Market Overview

Size of the domestic cloud-based diagnostic employee engagement survey market is estimated at 5,000 million yen for 2021, and 6,600 million yen for 2022, based on the sales at businesses. While the services were initially deployed chiefly by small business ventures and startups, adoption by larger enterprises in recent years propelled the market to maintain double-digit growth year-on-year. Market growth has also been spurred by the growing corporate interest in SDGs, ESG investment, and human capital management (HCM). Although the demand for mental healthcare that surged during the pandemic has lost momentum, employee engagement initiatives remain a recipient of continuous investment. Considering the fact that many companies are in the phase where not only do they visualize the current employee engagement status but also utilize the assessment results for improving employee retention rate and increasing business performance, the demand for employee engagement survey is forecasted to increase further.

Noteworthy Topics

Catering to the Needs of Managing Diversity & Reducing Management Workload

A trend has been seen among service providers of diagnostic employee engagement surveys to enhance services to give attention more on personal traits of employees and physical conditions. Visualization and assessment of organization’s current status is not enough to improve employee engagement in today’s complex organization, which has greater inclusion of employees across a variety of backgrounds. Faced with the challenges of managing diversity, the engagement survey providers are embarking on enhancing services so that their user companies can make use of surveys to improve engagement with employees based on their personality traits and physical conditions.

Meanwhile, another trend is the release of functions designed for mitigation of HR’s and managers’ workload, as their tasks increased along with the analysis of visualized employee data and development of measures for challenges disclosed by the analytics. Recognition is growing among user companies that, to restructure organization based on employee engagement, it is critical to cater to the needs of managers using services such as one-on-one meeting assistance and communication support.

Future Outlook

The cloud-based diagnostic employee engagement survey market is forecasted to rise to 121.2% of the preceding year in 2023 to 8,000 million yen. While the mandate to disclose human capital investment information in financial statements draws attention on employee engagement, many companies are not ready for disclosure, as seen at the start of 2023 when most of them were just eying each other on how others comply with the mandate. Nonetheless, the number of companies deploying employee engagement survey is expected to expand by 2024 to comply with HCR information disclosure. Still, in view of the cloud-based diagnostic employee engagement survey market alone, the growth rate will remain moderate as the competition is intensifying with employee experience platforms and talent management systems.

Research Outline