Global Employee Engagement Software Market Size, Share & Industry Trends Analysis Report By Vertical, By Enterprise Size (Large Enterprises and Small & Medium Enterprises), By Deployment Type, By Function, By Regional Outlook and Forecast, 2023 - 2029

Analysis of Market Size & Trends

The Global Employee Engagement Software Market size is expected to reach $2.6 billion by 2029, rising at a market growth of 17.7% CAGR during the forecast period.

Organizations that use employee engagement software can solicit, track, and manage employee feedback. Additionally, a system like this helps companies to acknowledge staff accomplishments, support promising projects, understand employee attitudes, and learn essential lessons from employee feedback. The company's human resources division implements employee engagement software as a supplement to existing methods or as a replacement for them.

Employee engagement software also increases corporate growth and income and increases employee retention, easy communication, increased productivity, and enhanced customer service. In addition, rising employee resignation rates and poor management communication in all industries drive software demand. Hence, businesses are observing tremendous development in their sales, employee productivity, and customer happiness owing to the deployment of software.

Businesses may improve employee and organizational experiences and increase employee engagement with the help of employee engagement tools. HR departments frequently select platforms for employee engagement and put them into place by managers, IT, the C-suite, and other organization members under the direction of HR. Trust, honesty, reciprocal commitment, and communication between a company and its members are the foundation for employee engagement. Enhancing organizational and individual performance, productivity, and well-being is a strategy that raises the likelihood of business success.

Nowadays, every business is data-driven, particularly when it comes to employee engagement. Dynamic dashboards in engagement tools instantly identify business areas needing help and showcase departments or regions performing excellent work. Leaders can monitor the change in engagement after launching any staff initiative and adjust as necessary. An increase in the digitization of daily work in both commercial and public companies will drive the expansion of the market.

COVID-19 Impact Analysis

The COVID-19 pandemic impacted people's lives, livelihoods, and economies all around the world. The considerable changes in the working environment completely disrupted the employee experience. Employee engagement was first negatively influenced by pandemic worries in 2020. Nonetheless, the businesses started remote working and work-from-home policies with the use of cutting-edge equipment in response to strategic policies from governments throughout the world. The need for employee engagement software has increased due to the pandemic's growing requirement for sophisticated team management and communication solutions.

Market Growth Factors

Usage of innovative technology like AI in the employee engagement software

Due to the growing use of artificial intelligence (AI) and machine learning (ML), employee contact is becoming easier. AI and ML have the ability to enhance on-site and remote employee engagement by monitoring organization-wide performance in real-time, providing workers with 24/7 support, and optimizing learning and development outcomes. In addition to automating monotonous chores, offering individualized learning and development experiences, and removing bias through enhancing a company's diversity recruitment strategy, the increasing adoption of AI and ML technologies facilitates the extraction of insights from performance data.

Growing adoption with various offered benefits of employee engagement software

Employees have access to tools that ease work duties in a digital workplace. In addition, the focus is placed on effective collaboration and enhanced interaction, which assists the employee in increasing productivity. The sophisticated program delivers behavioral analysis that aids in staff retention. The software solutions for employee engagement have a number of characteristics, such as tracking employees' overall performance to increase productivity and maintain security. In addition to monitoring keystroke logging, smart rules and alerts, live views, access conversations, and file transfer tracking, their adoption rate is boosted by such additional vital features. These factors associated with employee management software will surge the market growth.

Market Restraining Factors

Time consuming activities with improper feedbacks

Engagement software requires continual feedback and data to analyze an organization's employee engagement rate. Yet, completing surveys, providing feedback, and engaging in real-time conversations might consume employee-dedicated working hours. With extra responsibilities, the individual may experience burnout and discontent with the organization. Many employee engagement surveys provide feedback that reveals employee involvement but do not provide information that might help businesses take a proactive stance. Therefore, hamper the employee engagement software market growth.

Deployment Outlook

Based on deployment, the employee engagement software market is segmented into cloud and on-premise. The on-premises segment dominated the employee engagement software market with maximum revenue share in 2022. This is due to the complete control of the software provided to the company with the use of an on-premises deployment. This enables managers to use employee data in accordance with organizational or operational requirements. Similarly, quick access to information, resources, and other tools raises employee engagement levels even further and thereby provides more growth opportunities for the segment.

Enterprise Outlook

On the basis of enterprise, the employee engagement software market is divided into large enterprises and small & medium enterprises. The small & medium enterprises segment procured a substantial revenue share in the employee engagement software market in 2022. This is due to the fact that many small businesses have converted to permanent remote working, propelling the SME segment to a strong growth rate during the predicted period. Furthermore, software integration is anticipated to improve company communication and employee appreciation.

Function Outlook

By function, the employee engagement software market is classified into onboarding, training, collaboration & interaction, customer service, rewards & recognitions and others (surveys). The training segment garnered a prominent revenue share in the employee engagement software market in 2022. This is because today's businesses place a strong emphasis on the professional growth of their staff members by providing them with interesting tools. In addition, training through engagement enables senior management levels to better handle and comprehend the challenges posed by employees and other obstacles.

Vertical Outlook

Based on the Vertical, the employee engagement software market is bifurcated into retail, BFSI, government, healthcare, telecom & IT, hospitality, manufacturing and others (media & entertainment). The retail segment procured a promising growth rate in the employee engagement software market in 2022. This is due to the fact that the retail industry is expected to gain a considerable share as a result of the industry's increased focus on face-to-face communication with customers. Also, it is vital for the retail staff to be involved in their work and communicate well in order to boost employee satisfaction, thereby propelling the segment's growth.

