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The meal vouchers & employee benefits solutions market size was valued at USD 208.34 billion in 2021. The market is projected to grow from USD 214.36 billion in 2022 to USD 320.68 billion by 2029, exhibiting a CAGR of 5.9% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with meal vouchers & employee benefits solutions experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 2.88% in 2020 as compared to 2019.
Business organizations mainly invest in meal vouchers & employee benefits solutions to improve their employees’ financial health and wellbeing. These solutions include meal coupons, travel & gift vouchers, health-related policies, and others. Furthermore, these solutions help employers keep their employees motivated and improve the overall productivity of the workplace. In addition, these solutions enable business organizations to build team member engagement activity at their workplaces.
Nowadays, key players operating in this industry, such as Circula GmbH, Sodexo Group, Edenred SA, and others, offer meal cards, travel vouchers, gift coupons, and other employee benefits services to improve the health & financial wellbeing of the working professionals. For instance, in May 2021, Sodexo launched the 'Lunch Pass card,' a digital meal card in Luxembourg. The card is beneficial for office, restaurant, and working-from-home employees.
Closure of Restaurants Amid COVID-19 Pandemic to Hamper Market
The COVID-19-related lockdown restrictions have forced restaurants, food courts, and hotels to shut down their business. As a result, working professionals have difficulty obtaining meals in restaurants and cafeterias. This factor has significantly impacted the companies’ revenues from such services, and the market scenarios experienced a slowdown in revenue generation. For instance, Edenred S.A. reported a 2.80% decline in its meal voucher & employee benefits solutions business revenues and reached USD 1,071.85 million in 2020. A decline in the company's sales revenues is attributed to the shutting down of the company's merchant partners' businesses globally.
However, continual employers' preference toward giving their employees discounted coupons, gift cards, and other benefits to maintain their employees' income level supports the market growth during the COVID-19 pandemic. For instance, in May 2021, Sodexo Group launched 'Lunch Pass,' an electronic voucher that helps maintain social distancing norms during the pandemic. In addition, in 2021, Edenred SA created a multi-benefit employee platform, 'Ticket Superflex,' for employees in Brazil, Mexico, and France. Employees can use the restaurant and other gift vouchers securely, quickly, and easily with such a platform.
Furthermore, continual companies' provision of multiple-employer benefit solutions to the client employers has assisted in the market recovery during the pandemic. For instance, in November 2021, Embroker, an employee insurance services provider, partnered with Health Advocate, a U.S.-based health advocacy company, to provide employee healthcare benefits solutions to the business organizations amid the COVID-19 pandemic.
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Increasing Adoption of Electronic Vouchers by Employers is a Prominent Trend
Nowadays, the tracking of paper-based coupons is becoming more difficult for voucher issuing companies, as there is an increase in theft and misuse, resulting in voucher waste. As a result of such coupon misuse and waste, the demand for electronic vouchers is increasing, simplifying business processes and allowing the voucher issuing company to track real-time data based on coupon usage. This factor will contribute to the demand for electronic vouchers.
Government agencies are also eager to develop new policies that benefit employers and employees, assisting organizations throughout any crisis or economic downturn. Governmental support measures are developed to enhance the employee welfare policies implemented by organizations to increase employee retention rates, which will lead to an increase in demand for employee benefits services across corporations. The measures are adopted to support the employee welfare policies adopted by organizations to harness employee retention rate and will lead to increasing demand for employee benefits services. For example, the Government of Czech Republic launched a "flat-rate meal program" in 2020 to enable Czech Republic-based employers to provide meal vouchers to their employees.
Edenred SA, Sodexo Group, Circula GmbH, and key players emphasize harnessing employee productivity by introducing various employee benefits solutions. Hence, increasing employers' focus on improving the productivity of their employees will increase the demand for these solutions globally. For instance, in February 2021, Circula GmbH launched the Circula Benefits product, where employees can receive a digital meal voucher in the existing Circula application.
Increasing Number of Working-Class Population to Augment Market
The usage of various vouchers such as prepaid cards for availing services across restaurants, travel, fuel, and other expenses drives the adoption of such facilities among the working populace. So, the increasing working population is fueling the demand for employee benefits services. According to the U.S. Bureau of Labor Statistics data, the U.S.'s civilian labor force participation rate increased from 61.5% in March 2021 to 62.4% in March 2022.
