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The global 360 Degree feedback software market size was USD 680.3 million in 2019 and is projected to reach USD 1,465.6 million by 2027, exhibiting a CAGR of 10.1% during the forecast period.
Companies around the world are deploying various performance management tools and techniques to monitor and promote effective performance at the workplace. 360 Degree feedback software is one of the most significant elements of performance management as it aids the management to gain relevant insights regarding the potential performance of their workforce. Apart from these, it also provides a real-time understanding of every individual’s opportunities in the areas of learning and development. This platform enables businesses to receive and provide non-anonymous and anonymous feedback across all levels of the departments in businesses, as well as external customers.
Remote Working Practice to Accelerate Demand for Feedback Software
Covid-19 has forced many companies to scale down their business operations, made it mandatory for employees to work from home, and has pushed companies to limit their budget. This changing business environment has driven organizations to be adaptive and agile. The current remote working scenario has made it necessary for the management to keep their workforce engaged and productive. Mangers are finding it challenging to monitor, review, and judge an employee’s work performance in the current distant working environment.
360 Degree feedback software can help organizations to improve employee engagement and retention by providing timely feedback to their employees. This software also allows simple sharing and requesting feedback from both the employee and employer ends. This two-way communication would help in promoting a healthy and transparent work culture. It not only keeps the workforce engaged but also increases their enthusiasm and motivation towards work. Thus, 360 Degree feedback software is helping to provide a seamless experience to employees in this era of remote working.
On the other side, the economic downturn and the huge loss incurred due to the lockdown have forced companies to limit their budget for the year 2020. Thus, budget constraint is one of the major reasons for restricting companies to purchase new software.
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Need to Understand Connection between Workplace Experience and Mental Wellbeing is a Vital Trend
Employees’ moods or sentiments determine their level of engagement in work. The ‘State of the Global Workplace’ report mentions that around 85% of employees are not actively engaged at work if they are unhappy and unsatisfied at the workplace. Tracking the sentiments of employees and trying to resolve their issues would help in engaging them actively in work.
360 Degree feedback software provides a platform for employees to share their views, suggestions, and feedback, thereby helping companies to drive real-time accountability for all areas and touchpoints. It also helps in capturing the sentiments of employees in special scenarios such as management reconstruction, change in leadership, and business transitions like mergers. The collected data assists in quickly tracing the dynamics of the employee’s engagement or disengagement in work. This enables companies to act and resolve their issues, thereby improving employee retention rates and reducing the employee churn rate. Thus, 360 Degree feedback software is playing a vital role in understanding the connection between mental wellbeing and workplace experience.
Use of 360 Degree Feedback Software for Personal and Organizational Performance Development to Bolster Growth
The agile performance management approach provides more value to the employees by supporting their visions that aligns better with the current dynamic business models. Gathering feedback from several individuals instead of one particular senior person reduces the possible shortcomings of the opinions about any individual. 360-degree feedback software enables open communication about performance as it involves the practice of receiving and giving feedback from all directions — upwards, downwards, and sideways. This comprehensive process of feedback further aids employees to understand how others perceive their attitude, skills, and behaviors in the workplace. These would help employees to understand their strengths, weaknesses, and areas for growth.
Besides, it supports employees and their managers to use the feedback to recognize the need for training, as well as to create a professional development plan that would enhance their career growth. Organizations use this software to make promotions, appraisals, and pay-related decisions. Thus, 360 Degree feedback software synthesizes the external assessment and self-assessment to gain a clear understanding of an employee’s potential for further development.
Time Consuming Practice and Improper Use of Software May Impede Growth
Although the software comes with numerous benefits, it has some drawbacks too, which would restrict its adoption among organizations. The feedback process is time-consuming as it involves a large number of people and steps. On the other hand, as it allows evaluators to express opinions freely, it is expected to harm the evaluated employee morale, if vengeful reviews are received. Thus, when 360 Degree feedback software is used correctly, it allows employees to improve their key areas and resolve major conflicts within a team. But when done poorly, it may create anger, conflict, and mistrust among employees. These factors may refrain organizations from adopting this software.
Installed Segment to Hold Maximum Share Backed by Faster Data Entry and Reporting
On the basis of type, the market has been bifurcated into installed and web-based. Among these, the installed segment is set to capture the maximum market share as it does not require the internet to operate and can be customized according to specific needs. Also, users can control their data seamlessly. Besides, faster data entry and reporting features will also increase its popularity in the market.
