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Employee engagement software allows companies to collect data on the health of their culture on a regular basis through employee surveys that elicit feedback from specific employees inside the company. As the number of employees leaving their jobs increased to 27.9% in 2019, up from 23.7% in 2015, businesses have been increasingly embracing employee engagement software to maintain a stable workforce. With the arrival of the millennial and Gen Z generations, aspects of company life such as culture and purpose have become increasingly significant. Companies will struggle to retain young workers if they do not have a positive culture. Finally, people analytics is becoming a more important discipline, with 71% of companies ranking it as a major priority.
The employee engagement and feedback software market in Japan generated a revenue of US$ 47.0 million in 2020 and is expected to rise to US$ 108 million by 2027, with a compound yearly growth rate(CAGR) of 9.1%. For a variety of reasons, encourage employees to use an employee engagement platform on a long-term basis. Customizable workflows and reporting are among the various key features. Any employee engagement platform can be tailored to the firm's culture and used to bring the ideals of the organization to life in a virtual environment. This includes digitizing offline awards, administrative, and approval processes, as well as creating dashboards and reporting tailored to specific roles.
It also offers extensive platform support. A responsive hotline, helpdesk, or ticketing system, as well as training tools for a range of staff, could be part of this. The platform is more likely to be used if there are fewer disruptions in a user's workflow.
Such software builds a healthy work culture by timely triggering communications outside the platform to give precisely the appropriate amount of push to employees to utilize the platform. This includes sending emails prior to the platform's launch and providing frequent updates on new features and usage. Organizations can also send out occasion-based emails to their employees via email or SMS, wishing them happy birthdays or anniversaries and urging them to use the platform to redeem their presents.
In Japan, employee engagement has become a critical concern. In the current IMD World Digital Competitiveness Ranking, which examines how countries use digital technologies, Japan came in at number 27. Japan's artificial intelligence (AI) policy for 2019 emphasizes the need to train 250,000 employees each year in technologically sophisticated disciplines such as data science and AI. In order to preserve a healthy relationship between employee and company, management in Japanese organizations has taken a variety of initiatives to raise employee understanding of software usage and benefits.
With the increasing number of new businesses and organizations in Japan, the employee engagement software market has considerably expanded. The number of organizations in Japan increased from 23,944 in 2016 to 29,243 in 2018, according to secondary surveys. Employee involvement is expanding in the country, with a growth rate of 22.1%.
In addition, as more technologically advanced products are adopted by organizations at various stages, digital integration in Japanese businesses improves. Organizations in this region use software to improve employee engagement and productivity in contact-based positions. Competing nations are increasing their productivity gains by developing technical expertise and implementing proven digital technologies such as cloud-based infrastructure and software, mobile devices and apps, machine learning and deep learning, and others.
According to a study conducted in over 142 countries, only 30% of Americans are engaged at work, compared to only 7% for the Japanese. Despite the fact that Japan has a large number of SMEs, its employees are actively disengaged at work at a rate that is significantly higher than any other country. This further increases the demand for such engagement software.
SMEs play an important role in the Japanese economy, accounting for 70% of national employment. However, when the availability of the internet and corresponding hardware is limited, sourcing the basic components of digital enablements, such as internet and connectivity, can be difficult, and SMEs often lack innate technology expertise, making it difficult to upskill or find talent to meet the technical expertise required to adopt digital technologies.
Furthermore, due to a lack of awareness, Japan ranked 27th in digital competitiveness and 22nd in digital talent in 2020, with single-digit penetration in areas like e-commerce, mobile banking, and digital government-service usage, and the Japanese government does not invest much in cybersecurity platforms.
Employee engagement and feedback software saw growing demand at COVID-19, owing to the increased importance of listening to input among organizations. According to Qualtrics and PricewaterhouseCoopers (PwC) surveys, after the coronavirus outbreak, 95% of IT leaders have increased the frequency with which they listen to employee feedback. Technology has made it easier for remote workers to collaborate while working from home. The importance of employee engagement is growing in firms as the number of business closures and job layoffs continues to rise. In Japan, SMEs account for more than 90% of all businesses in the country. As a result, in Japan, employee engagement has become a critical priority.
The market comprises the different content available in the software application including survey, workflow, automation, action planning, and others. In 2020, the workflow among the items controlled the market with a share of more than 30%. Automation, on the other hand, has the largest CAGR because businesses, managers, and HR personnel use company-wide employee engagement data to detect and prevent the causes of employee dissatisfaction, as well as to understand how operations changes may affect engagement. Similarly, because of their capital-intensive nature, large businesses account for around 45% of the market. Small businesses, on the other hand, have the highest CAGR because, in comparison to larger businesses, they can be more innovative and adaptable in terms of employee engagement. As a result, SMEs use employee engagement software more than large-scale organizations.
The market has vigorous competition and the key players are involved in one or the other strategy to maintain their outstanding performance and stable position in the industry. For instance, by applying creativity to all elements of its business, Qualtrics is always developing its technology and services. The R&D team at the company is constantly working to improve the quality and performance of its products. Similarly, Reflektive focuses on engagement and analytics software. It provides a collaborative goal-setting, ongoing feedback, and analytics platform that teams and individuals can use to enhance productivity, engagement, and retention with measurable outcomes. These collaborative goods are gaining popularity in the industry and assisting the organisation in securing its market position. Another leading player, Culture Amp partnered with LifeLabs, a leading leadership skill accelerator, in May 2021. This strategic alliance will help companies combine science, people, and technology together to promote positive behavior change at scale. Other key players doing well in the market are Saba Software, Achievers, Quantum Workplace, and Officevibes among others.
The market is segmented as:
By Enterprise Size
Developing economies offer lucrative opportunities for companies to expand their businesses by developing the most relevant software covering all the requirements for employee engagement. Several key players contributing to the market are:
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