Nowadays, business organizations offer lunch and breakfast coupons to enable employees to the hassle-free purchase their meal kits. This factor will support the demand for employee meal cards among business organizations.
Furthermore, the increasing number of job-hopping is surging the demand for products such as meal vouchers & employee benefits solutions, which support in generating pleasure and satisfaction among employees and thus, in turn, aid in retaining employees for a long period. The increasing attrition rate will allow the companies to focus more on such benefits to the employees' well-being, which will boost the demand for such services.
Financial Benefits to Assist the Meal Vouchers & Employee Benefits Solutions Market Growth
The voucher system is beneficial to both employees and employers due to its financial benefits. The employers' social insurance changes are waived by offering a voucher, and the employee receives tax benefits as a kind of social benefit. Furthermore, such initiatives have been observed to increase employee productivity as good quality meals and other benefits such as concessions on train/bus tickets or offering gift vouchers and providing holidays. Therefore, employers play a crucial role in boosting employee engagement in organizations and introducing benefits that aid the global market growth. According to the report ‘2021 EBRI Financial Wellbeing Employer Survey: Focus on COVID-19 and Diversity Goals', published by Employee Benefit Research Institute (EBRI), in 2021, in the U.S., the percentage of employers interested in implementing financial wellbeing programs in their organization increased from 20% in 2018 to 34% in 2021.
Higher Cost of Meal Vouchers & Employee Benefits Solutions to Limit Market
The higher cost of meal vouchers & employee benefits solutions mainly limits its demand among the small-sized organizational groups. Additionally, data security issues in digital meal vouchers will limit the demand for these solutions.
Furthermore, paper-based meal vouchers lead to users' misuse, making it a challenge for employers. However, few employees face issues in transactions and also other security concerns. These factors are collectively responsible for lowering the demand for employee benefit solutions. According to the data provided by the U.S. Bureau of Labor Statistics (BLS), employee benefits in the U.S. accounted for around 30% of the total compensation costs in 2019. Insurance benefits accounted for around 8% of the compensation cost, and legally required benefits accounted for around 7.7%.
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Employee Benefits Segment to Dominate Global Market
The employee benefits solutions segment is expected to hold a major share in the global market due to significant business organizations' demand for these solutions to fulfill necessities in improving purchasing power and the motivation level of their employees. Additionally, the rising need for the companies to increase their operational performance has allowed them to emphasize dynamic employee benefits based on health and wellbeing to create a healthy work environment. The growing focus on maintaining work-life balance for both male and female employees has boosted employees' productivity levels in workplaces. This further drives the demand for employee benefits services, including medical insurance, mental health services, gift hampers, coupons, and others.
The employee benefits segment is further sub-segmented into meal, gift, travel, and others.
The meal segment holds the leading share of the employee benefits segment due to the growing concerns associated with ill effects on employees' health and wellbeing. This aspect allows employers to prioritize providing health and fresh meal benefits to workers to boost physical health conditions and improve their health.
The growing popularity of corporate gift-giving to its employees during festivals and other special occasions to boost employee engagement contributes to the expansion of the gift segment.
The growing popularity of travel and tourism activities among working professionals as part of their leisure activities is accelerating the expansion of the travel segment.
Furthermore, companies are becoming more aware of the availability of various employee benefits options such as health and sports vouchers and cultural coupons, boosting the others’ segmental growth.
The meal voucher segment is likely to witness the fastest growth during the forecast period of 2022-2029 as meal vouchers influence the working populace to use meal vouchers and visit the restaurants of their own choice. Furthermore, these vouchers offer convenience in choosing the meal from specific restaurants, and employees can select as per their meal preferences. This factor will facilitate the engagement of current employees and aid in the company's internal and external reputation. For instance, in May 2021, iFood and Ole, two food delivery startups, partnered with Link, a payment solution, to launch corporate meal cards and vouchers. The employees can use this card in restaurants, supermarkets, and other online purchases across groceries, bakeries, and wholesale retails.
The meal vouchers segment is further sub-segmented into book cards and digital cards.
Increasing employer demand for cost-effective book-based meal vouchers is primarily surging the demand for book-based meal vouchers, driving the segmental growth for book cards. Due to an increase in data theft resulting from digital meal voucher cards, companies are increasingly opting for book-based meal vouchers. This element will accelerate the segmentation of revenues for book cards.
