COVID-19 has ushered in a new era in human resources that is focused on enhancing employee experience and modernizing employee engagement with digitally enabled solutions.
Everest Group reports that the rewards-and-recognition (R&R) solutions market grew at a rate of 9-11% in 2020 as enterprises globally grappled with COVID-19. COVID-19 brought uncertainty and change to many organizations with respect to managing and motivating their workforces. The pandemic challenged organizations to align culture and values, offer engagements valued by employees, and provide face-to-face interactions and feedback. In the midst of these challenges, Human Resource (HR) personnel tasked with enhancing employee experience and building more resilient organizations looked to third-party support in the form of R&R solutions, a market which Everest Group estimates is currently valued at US$2.7 to $2.9 billion worldwide.
Although enterprises took measures to save on their rewards budgets in 2020 and decision making slowed down, recognition platforms were still seen by senior stakeholders to be one of the key ways to solve issues pertaining to employee productivity, motivation and engagement. Going forward, Everest Group predicts the R&R solution market will grow at 18-20%, reaching a US$3.3 to $3.5 billion valuation by 2022.
These findings and more are shared in Everest Group’s recently published “Rewards and Recognition (R&R) State of the Market Report 2021: The Era of Modernizing Employee Engagement.” This report provides comprehensive coverage of the R&R market and analyzes it across various dimensions, such as buyer objectives, market overview, evolving solution characteristics, and solution provider landscape.
Highlights from the R&R State of the Market Report 2021
- COVID-19 brought unprecedented uncertainty in many organizations and now buyers are seeking holistic solutions to build employee resilience and future-proof their HR strategies.
- The majority of enterprises adopting R&R solutions were small- or mid-sized enterprises. Buyers from manufacturing, financial services, and healthcare industries have led the adoption of R&R solutions, while newer industries have experienced a rise in demand.
- North America continues to constitute the largest market and has the highest revenue contribution, whereas the UK and Asia Pacific are on a growth trajectory.
- Buyers of R&R solutions prefer flexible solutions that cater to their company-specific requirements. To improve overall buyer satisfaction levels, solution providers need to bring in next-generation technology solutions, expand their existing offerings, and increase the flexibility of their solutions.
- R&R providers are adopting a multi-prong approach to revamp their present capabilities:
- – Developing smarter platform capabilities. R&R solution providers are infusing artificial intelligence, machine learning, automation and analytics into their solutions to develop more intelligent, intuitive and user-friendly platforms.
- – Expanding beyond R&R capabilities. R&R solution providers are integrating their solutions with other collaboration and HR tools, unifying with social engagement platforms, and offering fitness and wellness platforms.
- – Diversifying rewards catalog. R&R solution providers are offering extensive catalogs based on the evolving needs of buyers. Rewards may comprise merchandise, gift cards and e-cards, discounts and perks, experiences and donations to favorite charities.
- – Exploring new and innovative commercial models, such as more transparent and less complex pricing models.
- Four companies are considered leading solution providers in the space, and these four contributed more than 50% of the market share in terms of revenue in 2020: O.C. Tanner, Engage2Excel, Madison PG, and Workhuman.
- Challenges faced by enterprises due to the pandemic will have a long-term impact on the way they engage with the employees. They will continue to explore new strategies
to deliver a superior employee experience. Enterprises will focus on employees’ mental and physical well-being and will ramp up post-implementation support and internal communication initiatives to promote R&R practices.
About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com