Employee monitoring offers valuable insights into not just when employees work, but how they work — helping drive productivity and engagement.
While traditional employee monitoring has historically sparked concern due to its association with surveillance and micromanagement, modern approaches focus on transparency and data to support smarter decisions.
In this article, we’ll cover the basics of employee monitoring and how to use it to build a more productive, transparent workplace.
Choose where to start:
- What is employee monitoring?
- Types of employee monitoring
- Advantages of employee monitoring
- Disadvantages of employee monitoring and how to address them
- Legal considerations for employee monitoring
- Is employee monitoring software right for you?
- How to pick the best employee monitoring software
- How long before I can benefit from the employee monitoring software?
- What are the limitations of the employee monitoring software?
- Implementation tips for employee monitoring software
What is employee monitoring?
Employee monitoring refers to the tracking of employee activity data to monitor productivity, prevent data breaches, boost employee engagement and optimize inefficient workflows. It includes monitoring employees’ internet activity, application usage, time on tasks and even working locations to understand how employees work.
Analyzing employee monitoring data empowers companies to uncover trends, patterns and correlations across teams and departments. These insights help leaders identify opportunities for improvement, remove roadblocks and foster a more efficient, engaged workforce.
Types of employee monitoring
Historic methods of employee monitoring
Just ten years ago, organizations conducted most employee monitoring locally in the office. But now, with remote and hybrid work, leaders must rethink how and why they use employee monitoring. We’ll briefly cover some of the historical types of employee monitoring and then jump into a more modern approach.
Internet and email
Internet and email monitoring focuses on tracking how employees interact with browsers and email platforms during work hours. Internet monitoring reveals which websites employees visit and how much time they spend on them, enabling organizations to set appropriate web policies. Email monitoring provides insight into the volume, timing and recipients of messages to ensure teams use email effectively for work-related tasks.
Computer activities
Computer activity monitoring focuses on how employees use desktop software throughout the workday. It captures data on which applications they use, for how long, and when computers sit idle. Detailed reports computer monitoring reports help organizations assess productivity and identify opportunities to streamline tool usage.
Keylogging
Keylogging, or keystroke logging, is a process that records the keys a user types on the keyboard in order. These programs can also capture screenshots when triggered by predefined keywords.
Keylogging comes with some major drawbacks, with some viewing it as violating workplace privacy. It’s also notorious for being used with malicious intent.
That’s why ActivTrak and modern employee monitoring tools do not contain keylogging, as it raises employee privacy concerns. Instead, the modern approach to employee monitoring places value on open communication and a transparent workforce productivity strategy, where keylogging offers no real value.
Telephone
You know that message you hear when you call customer support for a router that’s giving you trouble? “This call may be recorded for quality and training purposes.” It means you’re an active party in employee telephone monitoring. Companies use this approach to take control of quality assurance and confirm their employees provide outstanding customer service.
Location tracking
Location tracking allows organizations to monitor where work is performed, especially in remote or field-based roles. For example, location data confirms when and where remote employees log in or use company devices. This helps validate time records, ensure policy compliance and support operational visibility. It’s also commonly used in industries like delivery or logistics to optimize routes, verify service locations and enhance asset security.
Advantages of employee monitoring
Employee monitoring helps organizations track how work is done across teams and systems. By analyzing this data, businesses identify ways to increase productivity, improve employee engagement and reduce security risks.
Increase productivity
American businesses lose $650 billion per year from unproductive employees.
Employee monitoring helps managers understand when employees are productive or not, and why. On an individual level, it makes it easy to see when employees are struggling and need additional training or more regular check-ins. At the team and organizational levels, monitoring employees helps leaders spot larger barriers to productivity such as inefficient processes and resource constraints.
Using these insights allows managers to implement larger changes that enhance productivity throughout the company.
Boost engagement, minimize disengagement
It’s widely known that just 21% of employees are fully engaged at work. Now more than ever, companies need tools to help determine who is disengaged, the reason for the disengagement, how much it’s costing the company and how to help.
Why? Because disengaged workers aren’t just unhappy and underperforming. Their disengagement is often infectious, undermining what their engaged coworkers would otherwise accomplish. And sadly, disengaged workers typically don’t care about the company’s goals or success. They only show up to get a paycheck.
Employee monitoring helps you identify which team members are disengaged or headed that way. For instance, data shows how much time employees spend in unproductive applications. Take that information and display it in a graph over time and you’ll see whose productivity has increased, decreased, or remained the same.These insights allow you to meet with the team member to find out what’s going on and how you can help.
Increase revenue
Increasing productivity and boosting engagement helps companies improve the bottom line with existing resources, reducing the need to grow through expanding headcount.
Optimizing processes to remove inefficiencies allows employees to work smarter instead of harder, leading to greater output. The right employee monitoring solutions also uncover hidden inefficiencies, empowering you to improve workforce utilization and lower operational costs.
