This post is part of G2's 2024 technology trends series. Read more about G2’s perspective on digital transformation trends in an introduction from Chris Voce, VP, market research, and additional coverage on trends identified by G2’s analysts.
Companies will invest more in employee engagement, team building, and other employee experience software in 2024 to simplify workers' lives and combat loneliness – a sapping force to employee wellness in an attempt to retain top performers and keep them productive.
Employee experience software is becoming increasingly important as competition for top talent intensifies and companies realize the link between employee happiness and productivity.
In May of 2023, the U.S. Attorney General’s office released an 85-page document declaring loneliness an epidemic in the U.S.
Feelings of isolation can impact the bottom line. One 2020 study found that workplaces lose $154 billion annually in stress-related absenteeism. Another study from Emerald Insights found that lonely workers were at a higher risk of absenteeism or turnover, even given other demographic data.
Simply put, workers who feel less connected to their peers are more likely to create a stressful company culture.
Employee experience tools can be the solution to the above.
From large suites like Microsoft Viva or Oracle ME to individual point solutions that handle aspects of performance management or HR analytics, employee experience solutions directly impact an employee’s day-to-day life and how they interact with an organization.
Given that, what does the data say about how software can impact this loneliness epidemic? Let’s find out.
The loneliness issues the industry is tackling are laid bare when examining the Team Building Software category review data from July and August of 2023. The top five themes in the answers to the “business problems solved” question posted to reviewers included better connection, employee recognition, remote work, company culture, and engagement. The rest of the significant themes also followed suit.
Sentiment analysis of Team Building Software reviews based on July and August 2023.
The small business and mid-market segments boasted the most reviews for team building. The small business market has received the most reviews, just over 150% more than the mid-market.
This shows that more companies in smaller markets are considering team building software to improve team connection, making it a viable option in an employee experience tech stack.
This trend was echoed in the data for employee engagement.
Regarding Employee Engagement Software reviews for August of 2023, the word "connection", or "connect", came up in almost 20% of all reviews in August 2023, demonstrating the enormous impact of the loneliness epidemic. This number went up to 22% for the word "recognize" or "recognition".
Employee recognition comes with the bonus of making this process automatic, making the process of doling out praise to peers and managers fit easier within the flow of the day.
As for adoption of employee engagement, adoption is best in the mid-market, where respondents adopted the solution at a rate of 77.8% in August of 2023.
On the other hand, small businesses had an average rate of 77.3% compared to 63.3% of enterprises.
While smaller businesses turn more to team building and employee engagement software, which includes pulse survey functionality, it is proving to be a key tool in the mid-sized market where adoption rates are highest. Leadership needs the tool to open a line of communication with the rest of the company.
So, here’s the big question: can these tools help with loneliness and the problems that stem from it? That answer remains more unclear.
The average number of months until the return on investment (ROI) for employee engagement solutions in the mid-market has fallen steadily in 2023, a good sign for those looking to use it. It started the year out at 28.5 months but fell to 19.5 in August of 2023.
The small business segment fluctuated throughout the year, with numbers as low as 12.9 months before ROI and as high as 24.5 months. While August of 2023 saw a relatively low rate at 15.7 months before ROI, the picture painted by the entire year indicates an overall instability.
Even at best, it’s still over a year before many see ROI. Companies should strongly consider this information and factor it into their plans.
Isolation is a real threat; the sooner companies acknowledge it, the sooner they can fix it.
By examining the overall adoption rates in the small business and midmarket segment for employee engagement and team building software, it becomes clear that a change is coming.
More offices are turning to these solutions to try and develop team cohesion and morale. With the ROI unsteady and unclear, it’s sure to be a tumultuous year.
Learn more about how team building software revolutionizes employee experience.
Edited by Shanti S Nair
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