Lessons from Japan’s low workforce engagement

Research showed that Japan has faced a low and stagnant rate of workforce engagement over the past 13 years – a global advisory firm called for urgent action to tackle this engagement slump.

Global advisory firm Gallup Japan released its Japan Spotlight Report: Beyond Tradition – Reinventing the Japanese Workplace in collaboration with the Institute of Directors Japan Business Group and Nikkei. The report contained data and insights from senior and HR leaders at Japanese companies.

Gallup Japan regional director Rohit Kar said: “Disengagement is not just a human issue, it is an economic one. With stress levels at record highs and wellbeing at risk, the cost of inaction is enormous. Our research shows that when organisations build cultures of connection and purpose, productivity rises and people thrive.”

Its findings revealed that only 7 per cent of employees in Japan were engaged at work, in contrast with 21 per cent globally.

The firm said: “With Japan ranking among the lowest globally in employee engagement, the role of leadership in transforming workplace culture is more urgent than ever.”

“Engagement is correlated with important organisational performance outcomes such as retention, safety, quality, customer loyalty, productivity and profitability.”

Japan’s workplace traditions

“The traditional Japanese workplace priorities of hierarchy and worker loyalty are becoming obsolete because they undermine engagement, performance, and wellbeing,” it found.

Following the COVID-19 pandemic, changes were made to Japan’s tradition-based working culture through new hybrid work arrangements. “Japanese employees, long known for company loyalty, began to demand a greater sense of personal connection with their work and to question whether their organisation’s purpose was aligned with their own values,” the report said.

“Engagement requires that employees feel connected to their organisation’s purpose and believe that there is meaning and value in the work they perform.”

One leader told Gallup: “We improved working conditions, but scores didn’t budge; it wasn’t until we focused on ‘work worth doing’ that engagement increased.”

Another said: “We had structured everything around comfort – better chairs, better hours – but until we made work itself feel valuable, the energy just wasn’t there.”

Kar said: “Japan’s challenge is not a lack of talent, but a failure to unlock it. When employees are encouraged to do what they do best every day, innovation follows. The future of Japan’s economy depends on leaders who can inspire hope, align people with purpose, and build workplaces that are not only productive, but human.”

What can Australia learn from this?

HR tech company ADP released its 2025 People at Work report, which found Australia’s engagement rates similarly lagging.

According to its research, Australian employee engagement levels sat at 16 per cent this year, 2 percentage points lower than last year.

“This difference suggests that, besides ongoing economic pressures and an uncertain job market, Australian hybrid and remote workers may experience a more profound disconnect from their teams and company culture, exacerbated by evolving expectations of work/life balance and the challenges that often come with remote collaboration,” ADP said.

Based on its findings, Australia’s engagement rates are higher for those working in the office or on-site (17 per cent) compared to hybrid workers (15 per cent); remote workers experience the lowest engagement rate (7 per cent).

“This contrasts with the global trend, where hybrid workplace arrangements have been shown to promote greater engagement among the workforce,” it added.

ADP Australia human resources director Emmy Andriotis said that “employee engagement ultimately comes down to how connected employees feel to their teams and employers, no matter where they work”.

“Businesses should recognise that one-size-fits-all approaches no longer work, especially in an increasingly hybrid workforce,” Andriotis added.

In July, Founder of EST10 and author of Earning Power, Roxanne Calder, told HR Leader: “When people lose sight of their contribution, they disengage. This isn’t laziness; it’s a signal that the human need for challenge and novelty isn’t being met. In a culture that glamorises busyness, people feel safer saying they’re burnt out than bored.”

To improve engagement, Andriotis advised HR leaders: “Investing in personalised, flexible solutions and cultivating a sense of belonging is a great starting point to bridge the gap, ensuring employees feel connected, valued, and motivated – whether they’re working from home or the office.”