Publication | ThinkSet

Employee Monitoring Could Make Businesses More Profitable—And Employees More Satisfied

Andres Alva

July 25, 2019

How the construction and life sciences industries contemplate the use of Bluetooth technology to battle rising costs and performance delays

The construction business has a crisis on its hands, beset by soaring costs and projects that almost always take longer than expected. Just ask the leader of the largest construction company in the US.

“Our house is on fire,” said Brendan Bechtel, CEO of the company that bears his surname, at an industry conference in 2016. “If we don’t address the problem, we may cease to exist as an industry and … customers will cease to have confidence that we can deliver.”

Ninety-eight percent of construction projects were experiencing cost overruns or delays, Bechtel said, citing data his firm had collected. The average cost increase was 80 percent, while the average schedule delay for large projects was 20 months.

Three years later, the house is still burning. And it has the attention of executives across the industry. Much of last December’s Construction SuperConference focused on delivering on time and at cost.

That discussion focused on ideas including a potentially game-changing technology: using Bluetooth to monitor employees’ movement on construction sites.

The proposition may come as a surprise—subjecting workers to constant surveillance would set off all kinds of privacy alarms at some businesses—but if construction leaders, who have historically been slow to adopt change, embrace enhanced monitoring, it could not only help save the construction business, but also serve as a model for other industries.

And the increased monitoring could have benefits for a group you might not expect: the workers themselves.

Privacy and safety: A delicate balance

For employees, the idea that their employer will be monitoring their every move during the workday isn’t likely to gain enthusiastic acceptance unless it’s properly introduced and explained. State and federal laws place restrictions on surveillance of employees.

Beyond the legal challenge, employers run the risk of alienating workers—including top performers, who may feel they’ve earned the right to do their jobs without being monitored. Imposing monitoring without communicating why it’s being implemented could break those employees’ trust and sap their creativity and ingenuity.

“When they are surveilled, employees are likely to perceive that they have lost autonomy because they have to be careful of how they behave,” says Cristina Banks, director of the Interdisciplinary Center for Healthy Workplaces at the University of California, Berkeley.

However, Banks points out that employees are likely to be receptive to monitoring it they understand the business need—and the way it benefits them. Fortunately, construction leaders—and executives across industry—can point to other sectors where employee monitoring has been rolled out and implemented without significantly damaging workforce relations.

The rule change that ushered in monitoring

More than a decade ago, a change in the Federal Rules of Civil Procedure (FRCP) created a path for e-discovery, which laid the groundwork upon which many companies have created technology to facilitate that process. On December 1, 2006, an amendment to the FRCP allowed investigators or the parties to lawsuits to access a broad swath of information from the other side’s electronic communications. That included email and a variety of other data stored on the organization’s computers.

The rule affected every industry, but heavily regulated businesses felt it most keenly, as they were most likely to find themselves involved in government investigations. Among those industries, companies that relied on large volumes of sensitive information had to move quickly to track communications in the event of an investigation or discovery request.

The advent of tools necessary to fulfill these obligations quickly enabled new and more sophisticated ways to identify and quarantine relevant data for litigation purposes. It also ultimately provided for sweeping changes in the operations of compliance programs at life sciences manufacturers. Life sciences compliance expert Katie Norris calls it “risk monitoring.”

“Risks manifest when employees interact with customers and other third parties,” Norris says, citing inappropriate payments, violations of policies and the potential to raise concerns regarding possible quid pro quo interactions. “We work with companies both large and small to perform this type of monitoring. It enables these companies to garner incisive fraud-risk indicators, filtering through thousands of emails and other documents to efficiently separate the signal from the noise, home in on key issues and facilitate meaningful further evaluation of potential concerns using a risk-based approach.”

Life sciences leads the way

In the wake of the amendment executives in the life sciences sector, a heavily regulated industry where sensitive information abounds, set about updating their compliance programs to include various forms of compliance monitoring. Given the myriad sensitivities life science companies deal with, moving quickly to implement these new technologies provided companies with an opportunity to more confidently protect their assets.

But Norris says what we’ve seen in the past decade-plus is just the beginning, as life sciences companies are already moving to real-time tracking, especially using artificial intelligence. Some of this already exists in formative iterations, she says, and more dynamic and real-time methods will develop over time.

The evolving construction industry

For construction companies, the use of employee monitoring is still around the corner—but the corner is fast approaching as industry executives rush to address the cost overruns and delays that Bechtel called out.

Part of the reason those challenges have proven so intractable is because managers lack asset and production tracking that would allow them to see costs growing and delays developing. At the project and corporate levels, leadership faces a complete lack of reliable real-time data and actionable information coming from construction sites, which are often large, complex operations.

The challenge is also made greater because, especially compared to industries like life sciences, construction businesses are anything but tech savvy. Less than half (48 percent) of the respondents of KPMG’s 2017 Global Construction Survey said their company had a data/technology strategy or road map. When respondents—who included senior leaders from organizations that carry out capital construction projects and senior leaders from engineering and construction companies—were asked to rank their organizations on technological maturity, only 5 percent considered themselves “cutting edge.”

