The emotional recession is here – and it’s a bigger deal than you think
We’ve been here before.
Fifteen years ago, the world was reeling from the Great Recession—a financial crisis that wiped trillions off the global economy. Today, we’re facing a different kind of crisis: an emotional recession. And just like its financial counterpart, the effects are far-reaching, costly, and, if left unchecked, could take years to recover from.
The State of the Heart 2024 report, the world’s largest study on emotional intelligence, confirms what many of us have been feeling: people are struggling. Global emotional intelligence (EQ) has been declining for four straight years, wellbeing is at an all-time low, and burnout is rampant across industries. The stats don’t lie—this is a crisis of energy, resilience, and connection.
What’s driving the emotional recession?
According to the report, several overlapping factors are at play. From the pandemic and economic instability to rising AI adoption and hybrid work confusion, we’re in a constant state of uncertainty. People are exhausted, detached, and disconnected.
Since 2019:
EQ has dropped by 5.5% globally.
Wellbeing has dropped by 5.3%.
Burnout has increased in 65% of workplace sectors.
For businesses, this isn’t just a ‘soft’ issue—it’s a ticking time bomb for productivity, retention, and innovation. Emotional energy is the input that fuels economies, relationships, and organisations. If it keeps depleting, everything else suffers.
Burnout is rising across industries – and some are hit harder than others
Burnout isn’t a new problem, but since 2019, it has intensified at an alarming rate. The report highlights that 65% of workplace sectors have seen an increase in burnout, with some industries struggling more than others.
The hardest-hit industries:
Energy & Oil – a 13.42% drop in Drive scores, indicating severe burnout and exhaustion.
Transport, Wholesale & Trade – down 13.26%, with many workers in logistics, supply chains, and distribution feeling stretched thin.
Finance – long hours, market instability, and rising expectations have led to a significant increase in burnout levels.
Sectors with the most resilience:
Agriculture & Fisheries – saw a surprising 10.72% increase in Drive scores, suggesting stronger resilience and motivation in this sector.
IT & Telecommunications – despite challenges with remote work and AI, tech workers seem to be better at maintaining motivation.
What this means for business leaders:
Productivity is declining – Employees who are burned out aren’t just tired; they’re disengaged and less effective.
Turnover is rising – People won’t stay where they feel drained and undervalued.
Mental health support is no longer optional – Companies that don’t prioritise psychological safety, workload balance, and EQ development will struggle to retain talent.
Burnout is not just about workload; it’s about how people feel at work. Organisations need to go beyond wellness initiatives and address the root causes—unrealistic expectations, toxic cultures, and a lack of autonomy and purpose.
Gen Z is struggling the most
While all age groups have seen declines in emotional intelligence, Gen Z is being hit the hardest. Raised in a hyper-digital world, many entered the workforce just as the pandemic reshaped everything. Now, they’re more burned out, more anxious, and less optimistic than any other generation.
The data reveals:
53.7% of Gen Z workers report low job satisfaction.
They’re 3x more likely to struggle with managing emotions.
Their ability to stay motivated has plummeted.
Gen Z isn’t lazy—they’re overwhelmed. If businesses don’t address this, they risk losing their youngest, most dynamic talent before they even get a chance to thrive.
So what now?
We can’t afford to ignore this. Emotional intelligence is not just a ‘nice-to-have’—it’s a must-have. Here’s what needs to happen:
Invest in both emotional intelligence and relational intelligence training – Organisations that prioritise EQ and RQ development see higher retention, better collaboration, and stronger leadership.
Redefine leadership – The best leaders today aren’t just strategic thinkers; they’re emotionally intelligent communicators who can connect, motivate, and inspire.
Enable a healthy workplace culture – Psychological safety, empathy, and purpose need to be at the heart of how businesses operate.
We’ve been through financial recessions, and we’ve come out stronger. If we take action now, we can do the same for this emotional one.
ELLIE MASON partners with teams to explore the human experience at work. Being immersed in organisational development, leadership development, and influencing change for going on two decades now, Ellie’s superpowers include helping individuals, teams and organisations make sense of things. Things like individual development, team culture, and organisational change.