State of Engagement 2026 Report |
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Imagine a workplace where every voice matters, where people feel safe to share ideas, even bold ones, without fear of judgment. Mistakes become learning opportunities, not career-ending events. This is the foundation of Psychological Safety, a concept proven to drive team performance and Employee Engagement.
And Employee Engagement is the key to high retention.
Attracting, retaining and engaging top talent is a top-level priority for every organisation. In fact, over half of all HR professionals view retention as their greatest challenge1.
This is important as external research shows that highly engaged teams are not only loyal to their organisation, they also deliver 21% greater profitability2.
There is a belief in many organisations that the biggest driver of engagement is perks and pay. It’s not. It’s Psychological Safety.
When employees feel safe to speak up, share ideas and take risks without fear, innovation accelerates, collaboration deepens and Organisational Health improves. For organisations, prioritising Psychological Safety is a strategic imperative for building resilient, high-performing cultures.
“A belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns or mistakes, and that the team is safe for interpersonal risk-taking.”
– Amy Edmondson
Harvard professor Amy Edmondson3, who coined the term, describes Psychological Safety as essential for learning and innovation. When it’s present, people contribute fully because they trust that their voice matters.
Employee Engagement is about commitment, motivation and willingness to go the extra mile. Psychological Safety fuels engagement because:
At Best Companies, our academically rigorous 8-Factor Model - refined over more than 25 years -demonstrates that true Employee Engagement is built on trust, open communication and meaningful relationships. Certain factors such as Leadership, My Manager and My Team consistently show that when employees feel heard, respected and supported, performance and loyalty thrive.
However, our data shows that over the past year, all three of these factors have seen a decline in their average scores, with My Team seeing the second greatest decline out of all 8-Factors.
Furthermore, the statement “People are afraid to express their true feeling in team meetings” had a low performing score of 65.46%, indicating a low degree of Psychological Safety, which is essential for honest communication and streamlining decision-making.
Psychological Safety is the foundation that underpins every one of these behaviours, encouraging people to share ideas, raise concerns and collaborate without fear, enabling teams to thrive.
In 2012, Google4 launched Project Aristotle to answer one question: What makes a team effective? After studying 180+ teams and analysing hundreds of variables, the top finding was clear: Psychological Safety was the number one predictor of team success.
Other factors included:
But none mattered as much as creating an environment where people feel safe to speak up. Their researched confirms that Psychological Safety is the foundation for high-performing teams.
Further research highlights the importance of effective teams:
Building Psychological Safety requires intentional leadership. Practical steps that leaders can take are:
“Creating an environment where people feel safe to speak up isn’t just good leadership, it’s a strategic imperative. In my conversations and relationships built with CEOs from some of the UK’s most well-known brands, one insight stands out: organisations that listen to their people and act on feedback by including their people in the decision process, create cultures where trust and Psychological Safety thrive. Psychological Safety is a proven driver of engagement, innovation and organisational health. By making this a priority, leaders build workplaces where people feel valued, ideas flourish and performance soars.”
- Best Companies Founder & CEO, Jonathan Austin’s view on Psychological Safety
It’s built through measurement, insight and action. At Best Companies, we provide the tools and expertise to turn employee feedback into meaningful change. Our Measure and Improve solutions empower leaders to:
By combining robust measurement with expert interpretation, Best Companies helps organisations move beyond theory to achieve real, lasting cultural change.
