Running on empty: The workforce performance crisis and how to fix it

We’re standing at the intersection of technological capability and human possibility, building workplaces where people not only survive alongside algorithms, they thrive. Yet as companies rush to integrate AI, at BetterUp Labs we’ve discovered that our most critical resource—human performance—is falling fast.

Lost productivity cost US companies $2.2 trillion over the past 5 years. Our new research reveals what’s behind the drop—and what leaders can do to reverse it.

A crisis in plain sight

Between 2019 and 2025, workforce performance in the U.S. experienced a significant decline across all industries, roles, and levels. Our findings—encompassing over 200 million data points from 410,000 employees—reveal a sobering reality: a 2–6% drop in performance that means 75% of employees are performing worse now than they were before 2019.

This isn't just a temporary dip. It’s part of a trend that began in 2017, pointing to a broader erosion of human psychological resources just as organizations face unprecedented pressure to perform and adopt transformative technologies like AI.

And the stakes couldn't be higher. When self-reported performance falls by one standard measurement unit, actual work output declines by 7.81%—and we're seeing this play out across the entire workforce. Solving this problem isn't just about winning or losing—it will determine whether your business lives or dies.

Three gears of performance

To fix this crisis, we need to disentangle the three distinct kinds of performance and the psychological factors that fuel them. 

1. Basic performance: This is the Industrial-Era definition of performance, centered around task completion. It requires focus and enables individuals to define, prioritize, and complete task-based work efficiently—from working on an assembly line to fixing bugs in code. A study of 30,000 manufacturing firms showed that when basic performance is high, profitability doubles.

Yet since 2019, focus has declined sharply. Overall attention spans have plummeted to under 47 seconds (down from 2.5 minutes in 2004), leading to a drop in basic performance and productivity as employees struggle to stay on task.

1. Collaborative performance: This refers to team-based effectiveness driven by alignment and the championing of others. When managers score high on these drivers, team performance improves by 22%. Collaborative performance has also dropped significantly since 2019, signaling a breakdown in connection and coordination across teams.

The rise of AI agents is reshaping teamwork and turning everyone into a manager. With 60% of employees now considering AI agents as “partners,” skills like context, feedback, and alignment have become essential for everyone.

1. Adaptive performance: Adaptive performance involves innovation and nimbleness powered by creativity, connectivity, and agility. High adaptive performance leads to more than a 33% increase in organizational innovation and is strongly correlated with shareholder returns. Boston Consulting Group found that the 50 most adaptive companies outperformed the market by 68%.

The decline of adaptive performance is threatening organizations' ability to evolve and compete in fast-changing environments. Adaptive performance serves as the switching gear that enables organizations to move seamlessly between all three types of performance.

What powers everything

Underlying all three types of performance are three critical capacities that power everything. This fuel makes up 27% of the performance variance:

• Motivation: Sparks curiosity and drive to explore new ideas
• Optimism: Opens minds to possibilities, reduces fear of failure
• Agency: Equips individuals to experiment and lead change

Another way to look at it: if your organization is a high-performance vehicle, motivation, optimism, and agency are the fuel in the tank. Without them, you’re running on empty.

Why the empty tank?

The greatest contributors to the decline in motivation, optimism, and agency are:

A breakdown in mattering Motivation accounts for a staggering 82% of what's in a worker's fuel tank—at its core this is the sense that one's work matters. However, constant organizational changes, priority shifts, strategic "pivots," and abandoned initiatives erode the sense that efforts are meaningful or recognized.

Stagnant growth opportunities When individuals stop believing they can grow, motivation drops—this is especially problematic in a world where adaptive performance and a growth mindset are essential.

Chronic stress and uncertainty The erosion of calm (down 11% since 2017) signals a broader psychological depletion that predates the pandemic. An environment of persistent stress undermines optimism and erodes agency by making people feel reactive rather than empowered.

Pilots vs. Passengers: The AI mindset divide

Our research reveals two distinct mindsets around working with AI that directly correlate with performance outcomes:

• Pilots thrive with AI. They embrace it as a creative partner, are more confident in navigating change, and take the lead in adapting to new technology. The defining mindset of Pilots is one of optimism and agency.
• Passengers struggle with AI. They're pessimistic, afraid, and reluctant to use AI in the workplace. When they do use it, they fail to think critically about AI's outputs. This group represents the majority of the workforce, with 67% of study participants saying they need training to acquire and hone AI collaboration skills.

A study from UC Berkeley's Haas School of Business and Harvard Business School showed that AI has the potential to increase adaptive performance in creative jobs—but only if workers' skills are already high in this area. AI doesn't replace imagination; it amplifies it. But that amplification can only happen if people have the right mindset.

When leaders use words reflecting a belief that employees can manage and direct AI effectively, and that it’s an opportunity for growth, it increases their “pilot-hood” and delivers that much needed fuel for collaborative and adaptive performance.

The path forward: Refueling for transformation

Transactional training won't enable transformational performance. The solution requires an approach that honors the complexity of performance by supporting individual growth, providing continuously evolving interventions, and tailoring precisely to organizational strategy, job type, market, and individual strengths.

Organizations that invest in mattering, motivation, and mindset are moving people back into growth—and performance back into forward momentum. Companies that invest in adaptive performance see up to 37% higher innovation.

With a team of scientists and an expansive universe of data about human transformation, BetterUp is elevating the performance curve at scores of companies—representing an increase of hundreds of millions of dollars in revenue.

BetterUp’s Human Transformation Platform unlocks new levels of performance at scale. This AI-powered platform meets employees where they are, delivers real-time, personalized support powered by 200+ million data points on human transformation, and all your people data flows into one unified platform—keeping your organization adaptive, aligned, and high-performing.

To thrive in the GenAI era, you need strategies that power growth, fuel adaptability, and meet people where they are—at scale. BetterUp isn’t just coaching. It’s precision development for the age of AI.

Read BetterUp’s full report, Winning in the age of AI: Transforming workforce performance, for more about the crisis in human performance and how to set your workforce up for success in the GenAI transformation.