The web-based software is expected to show the highest CAGR during the forecast period. This type of software allows users to log in and access data from any internet-connected devices from anywhere. Users need not have to download, install, manage, or update the software as it is always up to date. These factors are set to attract organizations to adopt web-based software at their workplaces.
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Corporate Segment to Generate Highest Share Fueled by Need to Improve Employee Performance
Based on the application, the market has been categorized into education, retail, corporate, travel and hospitality, and healthcare. Among these, the corporate segment is anticipated to lead the market with the highest share. The software is majorly used in corporations to improve employee performance. The constructive feedback approach enables employees to uncover their strengths, areas of improvement, and continuously develop their confidence.
However, the travel and hospitality segment is expected to be the fastest-growing segment during the forecast period. Using 360 Degree feedback software in the travel and hospitality industry helps in creating an environment where customers can share their views on the services being offered, and employees can share their feedback about the company. This would help companies to grow together as a team to gain a better overview of their cohesion and ambition.
Similarly, universities, school boards, and educational institutions are implementing 360 Degree feedback software for students’ and teachers’ personal development, thereby creating an educational environment that is conducive to learning. In the healthcare sector, the feedback software is used to observe and provide valuable perspectives on different aspects of the healthcare professional’s performance that are important to the effectiveness and quality of the care provided.
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Successful retailers do not just sell products but also try to attract and retain loyal customers. To retain their customers, retailers use feedback tools to gain insights from them regarding their purchase experiences. The valuable insights enable retailers to deliver personalized services and recommendations across every channel and touchpoints.
North America 360 Degree Feedback Software Market Size, 2019 (USD Million)
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By region, the market is analyzed across five major regions, namely, North America, South America, Europe, the Middle East and Africa, and Asia Pacific
North America dominates the market by holding USD 236.1 million market size in 2019. This region is considered to be home to millions of doctors, technology experts, scientists, and other professionals who are employed on a contract basis. Therefore, the demand for deploying 360 Degree feedback software to evaluate the performance and engagement of employees regularly is high in North America. Also, the rising adoption of web/cloud-based feedback software among organizations is expected to fuel the growth of the market.
Asia Pacific is anticipated to showcase the highest CAGR owing to the increasing adoption of the software in the rapidly expanding outsourcing businesses across the region. The demand for 360-Degree feedback software is gaining traction in multiple applications such as performance appraisal, performance evaluation in corporate, and training organizations. Also, the surging industrialization in the countries of Asia Pacific is expected to boost the growth of the market.
Europe holds the second-highest market share in the 360 Degree feedback software market. The increasing need to implement advanced technologies and the rising number of organizations is set to drive the growth of the market in this region. Besides, the rising demand for advanced management communication solutions to improve the output of organizations, retain employees, and better recognize and assess employee work would further enhance the market growth.
South America and the Middle East and Africa are likely to exhibit considerable growth in the market. Numerous organizations across South America are deploying data-driven decision-making software solutions for evaluating employee performance. This is anticipated to create several growth opportunities for the market in these regions. Also, the intensifying competition among organizations to deliver superior productivity is expected to drive growth.
Key Companies Aim to Transform Their Business Models to Compete in Market
Key companies in the market are focusing on attracting new users, thereby retaining their existing paid users, and improving the conversion of free users to paid ones. They are also striving to enhance the functionality and features of their existing solutions and to launch new products. At the same time, they intend to capitalize on a number of growth opportunities that will accelerate their businesses. Additionally, they are investing in collaboration and partnership activities to expand their businesses geographically.
October 2020 – SurveyMonkey launched the GetFeedback platform, its new customer experience (CX) solutions. It is a cost-efficient, easy-to-deploy CX solution that supports organizations to set up their CX program to swiftly comprehend and act on customer insights.
August 2020 – Salesforce launched ‘Feedback Management’, a suite of enterprise-level tools that would provide businesses with the ability to collect actionable and real-time feedback. This suite will also enable businesses to make relevant decisions.
An Infographic Representation of 360 Degree Feedback Software Market
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The market research report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
Value (USD million)
Type; Application, and Region
The market is projected to reach USD 1,465.6 million by 2027.
In 2019, the market value stood at USD 680.3 million.
The market is projected to grow at a CAGR of 10.1%.
By type, the installed-based segment is likely to lead in the market
The use of 360-degree feedback for both personal and organizational performance development is likely to drive the market growth.
PeopleGoal, Inc., Mettl Online Assessment, Saba Software, Appraisal360, Synergita, SAP, and SurveyMonkey are the top players in the market.
North America is expected to hold the highest market share.
Asia Pacific is expected to grow with the highest CAGR.
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