Employee Engagement Software Market Report Coverage

Report Attribute	Details
Market size value in 2022	USD 840.6 Million
Market size forecast in 2029	USD 2.6 Billion
Base Year	2022
Historical Period	2019 to 2021
Forecast Period	2023 to 2029
Revenue Growth Rate	CAGR of 17.7% from 2023 to 2029
Number of Pages	284
Number of Table	500
Report coverage	Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Companies Strategic Developments, Company Profiling
Segments covered	Function, Vertical, Enterprise size, Deployment Type, Region
Country scope	US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria
Growth Drivers	Usage of innovative technology like AI in the employee engagement software Growing adoption with various offered benefits of employee engagement software
Restraints	Time consuming activities with improper feedbacks

Regional Outlook

Region-wise, the employee engagement software market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America region led the employee engagement software market by generating the maximum revenue share in 2022. This is owing to the increased investment in digital solutions and HR tech tools. The region's nations are investing in employee-focused products to ensure the continuation of businesses and boost employee productivity. This region would present prospects for expansion due to the area's significant presence of major companies.

Free Valuable Insights: Global Employee Engagement Software Market size to reach USD 2.6 Billion by 2029

The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include 15Five, Inc., Degree, Inc. (Lattice), Smartly, Inc., Vantage Circle (Bargain Technologies Private Limited), Nreach Online Services Private Limited (Gift Management Asia Pte Ltd), Workvivo Limited, Synergita Software Private Limited (Aspire Systems Group), Leapsome GmbH, Kudos, Inc. and Culture Amp Pty Ltd.

Strategies deployed in Employee Engagement Software Market

• Apr-2023: Vantage Circle teamed up with Rembrandt for introducing a total recognition solution. Following the collaboration, the company aims to make the process of employee recognition and awards easy. The objective is to offer a comprehensive, end-to-end recognition solution so that organizations can get the maximum benefits.
• Mar-2023: Vantage Circle unveiled Vantage Pulse, a powerful employee survey tool for collecting, measuring, and taking action on real-time employee feedback. This tool has various features comprising Benchmarking against other companies, eNPS format, anonymous surveys, deep insights, smart predictions, etc.
• Feb-2023: Vantage Circle came into partnership with Heyy, a mental health care company, for providing an important benefit of mental health care to its partner employees and customers across the world. Following the partnership, the companies would create a platform where employees can experience well-rounded happiness of mental well-being.
• Nov-2022: Leapsome expanded its business in the US market by opening its NYC office. With this expansion, the company aims to enhance the number of platform users as well as the market share.
• Nov-2022: Xoxoday signed a technology partnership with UKG, a provider of human resource management and workforce management services. The partnership would enable the HR leaders and organizations in improving the workplace experience with a holistic employee engagement approach that integrates, aligns, motivates, and empower teams. This partnership helps to address significant contemporary issues of disengagement and attrition by placing a focus on the employee experience. In addition, UKG enables Xoxoday to reach its goal of creating an engaged workforce that collaborates across silos to achieve better results.
• Sep-2022: Lattice launched Lattice Connect, a global partner network that would help clients in accelerating the people success initiatives swiftly. The network would offer a deeper and more accessible range of partner capabilities and solutions for clients improving their people success strategy with new perks and resources meant to deliver more strategy, direction, and agility to its growing ecosystem.
• Jun-2022: Culture Amp launched Develop, a solution powered by people science that goes way beyond the old models of learning utilized in LMS. Develop gives managers the tools to proactively help their teams, enables employees to plan their career paths, and provides HR professionals with the data and insights they need to create successful programs. The framework of Develop is quite useful for guiding the growth conversation as well as for coming up with a suitable exit strategy.
• Mar-2022: Lattice announced the launch of OKR and Goals, new objectives and key results, and goals products for helping organizations better align with their employees on visions. Lattice's OKR and Goals assist firms in keeping their objectives top-of-mind by incorporating them into employees' daily routines and conversations, such as one-on-one meetings with managers, weekly reports, and other areas, to continuously steer work.
• Sep-2021: Lattice announced the establishment of a new office in London for marking its expansion in Europe. The expansion is an integral part of Lattice's global support strategy for HR and people executives.
• Aug-2021: 15Five introduced Transform, a leadership training and coaching offering designed for helping managers in driving employee engagement and business results simultaneously. Transform combines individualized coaching with online learning opportunities to help all managers reach their full potential as leaders. Transform offers innovative and engaging coaching and materials to assist businesses in achieving their objectives.

Scope of the Study

Market Segments Covered in the Report:

By Vertical

• Telecom & IT
• Healthcare
• Retail
• Government
• Manufacturing
• BFSI
• Hospitality
• Others

By Enterprise Size

• Large Enterprises
• Small & Medium Enterprises

By Deployment Type

• On-premise
• Cloud

By Function

• Collaboration & Interaction
• Training
• Onboarding
• Customer Service
• Rewards & Recognitions
• Others

By Geography

• North America
  • US
  • Canada
  • Mexico
  • Rest of North America
• Europe
  • Germany
  • UK
  • France
  • Russia
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Singapore
  • Malaysia
  • Rest of Asia Pacific
• LAMEA
  • Brazil
  • Argentina
  • UAE
  • Saudi Arabia
  • South Africa
  • Nigeria
  • Rest of LAMEA

Key Market Players

List of Companies Profiled in the Report:

• 15Five, Inc.
• Degree, Inc. (Lattice)
• Smartly, Inc.
• Vantage Circle (Bargain Technologies Private Limited)
• Nreach Online Services Private Limited (Gift Management Asia Pte Ltd)
• Workvivo Limited
• Synergita Software Private Limited (Aspire Systems Group)
• Leapsome GmbH
• Kudos, Inc.
• Culture Amp Pty Ltd.