The workplace performance gap: why stability is masking a new crisis of engagement

For the past five years, organisations have experimented with hybrid policies, return-to-office mandates and flexible working arrangements while trying to determine how often employees should be in the office.

Those debates are now beginning to settle. According to WORKTECH Academy and SPS’s State of the Workplace 2026 report, office attendance patterns have largely stabilised and employees are still coming into the office to collaborate, access resources and spend time with colleagues.

However, beneath this apparent stability, a different picture is emerging. The report reveals a widening ‘workplace performance gap’ between what employees need in order to do their best work and what organisations continue to measure, invest in and optimise.

Employee engagement is declining

The most significant finding is that organisations are increasingly retaining employees through uncertainty rather than engagement. The proportion of employees who describe themselves as highly engaged has fallen from 42% in 2025 to 36% in 2026. Yet at the same time, fewer employees are leaving their jobs.

A weaker labour market, anxiety around AI and concerns about future skills mean many workers are staying put despite becoming more disengaged. Gallup data cited in the report shows that just 28% of employees believe now is a good time to find a quality job, down from 70% in 2022.

This matters because engagement shapes how employees think about performance. Highly engaged employees describe productivity as creating value, contributing to wider goals and helping others succeed. Less engaged employees are more likely to describe productivity in transactional terms such as staying busy, getting through the day or simply avoiding mistakes.

The workplace is not seamless

The report argues that one of the biggest barriers to performance is not a lack of workplace investment, but friction in the everyday experience of work. Employees say they lose time navigating systems, searching for information, dealing with distractions and struggling to find appropriate space.

Limited flexibility in office attendance was identified as the biggest frustration, followed by wasted time finding the right people or resources, difficulty focusing and lack of meeting space. The issue is not that organisations have failed to invest in offices, technology and workplace services. Rather, many of these systems do not work together effectively.

New benchmarks for success

The research highlights a growing disconnect between how organisations define productivity and how employees experience it. Many companies continue to measure success through utilisation, attendance and output. Yet employees believe the most important drivers of productivity are the ability to focus without distraction, access to the right tools and technology, access to colleagues and spaces that support both concentration and collaboration.

Almost a quarter of executives say they either do not have formal workplace productivity KPIs or are not aware of them. At the same time, only around half of employees believe their organisation is investing in the right workplace solutions.

The impact of AI

Artificial intelligence is likely to make this challenge even more urgent. AI usage has risen from 59% to 75% in the past year, but organisational policies have remained largely unchanged. As routine work becomes increasingly automated, the report suggests that the office will need to focus more on the things technology cannot replicate such as collaboration, judgement, creativity and learning.

The report concludes that organisations must stop thinking about the workplace as a collection of separate components and instead design it as a connected ecosystem. Space, technology, culture and services need to work together if organisations are to close the workplace performance gap and create environments where people can truly perform.