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What Is Driving Global Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market Growth in 2025: The Role of Rising Adoption Of Remote And Hybrid Work Models Driving The Growth Of The Market Due To Demand For Work-Life Balance And Distrib
Artificial Intelligence AI Powered Employee Recognition Analytics
Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market Size Growth Forecast: What to Expect by 2025?
The market size of the AI-driven employee appreciation analytics sector has seen significant expansion in the recent past. The market is projected to surge from $1.30 billion in 2024 to $1.60 billion in 2025, with a CAGR of 23.0%. This surge in the historical period can be credited to a higher emphasis on enhancing employee engagement, a growing understanding of employee well-being significance, an increased focus on employee satisfaction and happiness, a rising demand for bespoke recognition programs, and amplified employee expectations for regular and substantial recognition.
How Will the Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market Size Evolve and Grow by 2029?
The market for AI-enabled workforce appreciation analytics is projected to significantly expand in the upcoming years, reaching $3.62 billion by 2029 with a CAGR of 22.6%. The anticipated surge during the forecasted period is credited to factors such as the effort to mitigate workforce exhaustion through positive feedback, the increasing popularity of distant and blended work schemes, the emerging necessity for employee appreciation in dispersed workforce set-ups, focus on continual appraisal over yearly evaluations, and rising fascination towards peer-to-peer recognition initiatives. Key trends for the forecasted period consist of the amalgamation of AI into human resource systems, the exploitation of real-time analytics, the creation of machine learning methods, accessibility via mobile platforms, and the advancement of data visualization instruments.
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What Drivers Are Propelling the Growth of Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market Forward?
With the increase in focus on remote and hybrid work methods, the expansion of the AI-enhanced employee recognition analytics market is anticipated. These work models denote flexible employment schemes where workers either operate entirely from distant locations, or they share their time between distant and on-site tasks. The rising popularity of such models can be attributed to the increasing demand for a better work-life balance among employees. These flexible working conditions allow individuals to balance both personal and professional obligations more successfully while bringing down commute times. The usage of artificial intelligence-assisted employee recognition analytics is particularly useful in these remote and hybrid workplaces as it facilitates timely and data-driven recognition, irrespective of the employee's physical location, thus preserving engagement and motivation among spread-out teams. For example, in February 2022, 42% of employees opted for the work-from-home approach, up from 30% in April 2021, as per the data from the Office for National Statistics, a government body based in the UK. Thus, this mounting focus on remote and hybrid work scenarios paves the way for the growth of the AI-fuelled employee recognition analytics market.
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Which Emerging Trends Are Transforming the Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market in 2025?
Significant businesses in the artificial intelligence-fueled employee recognition analytics market are prioritizing the development of superior solutions like machine learning to increase customization, improve instantaneous responses, and deliver profound analysis on employee engagement and their performance. AI-powered employee recognition analytics use machine learning for a more personalized recognition, immediate feedback, and deeper understanding of employee performance and engagement. For instance, in May 2024, Qualtrics, an American management firm, incorporated superior AI-based advancements to its XM for Employee Experience package. This package uses machine learning to identify potential attrition threats, convert feedback into actionable insights, and identify key behavioral factors along the employee journey. With Qualtrics AI and an extensive human sentiment database at its core, the platform boosts employee engagement, retention, and efficiency. It automates details analysis and offers predictive insights, equipping managers with the capacity to make quicker, more tactical choices that boosts their teams. These features help organizations to better comprehend their employee's needs and respond proactively, leading to enhanced performance and increased employee commitment.
What Are the Key Segments in the Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market?
The artificial intelligence (AI)-powered employee recognition analytics market covered in this report is segmented as
1) By Component: Software, Services
2) By Deployment Mode: On-Premises, Cloud
3) By Organization Size: Small And Medium Enterprises, Large Enterprises
4) By Application: Performance Management, Employee Recognition, Communication Or Collaboration, Surveys Or Feedback, Learning Or Development, Other Applications
5) By End-User: Banking, Financial Services And Insurance (BFSI), Healthcare, Information Technology And Telecommunications, Retail, Manufacturing, Education, Other End-Users
Subsegments:
1) By Software: On-premises Software, Cloud-based Software (SaaS)
2) By Services: Managed Services, Professional Services
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Who Are the Key Players Shaping the Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market's Competitive Landscape?
Major companies operating in the artificial intelligence (ai)-powered employee recognition analytics market are Microsoft Corporation, IBM Corporation, Oracle Corporation, SAP SE, ADP Inc., Workday Inc., Ultimate Kronos Group Inc., Qualtrics LLC, O.C. Tanner, Cornerstone OnDemand Inc., Culture Amp Pty. Ltd., Achievers Solutions Inc., Reward Gateway Ltd., Ceridian HCM Inc., Lattice, Reflektive Inc., Motivosity Inc., Quantum Workplace Companies, TinyPulse, Peakon, Bonusly, Leena AI, Kazoo Ltd.
What Geographic Markets Are Powering Growth in the Artificial Intelligence (AI)-Powered Employee Recognition Analytics Market?
North America was the largest region in the artificial intelligence (AI)-powered employee recognition analytics market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in artificial intelligence (AI)-powered employee recognition analytics report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
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