Improve security and safety
Data breaches and cybersecurity remain a top concern, with hackers inventing new methods for accessing data every day. From human error to internal threats, risks lurk in every corner of your business — no matter the size.
Employee monitoring provides supervisors a clear view of what people are doing and when. Some tools allow managers to set up alarms, notifying them of risky behaviors for real-time response to help prevent actual data breach. And in the event of any breaches or legal issues, data logs act as your company’s “black box.” Your task of discovering the “who, what, when and where” of the incident becomes a little bit easier.
Disadvantages of employee monitoring and how to address them
Amidst the many benefits of employee monitoring, one common issue persists — perception. The goal of analyzing employee activity is to create a company culture where everyone performs their best and works cohesively as a team — not to spy on them. But your team may not see it that way at first, creating a few disadvantages.
Privacy
Activity monitoring comes with the concern of privacy. People use work computers for personal reasons, and they want to keep their activity private. Also, people just don’t like the idea of someone “watching their every move.” It’s creepy.
Reassure your employees that their privacy is crucial. You aren’t watching them; you’re dissecting data. You’re not interested in personal information like passwords, driver’s license, passports and social security numbers.
Trust
If employees think you’re spying, feelings of anger and dissatisfaction may turn into disengagement. That’s pretty counterintuitive to your goals.
Gain employees’ support by demonstrating you’re monitoring for the right reasons. Don’t track just to track, and don’t use invasive strategies. The best practice is to be transparent, so stress to your team that your monitoring system serves only used as an analytical tool.
Increased stress
Knowing their activities are tracked often causes employees to instinctively work harder, take fewer breaks and worry about productivity. All of this increases stress levels for your team, leading to both a drop in morale and employee turnover – the exact opposite of what you’re trying to accomplish!
Explain the types of data you’re gathering and why to help alleviate these worries. Follow through with your plans to use the software only for purposes related to analytics.
Legal concerns
There’s a lot of murkiness around the legality of employee monitoring. One of the reasons is that there are so many different laws on what is and is not allowed. We’ll get into this more in the section below, but for now, know that the legality of employee monitoring is completely dependent on where you are located.
That doesn’t mean this type of data gathering is out of the question, though. There are ways to analyze day-to-day activities in accordance with your local laws.
Legal considerations for employee monitoring
It’s time to address the elephant in the room. Several misconceptions about the legality of employee monitoring persist, making it important to understand the facts before jumping to a decision.
Is employee monitoring legal?
In short, yes. Various workplace laws allow companies to monitor employees. In the U.S., employers can generally track emails, app usage and internet activity without requiring employee consent. However, some states like Connecticut, Delaware and California require you to notify employees before monitoring begins. Not following these rules leads to legal issues or damages trust with your team.
Outside the U.S., especially in the European Union, privacy laws are stricter. Employers must clearly explain what data they’re collecting, why they’re collecting it and how it will be used. In most cases, they also need employee consent.
Regardless of location, you should be transparent and let employees know what’s being monitored and why.
Is employee monitoring software right for you?
Before we get into choosing the best employee monitoring software for your team, you need to be absolutely certain it’s right for your organization. Some companies use this type of software for all the wrong reasons and completely miss the point. It’s pretty easy to determine if you should take the next step, though.
Just consider the following:
What are my goals?
Think about the goals for your business. Write them down with space for notes. Possibilities include:
- Cut Expenses
- Improve Customer Service
- Secure Data Better
- Employee Retention
- Become More Efficient
- Implement More Legal Protection
Will employee monitoring help me reach these goals?
Take a look at your goals, then write down how employee monitoring helps. For example:
- Cut Expenses: Learn which software isn’t used and get rid of it.
- Improve Customer Service – Look at the workflow for reps and analyze its efficiency. Speed up response times.
- Secure Data Better: Use alarms to receive alerts to data breaches in progress. Redact sensitive info with DLP.
- Employee Retention: Use productivity reports to see which employees are becoming more and more disengaged and find out why. Show employees you want to keep them on the team and ask how you can help them feel more valued.
- Become More Efficient: Take a look at your business process. Remove employees from projects where they aren’t needed and assign them to new projects.
- Implement More Legal Protection: With a virtual black box of all computer activity, you’ll have a trail of data to investigate and to provide in a court setting.
How to pick the best employee monitoring software
The market is filled with different types of employee monitoring software, making for an overwhelming decision. Let’s make it a little easier.
Develop an employee monitoring checklist
Before spending a lot of time shopping around, start by developing a checklist of features your company needs.
You may or may not need features like:
- Website blocking
- Real-time monitoring
- Data leak prevention
- Time spent on activities
- Financial loss analysis
- Schedule adherence
- Ability to categorize activities as productive or unproductive
Another major consideration? How the system operates. Most employee monitoring software falls into two categories: User Input and Always On/Scheduled. Some solutions put employees in control of tracking each task. They use an application to record when they start, stop or pause the project. All data collecting occurs only during this period.