But the numbers were not all bleak. Seventy-two percent of survey respondents felt that technology, innovation or use of data played a prominent role in their strategic plan or vision, and 55 percent considered the industry ripe for disruption. KPMG put the onus directly on construction leaders: “Owners and contractors should also accelerate the use of technologies that impact labor and material installation, to increase productivity among craft and labor workers,” wrote John Herzog, managing director, Major Projects Advisory, KPMG in the US, in the 2017 report.

Two years later, the industry is still clearly in the early phases of assessing the viability of employee monitoring, but chatter among executives is increasingly turning to the idea of attaching small devices (like Bluetooth) on workers and equipment to allow management to continuously collect and transmit data, securely uploading it to the cloud. The data could then be processed and analyzed to provide information, analytics and visualization in real time for clients.

The business (and employee) case

Construction projects require a lot of workers performing tasks that are relatively easy to track and quantify—at least, compared with the work office workers do—if you have the right equipment. That makes construction a prime laboratory for employee monitoring technology; what will likely emerge from job sites over the next few years could provide valuable lessons across a broad swath of business sectors.

But generally speaking, why should business leaders consider employee monitoring and related technology in the first place? How could they use the data to improve their bottom lines—and even their employees’ lives?

There are a handful of ways. For example, in the construction projects:

Better manpower decisions: With Bluetooth monitoring, you know exactly who on your workforce is doing what, when and where. With this knowledge, managers can make better decisions to make projects more efficient. If you have employees working under their capacity, they can be relocated to another project or assignment where they will be more useful and productive.

Better projections: Knowing exactly what your workforce is doing and how long it is taking them to do it can provide data to project how long projects will take and will forecast how many people will be needed for particular tasks.

Claims avoidance: If a contractor or subcontractor makes a loss of productivity claim against an employer or a claim is made against a construction contract, Bluetooth tracking could help managers and lawyers retrieve historical data quickly and accurately. Having this data could also help prove—to courts and insurance companies—that the organization was following best practices when an accident happened.

Improved safety: Employers can set up smart alerts through Bluetooth devices, so they know immediately if an accident or injury happens. For example, in a partial building collapse (and also during fire drills or underground work in mining and oil platforms), an employer could instantly know exactly where every employee was located. If a worker was trapped, their employer could direct rescuers to their exact position.

This last point should not be overlooked—as it’s perhaps the best argument for why employees should embrace increased monitoring. Industry veterans certainly don’t need to be told how dangerous construction sites can be. In 2017, 971 out of 4,674 worker fatalities (20.7 percent) in private industry occurred in construction.

Personal privacy and employee concerns

Still, employees accustomed to reading headlines about computer hackers, massive data breaches and constant surveillance are likely to express skepticism at the idea of being monitored by their employers. They may point to a variety of legal and regulatory protections relevant to monitoring, in addition to fundamental personal-privacy concerns.

Employers should consult applicable state and federal law on this front before implementing any form of employee monitoring. “The surveillance would have to be the result of a legitimate business purpose or a program that employees are made aware of and consent to at the onset of employment,” says the University of California’s Banks.

But as she notes, it is more than just the law employers should be concerned about.

“When privacy is removed without notice to the employee and is revealed after employee onboarding, the surveillance is likely to have the effect of breaking the ‘trust’ between the employee and the organization,” Banks says. “Trust is essential for developing a culture of cooperation, engagement and organizational commitment, and employees want to believe that leadership would not take advantage of that trust.”

This loss of autonomy can lead to health and wellbeing problems with employees. Banks points out that this can impact high-performing employees the most because, to them, monitoring seems unnecessary. She offers employers four key considerations before starting an employee monitoring program:

  1. Ensure that employees have clearly understood and accepted the monitoring program.

  2. Clearly communicate the benefits employees will receive from the program. Evidence of the benefits has to be real.

  3. Determine if consent is required under state law. If it is, attain it explicitly.

  4. Weigh organizational risk against the risk of harm to the employee. Employers should reserve employee monitoring for when and where it is truly needed.

By taking those steps, and especially by communicating how employees will benefit by becoming more effective and safer in their jobs, it’s certainly possible to gain their buy-in and support.

“Employees may perceive that by collecting such information, the organization could reduce inefficiencies, remove barriers to execution or improve their individual productivity,” Banks says. “If so, it would enhance employees’ acceptance of surveillance and increase their positive feelings toward the organization.”

Given that the employee monitoring techniques and methods emerging in construction, and those that have already emerged in life sciences, are likely to sweep through workplaces around the world in the coming years, employers across every industry should take heed of Banks’ final piece of advice when thinking about selling surveillance to their employees.

“The key is employees believing that monitoring is done for their own benefit, and not just for the organization’s,” she says.

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Andres Alva

Managing Director