Employee Recognition And Reward System Market Research, 2032
The global employee recognition and reward system market was valued at $15.8 billion in 2022, and is projected to reach $65.3 billion by 2032, growing at a CAGR of 15.6% from 2023 to 2032.
The market for employee recognition and reward systems is the segment of the economy that specializes in offering all-inclusive products and services that help businesses recognize, value, and compensate their workers for their contributions. The development and application of initiatives, platforms, and tactics aimed at improving worker motivation, engagement, and general job satisfaction are the main focuses of this market. Market-wide recognition programs comprise both formal and informal means of recognizing individual and group accomplishments. These include manager-led gratitude campaigns, peer recognition, and employee of the month awards. Moreover, in order to recognize and inspire employees, reward systems include monetary incentives and material perks. This could take the form of cash incentives, gift cards, more vacation time, or intangible benefits like flexible work schedules. The growing awareness among organizations of the benefits of employee recognition on workplace culture, productivity, and talent retention is driving the market for employee recognition and reward systems. Furthermore, the market responds to companies' efforts to establish work cultures that recognize and reward employee contributions by offering a range of solutions designed to satisfy various organizational requirements. Essentially, the market tackles the critical significance of rewarding and recognizing workers as a calculated move towards creating a healthy workplace culture, increasing employee's engagement, and eventually boosting an organization's overall performance.
Furthermore, surge in strategic staff engagement and output and attracting and retaining talent in competitive markets primarily drive the growth of the employee recognition and reward system market. However, budgetary restrictions and ROI Issues and opposition to shift and harmonization with culture hamper market growth to some extent. Moreover, data-driven personalization and decision-making is expected to provide lucrative opportunities for market growth during the forecast period.
The employee recognition and reward system market is segmented on the basis of component, enterprise size, deployment mode, end user, and region. On the basis of component, it is divided into solutions and services. On the basis of enterprise size, it is bifurcated into large enterprise and small and medium-sized enterprises. On the basis of deployment mode, it is bifurcated into on-premise and cloud. On the basis of end user, it is fragmented into IT and telecom, healthcare, manufacturing, transportation and logistics, BFSI, retail and others. On the basis of region, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The report focuses on growth prospects, restraints, and analysis of the employee recognition and reward system trend. The study provides Porter’s five forces analysis to understand the impact of numerous factors, such as the bargaining power of suppliers, the competitive intensity of competitors, the threat of new entrants, the threat of substitutes, and the bargaining power of buyers on the employee recognition and reward system market share.
On the basis of component, solution segment dominated the employee recognition and reward system market in 2022 and is expected to maintain its dominance in the upcoming years owing to the dedication of utilizing technology, customization, integration, accessibility, security, and ongoing development propels the market growth significantly. However, the services segment is expected to witness the highest growth, owing to organization to ensure the recognition platform is properly integrated with current systems, supporting change management, and providing training to employees.
Region-wise, the employee recognition and reward system market size was dominated by North America in 2022 and is expected to retain its position during the employee recognition and reward system market forecast period, , owing to the increased focus on boosting a healthy workplace culture and raising employee satisfaction aiding the growth of the employee recognition and reward system market. However, Asia Pacific is expected to witness significant growth during the forecast period, owing to promote an environment of gratitude and inspiration, providers create platforms that enable peers and supervisors to give prompt praise and incentives which is expected to fuel the market growth in this region.
The key players operating in employee recognition and reward system industry the include Salesforce, Inc. UKG Inc., Kudos®, Inc., Dash Solutions, Inc, Terryberry, BI WORLDWIDE™, Motivosity Inc. O.C. Tanner, and Smartly, Inc. Furthermore, it highlights the strategies of the key players to improve the market share and sustain competition in the employee recognition and reward system industry.
Recent Partnership in the Employee Recognition and Reward System Market
On October 2023, Kudos®, the employee recognition platform that transforms workplace cultures with new technology partnered with UKG, a leading provider of HR, payroll, and workforce management solutions. With 350 technology and services partners, UKG provides one of the largest and most collaborative partner ecosystems in the Human Capital Management (HCM) industry focused on creating better employee experiences for all people and improving business outcomes. With this partnership, organizations that utilize both Kudos and the UKG Pro suite can benefit from automated integration, user provisioning, and data updates.
On March 2021, Salesforce partnered with Tanium to create IT Service Center (ITSC), a critical tool that helps IT teams better support employees from anywhere. This is an incredible cross-team, cross-company initiative leveraging Tanium’s real-time asset management capabilities, Service Cloud’s case management technology, and the power of the Salesforce Platform for automation, integration, and personalization.
On August 2023, Xoxoday, a leading global technology company that helps organizations digitize and gamify their engagement, incentive, reward, commissions and loyalty programs, partnered with Kloudrac, a leading provider of Salesforce consulting and implementation services. This partnership enabled Xoxoday to extend its reach and offerings to a broader range of Salesforce customers while also providing Kloudrac's client's access to Xoxoday's innovative suite of engagement, incentive and rewards solutions.
Recent Collaboration in the Employee Recognition and Reward System Market
On June 2022, UKG collaborated with Uber for Business (the rideshare company’s enterprise division). Through this collaboration, organizations using UKG Dimensions can offer rewards such as a voucher for a ride with Uber or a meal delivery with Uber Eats for picking up hard-to-fill shifts. The UKG Incentives program, powered by Uber for Business is available to UKG Dimensions customers through the UKG Marketplace. From there, managers can assign a voucher for a reward to an open shift. The employee who accepts the shift will instantly receive the voucher to redeem in the Uber app. Managers get shifts filled, go-getters get Uber coupons, and everybody wins.
