Employee experience: The gap between employer perception and reality

Only 25 per cent of employees reported being more engaged since 2025, despite one in two employers believing that employee engagement in their organisation has increased, new research has found.

A recently published report revealed a major disconnect between perceptions of company decision-makers and reality regarding the employee experience.

According to findings from the 2026 Workplace Engagement Index by Reward Gateway and Edenred, 60 per cent of decision-makers believed that their employees frequently felt joyful, compared with 41 per cent of employees who reported feeling this way.

The research revealed that joy through wellbeing maintenance and recognition benefited workers in a variety of measures, with around nine in 10 employees reporting that joy improved their productivity, connection, retention, purpose and engagement. On the flip side, a lack of joy played a key factor in disengagement, impacting 47 per cent of employees and 76 per cent of fully remote employees.

Despite these results, the report revealed nuances to this narrative, with more Gen Z reporting frequently feeling joyful at work (46 per cent) versus older Millennials (30 per cent).

Interestingly, the report unveiled flaws in the employer perception of the employee experience: 57 per cent of decision-makers believed employees frequently feel recognised, but only one in three employees actually reported feeling that way.

Further, while 46 per cent of decision-makers believed that employee engagement in their organisation had increased, only 25 per cent of employees said they felt more engaged.

This gap widened for everyday experiences, as shown by the 68 per cent of decision-makers who believed that employees frequently felt supported, compared with the 46 per cent of employees who reported feeling this way.

Stubbornly high statistics

Gen Z workers were found to be more optimistic than their generational counterparts on a variety of measures. Based on the findings, 38 per cent of Gen Z workers reported being more engaged than last year, and 28 per cent of older Millennials and Baby Boomers reported being less engaged than in 2025.

Employee responses revealed insight into the leading contributors to disengagement: work-related burnout (54 per cent), lack of joy at work (47 per cent), lack of recognition for hard work (44 per cent), general stress (40 per cent), and cost-of-living pressures (36 per cent).

The findings revealed that disengagement can create strains on businesses if not addressed, manifesting through underperforming employees (51 per cent), a difficult work environment (46 per cent), increased absenteeism (45 per cent), decreased employee productivity (40 per cent), and higher turnover (32 per cent).

Despite greater optimism, 69 per cent of Gen Z respondents said they have considered leaving their jobs in the last six months, up from 55 per cent in 2024. On the contrary, Baby Boomers (38 per cent) and fully remote workers (51 per cent) were less likely to have considered leaving within the same period.

Overall, the report found that 56 per cent of respondents had considered leaving their roles in the last six months, a statistic that was stubbornly high for the past three years (58 per cent in 2025 and 56 per cent in 2024).

The key causes of turnover were found to be: poor pay (32 per cent), lack of career advancement (32 per cent), being overworked (31 per cent), lack of recognition (30 per cent), poor company culture (29 per cent), and a lack of joy at work (28 per cent).

Turning things around

Based on its data, employee wellbeing was found to be most benefited by flexibility in how and where employees worked (35 per cent), a positive company culture (28 per cent), supportive leadership (26 per cent), and good employee benefits (25 per cent).

Further, it found that recognition and rewards have remained the most popular drivers of employee productivity, according to 49 per cent of workers, a jump from 43 per cent saying the same last year.

Reward Gateway and Edenred managing director for APAC, Kylie Green (pictured), said the findings highlight a simple but overlooked opportunity for organisations.

“For a long time, joy at work has been seen as something intangible or difficult to measure,” Green said.

“But what this research shows is that joy has a very real connection to outcomes organisations care deeply about – productivity, engagement, and retention.”

“At a time when many businesses are facing pressure around talent and wage growth, creating environments where employees feel recognised, supported, and connected can have a powerful impact on driving business performance.”

This research comes from Reward Gateway and Edenred’s collaborative report, the 2026 Workplace Engagement Index, which explored the links between joy and productivity, retention, and engagement. Survey responses from 1,000 decision-makers and 1,000 employees across Australia and New Zealand were collected to inform their findings.