I think the problem is that starting in the mid-70s, companies have been continuously devaluing their human workers.
Before that, it was possible to take a job after graduation and stay with the same company until retirement. A worker's loyalty to the company was rewarded in kind, with the company's loyalty to the worker. People got raises and promotions. They grew roots.
Now, there is zero corporate loyalty. If you can't predict a profit for this quarter for your specific individual contribution, regardless of how hard you can work, you're fired. But you will come crawling back when we need you again, won't you?
The workers have responded. If the company stops making the work worthwhile, the worker will slack off or jump ship. If the company force-feeds its Flavor-Ade, the employees will just puke it up as soon as it's safe to do so. If the company tells baldfaced lies about itself, the employees smile and nod, while thinking about the rude gestures they would like to be making.
The "lack of engagement" is because the employees know that management cares about them not at all, but the forms must still be honored in order to receive the paycheck. In short, your company is bullshit and the workers hate it; they are just using it to get what they need and will ditch it the instant that a better deal comes along. We are all mercenaries now.
We will disobey whenever it's more convenient for us, and we think we can get away with it. Because the company executives are just our bosses, not our friends or our leaders or our prophets. If they fire us, we move on to the next bosses just like them. We're not going to bust our ass to earn them another dollar. Maybe if we are freshly fallen off the back of the turnip truck, we will go the extra mile, but it doesn't take long for those folks to learn. So the disengaged worker is the default. We learned from our elders, who were forcibly disengaged by their employers.
And since my fortunes are not tied to those of my employer in any meaningful way, I will not stick around to help bail out a sinking ship. If you're going down, I'm not even going to plug the leak and call for help. I'll just grab a lifeboat and be on my way, thanks. It will probably even be an even smoother ride, as I won't have to worry about any rising tides raising my boat.