, Brian is an award-winning screenwriter, occasional basketball player, proud parent of two, and owner of Bob, the very good dog.

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