Japan’s Workforce Engagement Crisis Demands Human-Centered Leadership: Gallup Report
Japan’s chronically low engagement is a significant impediment to innovation, economic growth, and talent retention. Disengaged workplaces cost the Japanese economy an estimated $524 billion USD per year due to lost productivity.
TOKYO – A new report, “Beyond Tradition: Reinventing the Japanese Workplace,” released by Gallup in partnership with the Institute of Directors (IoD), reveals that Japan faces a crisis of engagement, with only 7% of its employees classified as engaged. This places Japan’s workforce among the least engaged in the world, with the overwhelming majority (93%) being either not engaged or actively disengaged.
The report, which combines Gallup’s global engagement, wellbeing, and leadership data with qualitative insights from CEOs and CHROs of leading Japanese companies, highlights that traditional workplace structures are failing to keep pace with changing employee expectations.
The Engagement Imperative and Economic Cost
Japan’s chronically low engagement is a significant impediment to innovation, economic growth, and talent retention. Disengaged workplaces cost the Japanese economy an estimated $524 billion USD per year due to lost productivity.
The source material emphasizes that while Japan is respected for its operational excellence and economic resilience, its foundational strength—employee loyalty—is under growing pressure. Furthermore, workplace wellbeing has become an increasingly urgent issue, with work-related mental health disorders reaching record highs in fiscal 2023.
“In Japan, businesses are engaged in a crucial shift aimed at achieving high performance through a stronger focus on people,” said Dr. Indranil Nath, Chair of the Institute of Directors, Japan Business Group. “With Japan ranking among the lowest globally in employee engagement, the role of leadership in transforming workplace culture is more urgent than ever”. He added that through partnership with Gallup, the IoD is committed to supporting leaders who are driving meaningful change to create a brighter future for Japanese workers, fostering a more engaged, satisfied, and happy workforce.
The Silent Youth Revolution and Leadership Deficit
The report details how outdated organizational cultures—which prize hierarchy, tenure-based promotions, and resilience—are growing obsolete. This is evidenced by a “silent youth revolution”, as younger employees are quietly opting out of the traditional Japanese workplace.
Leaders interviewed for the study observed that younger staff challenge expectations not through loud protesting but through “quiet quitting,” choosing to find meaning outside the company. Gen Z and millennial workers prioritize purpose, learning, and growth far more than job security. The reliance on services like resignation agencies (taishoku daiko) also illustrates this shift in the employee-employer relationship.
The findings point to a “leadership deficit” in Japan, not of competence, but of the capacity to establish a meaningful emotional connection with employees.
Key findings regarding leadership include:
- Only 15% of employees in Japan report feeling inspired by their organization’s leaders, compared with a global average of 17%.
- The most desired leadership quality globally and in Japan is hope (46%), which is the belief that the future will be better than the present and that individuals are empowered to make it so.
- Japan’s traditional leadership style, emphasizing stability and structure, is not conducive to fostering meaningful connections or inspiring hope.
Japan’s Way Forward
Gallup and the IoD urge leaders to recognize that innovation, growth, and competitiveness require both cutting-edge technology and deeply human leadership. The time is right for Japan’s leaders to reinvent their workplace cultures.
The report outlines four key areas where organizations can transform their workplaces:
- Measure what matters, and make it actionable: Focus on formative, predictive, and actionable metrics aligned with basic workplace needs, such as clarity of expectations, purpose in work, and opportunities to learn and grow.
- Equip managers to coach, not just execute: Because 70% of the variance in team engagement is attributable to the manager, organizations must reset expectations and provide managers with greater space and tools to lead their teams. Effective managers must be strengths-based, engagement-focused, and performance-oriented.
- Redefine work for younger generations: Organizations must fundamentally redesign the workplace to align roles with employee strengths and create visible development paths, moving away from rigidity and tenure-based progression.
- Lead and inspire with hope: Leaders must inspire a tangible sense of hope in a better future, nurturing this through authenticity, transparency, and emotional connection, rather than merely giving people a plan.
“A thriving Japan starts with engaged employees,” said Rohit Kar, Regional Director, Gallup Japan. He concludes that success in Japan’s workplace transformation will be achieved through inspiring leadership and the day-to-day contributions of managers empowered and equipped to coach, develop, and engage their teams. For further insights into the evolving workplace paradigm, visit
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