The growing adoption of advanced corporate management solutions among employers and commercial organizations is driving the digital cards market. Furthermore, enterprises' continued development of novel meal vouchering solutions will inspire employers to use such solutions, resulting in the digital card segment growth.
Europe Meal Vouchers & Employee Benefits Solutions Market Size, 2021 (USD Billion)
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The global market is analyzed across North America, Europe, Asia Pacific, South America, and the Middle East & Africa.
North America is expected to hold a significant market share due to the larger presence of company authorities and greater awareness of employee perks. Better awareness that improves employee quality of life leads to the overall growth of the employer's business, contributing to the region's dominance in the global market. The U.S.'s vast working population is also expected to play a key role in the expanding use of employee benefits solutions. The unemployment rate in the U.S. in May 2019 is predicted to be only 3.6%, according to data given by the U.S. Bureau of Labor Statistics. Furthermore, the region has a robust innovation hub as there is fierce competition among organizations that provide such solutions in the competitive landscape. These factors are expected to assist the North American market growth.
Europe is anticipated to exhibit a significant presence in the market as companies receive tremendous support from its government. For instance, according to the data published by the Government of the Czech Republic, in June 2020, the Czech Republic government proposes meal voucher reform which will help employers contribute to employees' meals without using paper vouchers through a "flat-rate" meal program. Furthermore, global players in the employee solutions market are concentrating their efforts on expanding their offers into European markets by acquiring European employee benefits providers such as CIRFOOD, Circula GmbH, and the UP Group. For instance, in March 2022, EML Payments Limited (EML) entered this market in Europe by introducing employee benefits solutions and meal vouchers through a multi-year agreement with Up Spain. The European region will witness a fast growth rate for the market owing to the growing infrastructural facilities of the hospitality and hotel industry in the region.
Asia Pacific is projected to display vital growth due to many corporate businesses employing millions of people in their workplaces. Players focus on various strategies such as partnerships and collaborations to offer value-added solutions to their clients and increase their market share. Developing countries in the region, such as India, pose numerous opportunities as the employers in the region are trying hard to retain the talent in the company, and thus are keen to adopt employee benefits solutions. For instance, in August 2020, Axis Bank Ltd redefined conventional employment by launching GIG-A-Opportunities that embrace alternate work models to attract the finest talent.
The increasing female employment rate boosts the demand for employee benefits solutions in the South American region. According to World Bank Group figures, Argentina's female labor force participation rate reached 43.21% in 2020. Also, the presence of prominent companies such as VR Beneficios, Edenred SA, Monizze Nv SA, and others in Brazil, Belgium, and Argentina has largely supported the market growth in the region.
In the MEA, this market is predicted to grow slowly throughout the forecast period. Increased investment for various enterprises in the region and increased involvement of major players in this market to support the region's working professionals are expected to drive the market expansion throughout the projection period.
Merger & Acquisition Strategies Adopted by key players to Favor Market Expansion
Key players operating in the global market emphasize expanding their geographic presence to increase penetration and remain competitive. For instance, Edenred acquired a Brazil-based Cooper Card’s client portfolio in May 2020, which is involved in providing employee benefits solutions. This acquisition will strengthen Edenred’s position in the South American market. Therefore, such subsidies and voucher systems are among the best employee retention strategies adopted by organizations for employee encouragement that increases their productivity, prevents the loss of a talented workforce, and also ensures robust market positions worldwide.
An Infographic Representation of Meal Voucher and Employee Benefit Solutions Market
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The global meal vouchers & employee benefits solutions market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies and product types. Besides, the report encompasses the market trends, market segments, and highlights vital industry developments. In addition to the factors mentioned above, the market analysis encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD Billion)
By Product Type
Fortune Business Insights says that the global market size was USD 208.34 billion in 2021 and is projected to reach USD 320.68 billion by 2029.
In 2021, the market value stood at USD 208.34 billion.
The global market is expected to grow at a CAGR of 5.9% through 2022-2029.
The employee benefits segment is expected to be the leading segment under product type during the forecast period.
Increasing necessities for personal care and sanitation augment the market growth.
Edenred SA, Sodexo Group, and Circula GmbH are a few leading players in the global market.
North America dominated the global market in 2021.
Employees increasing adoption of electronic vouchers surges the product demand.
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