The term Internet of Things describes an emerging environment where Internet-connected devices automatically and continually transmit status information. Anyone with a Nest Thermostat in their house or a Fitbit on their wrist is already using an Internet of Things, or IoT, device. And outside the home, many systems track and communicate about our daily activities without our knowledge.
This is just the beginning. In a world where data are a currency, companies cannot afford to neglect a form of big data that requires no human intervention to acquire, yet can produce immense business value. Thus, corporate IoT use is surging. It is projected that more than 50 billion devices will be connected to the Internet within five years. Companies recognize the Internet of Things’ potential to obtain useful data about all facets of their business operations and as a result, they’re aggressively bringing these systems online.
The Internet of Things doesn’t rely on data entered directly by employees, but it has become an influential source of data about them. Studies suggest nearly half of organizations plan to adopt employee-focused IoTdevices within two years. Various systems already monitor, track and report on employee activity, productivity and even health. However, their use poses risks for employee trust and retention. Leaders have to act as keystones to ensure data gathering doesn’t harm employees’ interests.
How the IoT Affects Employees
Though gathering employee-related data is projected to increase dramatically, it is already underway in many organizations. Some of the ways businesses capture and use workplace data about employees include:
- Biometric sensors track where employees are within the company’s facilities, whom they interact with and even the tone and speech patterns of their conversations.
- Wearable devices continually gauge employee productivity — for example, in a warehouse — based on their speed of movement, how long they remain in one place and their efficiency of movement based on how often they need to retrace their steps to complete a task.
- Location sensors estimate when an employee will reach their destination for a meeting, and if a delay is projected, automatically send a notification to alert other attendees to delay the meeting start time.
- Fitness monitors prompt desk-based employees to be more active and tailor health recommendations to match employee activity levels.
- “Augmented reality” apps and glasses provide employees with up-to-date information about their surroundings, recording and recommending actions in real time.
- Devices attached to company-provided transportation gauge occurrences of drivers exceeding speed limits or stopping at locations outside their prescribed routes.
- Devices track the actions taken by expert operators of complex systems such as submarines and nuclear power plants, and use this information to inform training programs for novice users.
In addition, computers, tablets and phones already connected to the Internet have become prolific sources of data about employee productivity and susceptibility to nonwork diversions. Drawing on advances, these devices also have become “smarter” in their ability to recommend, for example, breaks for employees staring at a screen for too long, or to suggest topic ideas when their activity levels suggest they are struggling to complete a written report. All of this information about individual employees is subject to company review and corresponding action, and can be incorporated into an employee’s personal record within a human resource information system, or HRIS.
Do IoT Benefits Match Up to Potential Consequences?
For companies able to successfully harness a vastly expanded range and depth of workforce data, the benefits can be massive. Research has projected employee IoT productivity gains of 8.5 percent and job satisfaction gains of 3.5 percent. Scaled across a workforce, these effects can generate huge company returns from the technology investment needed to put IoT devices in place.
These advantages can be further multiplied by using IoT analytics to better understand and predict employee behaviors. Successfully executed, future-oriented HR analytics are linked to an organization’s financial strength, yet high-quality, individual-level data to drive these analytics are limited or unavailable for many jobs. If the Internet of Things can generate a previously unimaginable level of detailed information about the activities and outcomes of a full range of jobs, an organization’s IoT energies will prove truly transformational for the precision and predictive power of its talent analytics.
Leaders also must consider the human side of these efforts. Ignoring and failing to act on human facets can harm the workforce, negating many IoT benefits. Consider these four areas of potentially negative impact on employees from poorly designed and implemented IoT systems:
- Employee resentment and disengagement: stems from a perceived lack of privacy and control over what information is collected about them and how it is used.
- Legal action: an employee can — and has — filed suit against a former employer if fired after becoming frustrated with and uninstalling a tracking app.
- Increased stress levels: results from heavier scrutiny given to the employee’s to-the-second actions; stress can degrade health.
- Damage to the company’s brand as an employer of choice: if the organization is seen as overly intrusive and infringing on employee rights.
However, companies using also can boost employee job satisfaction. What factors help to generate a positive employee reaction to IoT? How should leaders influence these efforts? To answer these questions, first ask if are leaders prepared to serve as the agents to make sure IoT-produced employee data is accurate and appropriate.
The Internet of Things falls within a broader category of technology that leaders are asked to use to improve their — and their employees’ — effectiveness. A leader’s general comfort and familiarity with technology has important implications for the newer systems and devices that become part of employee-focused IoT projects. Technology is only as effective as leaders’ confidence using it and advocating it to employees. Unfortunately, many leaders fall short on technology savviness, generating risk for new workplace technologies, the Internet of Things among them.
In Development Dimensions International’s “Global Leadership Forecast 2014 | 2015 Multinational Sub-report” research with more than 3,000 leaders from multinational corporations, summarized, only 60 percent report high confidence leveraging technology to improve their workforce (Editor’s note: The author works for DDI). Signs are scarcely more positive for the typical leader’s ability to use workplace data — data IoT will generate at a far larger scale than currently available — to guide business decisions.
Only 2 in 3 leaders were highly confident making data-driven decisions. Even for learning purposes leaders exclude many new technologies — including social, mobile and online learning — from their lists of most-effective development methods. Further, technology for workforce improvement remains largely unproven even for the newest generation of leaders. While a sobering 5 in 10 leaders felt technology made it easier for them to develop as a leader, a mere 43 percent of millennial leaders shared this opinion (Figure 1, p. 46).
Maximize the IoT Payoff
Leaders seeking to actively engage with IoT technologies and to act as a stronger bridge between corporate and employee interests can shape higher-return, lower-risk use of employee-focused IoT in seven vital ways:
Build a foundation of trust. Employee trust is an important enabler for far more than the Internet of Things, but research has shown it’s an essential factor in whether employees react with resentment or optimism about performance monitoring and other technology systems. Leaders can pursue development programs to close deficiencies in necessary trust-building skills.
Improve comfort, familiarity and proficiency with all types of technology, specifically for IoT devices. Explain what they are and how they are being used. This is not an area of strength for many leaders, but it’s a gap that must be closed to confidently allow IoT to be implemented.
Make sure IoT data are right and accurate. Leaders must understand what IoT data are actually being captured and ensure the right data are gathered. These data must provide accurate employee information, eliminate extraneous factors and avoid data flaws leading to misinterpretation of the information and false impressions about employees.
Know exactly what the IoT data will — and won’t — be used for. Is the data really going to help employees become better? Or is it a new way to catch them doing something wrong? When information tracked about employees is viewed as developmental, it is more likely to be seen as fair and to induce job satisfaction and commitment.
Plan to use data to give employees personalized feedback. This factor can’t be overstated and makes the biggest difference in how employees see the Internet of Things. Simply, how is the data helping employees learn and grow personally? If leaders can’t make a credible case for why and how, negative effects and rampant suspicion are nearly guaranteed.
Respond to employee concerns with empathy. Leaders skilled in listening and responding to employees with empathy, developed on their own or in partnership with learning, will be better prepared to quell concerns about the collection and use of data about employee activities.
Communicate the reasons and benefits of IoT from the employee’s perspective. Take these messaging steps long before the first device is strapped to an employee’s wrist or the first data point is gathered about their actions.
Companies plunging headlong into the IoT do so for many business reasons, yet the employee’s viewpoint is not always considered when plans are made; those who actually wear or are tracked by IoT devices can be an afterthought rather than a primary consideration. Strong and improved leader awareness, involvement and skill-building are vital to prevent employees seeing the Internet of Things’ big data as Big Brother.