Nearly six in 10 Indian employees are showing up for work without being psychologically invested in their jobs, while engagement among managers has fallen sharply, according to a new report by Gallup and the Institute of Directors (IOD), India.

The report, ‘Rebuilding Indian Workplaces for the Future’, identified weak organisational culture or a mismatch between corporate values and workplace realities as the most frequently cited explanation for the rise of ‘quiet quitting.’

Of the 181 IOD members surveyed, 42% selected weak organisational culture or values misalignment as a reason employees were withdrawing discretionary effort while continuing to meet their basic job requirements. Low trust in leadership or poor communication, lack of meaningful work, limited opportunities for career development and inadequate recognition were each cited by 31% of respondents.

The findings indicate that quiet quitting may be less a matter of employee attitude than a response to how people experience their organisations. Employees continually assess whether management decisions match stated values, leaders communicate credibly, good work is recognised and opportunities for growth are available, the report said.

The survey findings come against the backdrop of a broader decline in engagement. Gallup’s workplace data for 2025 showed that 59% of Indian employees were not engaged, while 23% were engaged and 18% actively disengaged.

The “not engaged” category — comprising employees who put in the time but lack a strong psychological connection with their work or employer — represents the biggest opportunity for companies to improve productivity and workplace performance, the report said.

“India’s largest engagement opportunity lies with the 59% of employees who are present at work but not psychologically invested,” said Rashi Singh, regional director, Gallup South Asia.

However, the managers expected to rebuild that connection are themselves under pressure. Manager engagement fell nine percentage points to 30% in 2025, from 39% in 2024. Gallup estimates that managers account for 70% of the variation in engagement across teams because of their role in setting expectations, coaching employees, recognising contributions and connecting individual jobs with a larger purpose.

“Organisations need to select people for manager talent, equip them to coach and remove the operating friction that prevents them from leading well,” Singh said.

Asked what managers needed to respond to the engagement challenge, 43% of the IOD respondents selected a team culture in which employees support and rely on one another. Another 40% cited improving managers’ ability to hold meaningful coaching conversations, using technology to simplify work and streamlining processes to reduce complexity.

The report said managers could not compensate for larger teams and complex systems through additional personal effort alone. They required stronger teams, better managerial capabilities and fewer procedural obstacles.

How managers are chosen is another area requiring attention. 41% of IOD members said companies should select managers on the basis of managerial talent and suitability for the role, rather than treating promotion as a reward for past performance.

Respondents also called for greater recognition of the manager’s role, stronger communication between senior leaders and managers, investment in management development and clearer career paths for both people managers and individual contributors.

Manoj K Raut, chief executive officer and secretary-general of IOD India, said workplaces were changing rapidly as a younger generation sought greater work-life balance, flexibility, meaningful careers and stronger support for mental well-being.

“Employees are looking for more than just a job — they seek meaningful work, opportunities to learn and grow, recognition for their contributions, and leaders they can trust,” Raut said.

The report is based on an online survey conducted through the IOD platform between May 14 and June 22, 2026, and interviews with 27 senior leaders across sectors. Gallup said the survey findings reflected the perspectives of the participating IOD members. Its India employee and manager engagement figures are reported using three-year rolling averages.