Are Your Managers Effective People Leaders?

We can all think of the worst managers that we’ve had. Usually, they are capable with the administrative or the individual aspects of the role, but they fail to connect on a personal level.

On the other hand, we can all remember the best managers that we’ve had. Those who show that they care about both our personal and professional development.

With all of the current economic instability, the rapid integration of AI and a pervasive pressure crisis, the State of Engagement Report 2026 highlights a critical truth: traditional management is no longer enough. Organisations that thrive in this climate are those that enable their managers to develop their People Leadership skills.

The Anatomy of the Current Crisis

Data from over 145,000 UK employees reveals a downturn in Organisational Health. While businesses are feeling the financial pinch, employees are bearing the brunt of the stress. Key metrics regarding job security and organisational future have deteriorated significantly:

• "The economic climate makes me worried about my organisation’s future" (Deteriorated by 5.06 percentage points).
• "Most days I feel exhausted when I finish work" (The lowest-performing statement at 46.57%).

This "pressure problem" is leading to a perceived lack of Fair Deal and a decline in Wellbeing. Crucially, the report notes that increasing wages or benefits is merely a "hygiene factor", meaning that paying your people more money may prevent dissatisfaction for a time, but does not drive engagement. The real solution lies in effective People Leadership.

The People Leadership Index (PLI)

To navigate these challenges, Best Companies utilises the People Leadership Index, a diagnostic tool that measures the specific relationship between a manager and their reports. It focuses on three further indexes: Clarity, Team and Coach.

1. Organisational Clarity: The "Why" Behind the Work

The report identifies a major gap in Organisational Clarity. Many employees no longer believe in the "why" behind their actions. People Leaders are responsible for cascading the ‘Ingenious Plan’; the roadmap connecting an organisation's purpose to its daily tasks.

• The Impact: In "3-Star" (World Class) organisations, the clarity gap between Directors and Team Members is only 11.81%, compared to 20.01% in non-accredited organisations.
• The Goal: By providing clarity, leaders transform uncertainty into a resilient, human-centric purpose.

2. Collaboration: Beyond Silos

Individual talent is insufficient without team cohesion. The report notes that "My Team" saw the second-greatest fall of all engagement factors.

• The Challenge: A lack of Psychological Safety prevents employees from expressing true feelings, while inter-departmental silos lead to the sentiment that "Some departments don't work well with each other" (scoring only 46.69%).
• The Role of the Leader: People Leaders must foster environments where it is safe to take risks and speak up, directly correlating to lower absenteeism and higher productivity.

3. Coach: The Human Connection

Being a People Leader goes beyond hitting targets; it is about personal and professional growth. However, external research suggests managers currently spend twice as much time on administration as they do on leading people. The Coach Index measures effectiveness across four pillars: Inspire & Energise, Recognise & Support, Listen & Inform, and Understand & Care.

• The Impact of Care: Team Members in Accredited organisations score 12% higher on the statement "My Manager takes an active interest in my wellbeing" compared to those in Non-Accredited firms.
• Strategic Growth: While the Coach Index is the strongest-performing index overall, the "Recognise & Support" element presents the greatest opportunity for improvement. Leaders must move toward Radical Candor - caring personally while challenging directly - to avoid "Obnoxious Aggression."

Leading the Industry 5.0 Movement

We have entered the age of Industry 5.0, which shifts focus from the pure automation of Industry 4.0 toward a future centred on Human-Centricity, Resilience and Sustainability.

Effective People Leadership is the catalyst for this shift. Managers who practice active listening and overcommunicate the "why" help reduce employee anxiety regarding AI and the economy. They move the organisation from being reactive to proactive, ensuring that employees feel valued as partners in the business’s success rather than just tools for profit.

Organisations looking to move beyond data collection and into active transformation can leverage our data-driven manager development tool, Elevate and our targeted 1 + 3 Method™ (1 to Celebrate and 3 Opportunities to Improve) to bridge the Organisational Clarity gap and empower their People Leaders.

‍