According to a new report, workplaces nationwide are on unstable legs when it comes to employee wellbeing. As a result, productivity is at risk.
The Summer 2025 State of the Workforce Report from meQuilibrium uncovered that a triple threat of pessimism, uncertainty and disconnect are reaching critical mass and affecting both employee and organization wellness. The comprehensive analysis of nearly 5,500 employed U.S. adults revealed “both significant challenges and promising pathways for organizational resilience,” researchers write.
Pessimism, uncertainty and the effect on employee wellbeing
What’s driving employee pessimism? Sixty-seven percent of employees say they feel worse when they consider the state of the country, while nearly half say their finances are hindering their outlook and about one-third attribute pessimism to their work situation. And they don’t anticipate things getting much better: Fifty-two percent expect the state of the country to worsen, about 27% envision their financial situation declining and 24% expect their work satisfaction will get worse.
Brad Smith, meQ’s chief science officer, says the connection between pessimism and performance is clear: Employees with work-related pessimism, researchers found, experience a drop in productivity of more than 60%—and are at a 128% greater risk for depression.
Uncertainty—exploding across workplaces as AI enters the scene and global economic and political tensions heat up—is complicating matters, Smith says. A high degree of stress related to uncertainty more than triples the rate at which employees view their work situation pessimistically.
It’s a dynamic that is “costing companies,” Smith says.
“Individuals who report a high degree of uncertainty-related stress exhibit much greater productivity impairment, indicating that uncertainty may be reducing output by as much as half,” Smith notes.
Stress related to uncertainty isn’t likely to abate any time soon, but rather is “the new normal in the workplace,” Smith says.
“What’s alarming,” he adds, “is how it’s eroding employee confidence and dragging down performance and engagement without many even noticing.”
Disconnect: a ‘near universal’ concern
About one-third of those who cite uncertainty-related stress are also experiencing burnout at higher rates than others.
Burnout, as well as distrust of leadership and supervisors, Smith says, is leading more than half of employees surveyed to exhibit at least one symptom of disconnect. Employees who show severe disconnect see a corresponding dip in productivity by 66%.
While the extent of disconnect uncovered in the study was surprising, he says, most eye-opening was the minimal variation across most demographic categories, including gender, work site, salary versus hourly, industry and manager status.
“This suggests that disconnect isn’t easily dismissed; it’s a near-universal concern that transcends the typical divisions we see in workforce data,” Smith says.
Building the skills needed to thrive
The meQ study uncovered powerful buffers against the VUCA (Volatile, Uncertain, Complex and Ambiguous) storm: the ability to manage emotions, maintain realistic optimism and empathetic leadership.
For example, employees who struggle with low emotion control are far more likely to feel overwhelmed at work and to carry that stress into their personal lives. In contrast, those with stronger emotion control report significantly less stress and uncertainty, highlighting the critical role psychological resilience plays in navigating VUCA’s harmful effects on the workforce.
Smith explains that the most powerful indicator of whether an employee is likely to report a negative outcome (such as depression, anxiety or high stress) is the feeling that their manager is looking out for their and their team’s wellbeing.
“Empathetic management” might seem too “soft” a term for some organizations, he says, but it’s a lever every business can pull to change course for the better, he explains.
“In a world defined by volatility and ambiguity, building resilience is no longer optional—it’s essential,” Smith says. “Our research shows that skills like emotion control and empathetic leadership can shield employees from the toxic effects of uncertainty and pessimism. Even in turbulent times, we can equip people to thrive.”
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