HR leaders overestimate employee engagement as workplace ‘joy gap’ emerges

HR leaders are significantly overestimating employee engagement and workplace satisfaction, according to research from Reward Gateway | Edenred.

The company’s latest Joy Index Report found that 71 per cent of UK HR leaders believe employees are more engaged than they were a year ago, compared with just 35 per cent of employees who reported feeling more engaged.

The 36-percentage-point difference highlights a disconnect between organisational perceptions and employees’ lived experiences, with potential implications for workforce wellbeing, retention and productivity.

The research, conducted by Opinium among 1,000 UK employees and 500 HR leaders, also found that HR professionals consistently overestimated how positively employees feel about their working lives.

HR leaders estimated employees’ workplace joy at an average of 7.4 out of 10, while employees themselves gave an average score of just 6.2.

The findings raise questions about how effectively organisations understand and respond to the needs of their workforce – and suggest that they may be making decisions about employee wellbeing, engagement and investment based on assumptions that do not reflect workforce priorities. The gap becomes particularly apparent when examining what employees value most at work.

When asked which factors contribute to workplace joy, HR leaders identified work-life balance as the leading influence, cited by 36 per cent, followed by pay at 30 per cent and feeling valued and appreciated at 25 per cent.

Employees, however, placed greater emphasis on financial and employment security. Salary was the most frequently cited factor at 38 per cent, followed by job security at 30 per cent and purposeful work at 23 per cent.

The difference is significant for employers developing workplace wellbeing strategies, particularly where investment in wellbeing programmes may not adequately address financial pressures, job insecurity or wider concerns about working conditions.

The research also identified differences in how HR leaders and employees perceive the measures organisations take to improve workplace satisfaction.

Growth and learning opportunities were the most commonly cited organisational initiative among HR leaders, at 43 per cent, while employees were more likely to identify good employee benefits and flexibility in how and when they work, at 36 per cent.

The findings raise questions about whether workplace wellbeing and employee experience strategies are sufficiently informed by employee feedback, particularly as organisations establish budgets and priorities for 2027.

Employee development and upskilling emerged as a leading priority for 37 per cent of HR leaders, while 28 per cent identified AI implementation and training.

However, just 22 per cent of employees said learning something new had the biggest impact on them, while only 36 per cent reported frequently using approved AI tools.

Although skills development and technology adoption remain important organisational priorities, the findings suggest they may not always align with the factors employees associate with a positive working experience.

For UK employers, the research reinforces the importance of considering workforce wellbeing alongside pay, financial resilience, job design, flexibility and organisational culture, rather than treating engagement as a measure that can be improved through individual initiatives alone.

It also points to the need for more effective employee listening and measurement, particularly where HR leaders’ perceptions of engagement differ substantially from employees’ reported experiences.

Joe Walsh, Managing Director at Reward Gateway | Edenred, said: “Joy in the workplace may sound like a relatively minor or difficult metric to track, but our latest Report demonstrates the exact opposite. It’s a key piece of insight, which gives HR leaders a window into employee retention, productivity, and advocacy.

“Happy employees are less likely to leave their company and more likely to contribute and speak positively about their workplace, but macro pressures often lead HR departments to prioritise formal training and technology over everyday needs. Closing this expectation gap by delivering daily lifts – whether it’s tailored benefits, recognition or flexibility – is how businesses boost performance and power up their workplace joy.

“As we head into ‘Planning Season’ for 2027 and beyond, having measures like workplace joy in place can transform conversations with senior leadership, and prove that happiness is serious business.”

The Joy Index Report forms part of a wider international study commissioned by Edenred and conducted by Opinium across 27 countries. It combines measures of happiness, connection, purpose, feeling valued and engagement into a workplace joy metric designed to help organisations assess employee experience.

The UK findings are based on research conducted between 6 and 24 July 2026.