Recent Product Launch in the Employee Recognition and Reward System Market
On February 2022, Terryberry launched a new reward platform for employee recognition. The new Reward Platform offers a best-in-class shopping experience for all reward recipients, anywhere around the world. With fulfillment centers across the globe, the Terryberry Reward Platform offers both globally and locally sourced items appropriate for all reward recipients. Having served over 44,000 clients worldwide, Terryberry is thrilled to continue its tradition of providing world-class solutions.
On March 2023, Terryberry launched a new Offers and Discounts platform, designed to help as many businesses as possible to support their people during the cost-of-living crisis, with the platform giving users potential savings of up to £3000 per year. The idea behind getting together their Employee Benefits and Reward and Recognition platform is so that Terryberry offer businesses a seamless journey and a single place to house everything needed to create a culture of recognition within an organization.
Top Impacting Factor
Strategic Staff Engagement and Output
The market for employee recognition and reward systems is becoming crucially important to organizational dynamics as a result of strategic employee engagement and productivity. This is essentially because employees who are involved in their work are not only happier in their positions but also considerably more productive. Organizations are acknowledging the strategic importance of creating a work environment that leverages employees' intrinsic drive and goes beyond traditional job duties in a world where talent is a valuable resource. Moreover, systems for employee recognition and rewards serve a strategic function in this context by offering an organized framework for recognizing and rewarding actions that support organizational objectives. Organizations may directly influence engagement levels by establishing a positive feedback loop through official programs or informal processes, but also by proactively recognizing and rewarding contributions. Since engaged workers are more likely to make discretionary efforts, show better levels of innovation, and make significant contributions to their teams and the success of the company as a whole, this has a domino impact on productivity. Furthermore, recognition programs play a strategic role in fostering employee engagement that goes beyond individual contributions. Acknowledgment based on collective successes cultivates a cooperative environment, encouraging cooperation and a feeling of satisfaction among team members. In response to this driving, the market offers creative solutions that help organizations strategically match these initiatives with more expansive engagement and productivity targets in addition to facilitating individual recognition.
Attracting and Retaining Talent in Competitive Markets
The market for employee recognition and reward systems is primarily driven by the demand to attract and retain talent amid cutthroat competition. This highlights the vital role that incentives and strategic recognition play in today's workforce. Attracting and keeping top personnel has become a strategic necessity for long-term success as companies navigate a cutthroat global labor market for qualified individuals. In extremely competitive marketplaces, where there is a greater need for talented workers than there is talent available, companies need to set themselves out as employers of choice. This is where incentive and recognition programs for employees become effective instruments. These programs go above and beyond conventional pay plans by providing a comprehensive method of recognizing and valuing workers' efforts. In response to this trend, the market offers creative solutions that meet the changing needs of a workforce that demands meaningful recognition for their work in addition to monetary reward. Through the promotion of a healthy work environment, employee recognition programs play a vital role in talent retention. When workers are made to feel important and valued, their commitment to the company grows, which lowers turnover rates. In response to this need, the market provides customizable recognition solutions that accommodate various organizational cultures and employee segment preferences.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the employee recognition and reward system market analysis from 2022 to 2032 to identify the prevailing employee recognition and reward system market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the employee recognition and reward system market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global employee recognition and reward system market trends, key players, market segments, application areas, and employee recognition and reward system market growth strategies.
Employee Recognition and Reward System Market Report Highlights
Market Size By 2032
USD 65.3 billion
CAGR of 15.6%
2022 - 2032
By Deployment Mode
By Enterprise Size
By Industry Vertical
Key Market Players
Workstars, Smartly, Inc, Motivosity Inc., Kudos®, Inc., Dash Solutions, Inc, UKG Inc., Terryberry, O.C. Tanner, BI WORLDWIDE™, Salesforce, Inc.
The Employee Recognition and Reward System Market is seen as a crucial element in forming organizational culture, promoting employee engagement, and ultimately influencing overall business success. Key players believe that incentive and recognition programs are essential to coordinating employee efforts with the organization's strategic objectives. These systems are viewed not only as bonuses, but as strategic instruments, to support desired performance, values, and behaviors that facilitate the main goals of the company.
Moreover, many companies see sophisticated recognition programs as essential components of employee management strategies as they understand that attracting and keeping great personnel is a crucial competitive advantage. These initiatives are essential to building a reputation as an employer that values and appreciates its employees, encourages loyalty, and lowers turnover. The leading companies place a strong emphasis on how employee engagement and productivity are affected by recognition and reward programs. Workers that are more engaged are viewed as more dedicated, creative, and eager to go above and beyond. Furthermore, programs for employee recognition are thought to be levers for improving the whole work experience, which raises productivity and job satisfaction. Enterprises want a comprehensive grasp of the financial return on investment associated with recognition and incentive initiatives. In addition to assessing these efforts in terms of employee happiness, they also look at quantifiable business results like higher output, lower attrition, and improved organizational success. Additionally, the employers understand the strategic importance of the market for employee recognition and rewards in determining the performance of their organizations. In an increasingly competitive talent landscape, these strategies are seen as critical instruments for promoting employee engagement, generating cultural alignment, and achieving measurable business results.
For instance, in June 2022, UKG collaborated with Uber for Business (the rideshare company’s enterprise division). Through this collaboration, organizations using UKG Dimensions offer rewards such as a voucher for a ride with Uber or a meal delivery with Uber Eats for picking up hard-to-fill shifts. The UKG Incentives program, powered by Uber for Business is available to UKG Dimensions customers through the UKG Marketplace. From there, managers assign a voucher for a reward to an open shift. The employee who accepts the shift will instantly receive the voucher to redeem in the Uber app. Managers get shifts filled, go-getters get Uber coupons, and everybody wins.