Pros and Cons of Wearable Technology in the Workplace

August 7, 2015 by

“Physically it was like getting a vaccination; a pain in the hand that was over very quickly,” explains Hannes Sjoblad, describing the moment a piercing specialist implanted a microchip under his skin.

The NFC (near-field communication) chip allows the Swede to swipe into his office, set the alarm system, register loyalty points at nearby retailers and access his gym.

Around 15 percent to 20 percent of the 250 people working at the Epicenter co-working space in Stockholm where Sjoblad is Chief Disruption Officer have opted into the program, which eliminates the need for key-fobs or electronic entry cards. Since announcing it earlier this year, Sjoblad has been flooded with inquiries from companies looking to adopt a similar system. “Security companies, office operators, real estate companies and even military organizations want to see how this technology works,” Sjoblad says.

It’s all part of a trend toward using technology – usually wearable devices like smartglasses, wristbands, smartwatches and badges rather than implantable ones – to monitor employee movements and improve productivity. The promise of data-driven efficiency can be alluring to the board room, but it comes at a cost: the employee’s right to privacy.

Related: How Wearable Devices Could Disrupt the Insurance Industry

“It started with big data discussions around gathering business insights and not having the human accounted for in that data puzzle. Wearable technology can help make the workforce visible in that,” says Chris Bauer, Director of Innovation at Goldsmiths, University of London.

Devices must be paired with a powerful back-end system, however.

“Wearables are not useful on their own,” adds Guillaume Roques, head of developer relations EMEA at Salesforce. “They have to be part of the move toward a system of intelligence, which combines big data, the cloud and analytics. Connecting them all together is a big challenge.”

A key trend is companies using wearable devices to track employee health – giving staff fitness monitors to keep tabs on their activity levels as part of “wellness” programs. This data can be tied into health insurance policy premiums or other incentive programs to reduce healthcare costs.

Oil giant BP, for example, has distributed more than 24,500 Fitbit fitness trackers to staff of its North American business in 2015 alone using such an incentive program.

“These programs are often strongly linked to companies negotiating lower rates on collective insurance policies. Underwriters are more trusting of these devices than the self- reporting of employees,” explains Bauer.

According to Gartner around 2,000 companies worldwide offered their staff fitness trackers in 2013, rising to 10,000 in 2014. The firm predicts that by 2016 most companies with more than 500 employees – will offer fitness trackers.

In industries with high-risk roles – such as mining and oil and gas – wearables can play a critical role in safety.

Truck drivers at Rio Tinto’s coal mines in Hunter Valley, Australia, for example have been using a device called “SmartCap”which looks like a regular baseball cap but has sensors to detect the alertness. It provides an early warning for when a driver is approaching a “microsleep,” designed to reduce fatigue-related accidents.

Meanwhile XOEye has developed a set of industrial smartglasses that can capture HD video of complex problems encountered in construction, manufacturing or field services. Two-way communication means that a remote viewer – be it a manager or a technical specialist – can guide or train the wearer from afar. APX Labs is working with Salesforce on a similar system, called Skylight.

One of the best established applications for body-worn devices in the workplace is to help streamline logistics. For example, U.K. supermarket chain Tesco gives armbands to staff in a distribution center in Ireland. These can track the goods being transported across 9.6 miles of shelving, eliminating the need to mark clipboards and giving mangers estimated completion times.

Similarly the “pickers” who work in Amazon warehouses wear GPS tags and have a handheld scanner that tells them the most efficient route to take to collect an item for delivery.

While wearable technology can bring huge benefits, they also bring challenges, particularly as devices start to gather more and more personal and biometric data. Consumer-grade gadgets don’t always have rigorous encryption and other protections to safeguard personal data, which could leave companies exposed to data leaks or theft.

“We hear about data breaches every week – and it’s naive to think that the same won’t happen with these miniaturized devices,” says technology lawyer Paul Lanois.

There’s also the risk of inadvertently creating an oppressive working environment that damages staff morale.

“It can be seen as an intrusive surveillance tool rather than something that improves productivity or performance,” explains Bauer.

U.K.-based data science consultancy Profusion found this out the hard way. It ran a study to see what data employers could glean from wearable devices 24 hours per day, seeking to improve the wellbeing of the workforce. The research involved tracking 171 different metrics including heart rate, activity levels, location and other data taken from smartphone applications.

“One participant found the idea of continuously checking his heart rate made him nervous,” says Profusion Chief Executive Officer Mike Weston. Another feared that her line manager would be keeping track of her self-reported stress levels. “She felt uncomfortable being under the microscope.”

Weston says this shows how careful companies need to be when implementing wearable technology program. “If there’s a creepiness factor around what you’re doing, you probably shouldn’t be doing it.”

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