SYDNEY, May 13, 2026 /PRNewswire/ -- Business leaders across Australia and New Zealand believe workplace engagement is improving — but employees tell a very different story.

New research from Reward Gateway | Edenred's third annual Workplace Engagement Index reveals a growing perception gap between how leaders view the employee experience and how employees actually feel at work.

Drawing on insights from more than 2,000 employees and business and HR decision makers across Australia and New Zealand, the research shows leaders are significantly more optimistic about engagement levels than their workforce.

Nearly half (46%) of decision makers believe employee engagement has increased over the past year. However, only 25% of employees say they feel more engaged at work.

A similar disconnect appears when it comes to recognition. While 57% of leaders believe employees frequently feel recognised for their work, only one-third of employees say they actually do.

This gap between leadership perception and employee reality may also be contributing to growing retention risk. The research found that 56% of employees have considered leaving their job within the past six months.

But the findings also point to a clear insight into what may be driving disengagement and where organisations have an opportunity to act.

Nearly half (47%) of employees who report feeling less engaged cite a lack of joy at work as a key reason, rising sharply to 76% amongst deskless employees.

According to Kylie Green, Managing Director APAC at Reward Gateway | Edenred, this highlights an often-overlooked lever for improving engagement.

"For many organisations, engagement can feel like a complex challenge to solve," said Green. "But our research shows that the fundamentals still matter — employees want to feel recognised, supported, and able to experience genuine moments of joy in their work."

"When leaders believe these things are happening, but employees aren't experiencing them consistently, that's where the perception gap occurs."

"The opportunity for organisations is to focus on the everyday moments that shape how work actually feels. When recognition, communication, benefits, and wellbeing are embedded into the rhythm of work, organisations can create cultures where people feel valued, connected, and motivated to stay."

Around nine out of ten of employees say feeling joy at work improves productivity, connection, retention, purpose and engagement, suggesting organisations may be underestimating the role emotional experience plays in workplace performance.

Employees state that their organisation enables joy through a few key levers, including flexibility in how and where they work (35%), a positive company culture (28%), supportive leadership (26%), and good employee benefits (25%).

Unfortunately, one in five employees feel their organisation does not actively enable joy at work. These perceptions vary by group: just 10% of Gen Zers and 13% of hybrid workers say the same, compared to 31% of frontline employees and 32% of Baby Boomers.

These findings suggest that organisations that prioritise recognition and create more joyful employee experiences will be better positioned to close the engagement gap, strengthen retention, and foster a culture of high-performance.

Key findings from the 2026 Workplace Engagement Index:

• 46% of decision makers think employee engagement has increased, but only 25% of employees say they're more engaged
• 57% of decision makers think employees frequently feel recognised, but only one third of employees say they do
• Almost half (47%) of employees who are less engaged cite a lack of joy at work as a key reason (soaring to 76% for deskless employees)
• 56% of employees have considered leaving their job in the last six months
• Around nine out of ten of employees say feeling joy at work improves productivity, connection, retention, purpose and engagement

About the 2026 Workplace Engagement Index

The Workplace Engagement Index measures the state of engagement, retention, and productivity in 2026, revealing joy and recognition as key levers for improvement. The third annual report draws on insights from more than 2,000 employees and business and HR decision makers across Australia and New Zealand.

About Reward Gateway | Edenred

Reward Gateway | Edenred helps companies engage, motivate and retain people – every day, all over the world. Partnering with over 6,000 companies in 23 countries, we empower more than 10 million users to connect, appreciate and support one another to make the world a better place to work. Our unified employee engagement hub provides the best of recognition, reward, wellbeing, surveys, benefits and discounts that support talent acquisition, retention and values-driven growth.