Others gather data as long as the computer is in use, allowing employees the freedom to work without having to think about logging. Most times, there’s an option for an administrator to schedule this recording during business hours. The upside to this type of tracking is that it provides an unbiased data set. Without user input, you have facts that can’t be manipulated.
Once you narrow down which features are most important to you, start comparing which service offers those features and best meets your needs.
Now it’s time to REALLY trim the fat. These two informative questions are great for both small and enterprise businesses to ask when picking out the right employee monitoring software.
How long before I can benefit from the employee monitoring software?
The time it takes to benefit from employee monitoring software depends on setup, customization and user readiness.
Installation time
Consider the length of time from installation to receiving reliable data. How long does installation take across your network? Do results start flowing into the analytic dashboard once installed, or is there a delay?
Customization
While default settings provide general insights, customization helps tailor the solution for your specific goals. Find out how long it will take to implement custom tracking and build personalized dashboards.
Learning curve
Like most new tools, there’s going to be a bit of a learning curve for most users at the beginning. Some training may be necessary on all of the features available to you. To realize the full potential of your software, it may take some time or you may even need to hire an expert to interpret the data.
What are the limitations of the employee monitoring software?
For any solution you’re considering, make sure to dig into its limitations to uncover potential deal breakers. This means thinking about how your team and business will evolve, as you’ll want a solution that works with your current and future needs.
Scalability
Will the software grow with your business? It needs to handle high volumes, surges in activities and an increasing number of seats or users. It should also process quickly and store massive amounts of data reliably, regardless of the number of members on your team. You don’t want your employee monitoring software to fail if you’re an eCommerce company needing to measure productivity on Cyber Monday!
Size, speed and storage
Learn how the software processes data, which servers it uses, where data is stored, how much storage is available and if there are any limitations on the volume of raw data that can be processed. If you don’t quite know the ins and outs of data processing, talk to a representative of the company. Explain your needs and see if their system can hold up.
Customization
Sure, it may have all the features on your checklist, but can you change, modify, delete or add to them? Some businesses prefer to mark social media sites as unproductive. But if your company relies heavily on Facebook, Twitter and Instagram for your marketing, you might need to classify those sites as productive so you can factor that data in when analyzing performance. Every company is different. One size does not fit all. Customization is key to making the software work for you.
Integrations
Employee monitoring software has been known for complications with some anti-virus software. Prevent headaches by confirming the tool will integrate with your existing tech stack.
Implementation tips for employee monitoring software
Did you decide on the best employee monitoring software for your team? Congratulations! You’ve got some real potential to get your business operating in a way that will reach the goals you set. But you’re not ready to go just yet. There are a few more points we need to hit, which should all be part of your action plan.
Involve your team early
It may be legal to gather data on employees at work in the US (minus a few states) without their knowledge, but just because you can doesn’t mean you should. In fact, we suggest calling a meeting to tell your employees you’re implementing employee monitoring software. Hit on these points:
- What is it?
- How does it work?
- How will you protect privacy?
- Why is it needed?
- What are the company benefits?
- How do employees benefit?
For example, many employees love to hear how the software benefits them directly. Tell them how:
- Everyone is measured equally with the same data. Since the data doesn’t lie, performance is supported by facts, not favoritism.
- Workloads will be more balanced. Through the process of analyzing data, workloads will be shared more equally to find the optimum way to operate.
- Your hard work will not go unnoticed. There are plenty of opportunities to be recognized for your efforts!
- The reports are a tool for coaching and training. The areas of growth that are necessary for career development become clear.
After you’ve gone through those points, open time for questions. See what everyone thinks. Expect people to worry about privacy or stress over being watched at first. Having those feelings is natural. If you’ve done a good job of explaining your purpose and the benefits of team behavior analytics, it shouldn’t be too hard to put everyone at ease.
Craft an official policy
If you involve your team at the implementation stage, get additional buy-in by working with everyone to create an employee monitoring policy. Ask for input, but make sure to include:
- The purpose of monitoring
- What data is collected and during which hours
- How will the information be used
- Contact information for questions or concerns
- A place for a signature to show the employees understand and accept the terms
Use plain language, avoid legal jargon and have employees acknowledge the policy to promote transparency.
Be a reasonable admin
Be thoughtful when choosing which websites to block, and block in moderation. YouTube may be the first site you think to restrict, but think about it. YouTube has plenty of useful tutorials that could develop skills for your team. Block and filter websites justly, but don’t overdo it. And, never use your employee monitoring tool to punish employees.
Be flexible with expectations
Don’t expect each person to work eight hours straight. People need breaks. The key to ethical employee monitoring is remembering people are people. Emphasize you understand employees need breaks, and it’s totally fine to them as needed. Set boundaries, but allow flexibility for some personal use. Striking the right work-life balance is essential to your team’s happiness.
Don’t be creepy
Activity tracking is not a tool for spying, so don’t do it! Don’t watch a person’s every action. If you can name Stephanie’s Facebook friends because you’ve been studying her screenshots, you’re going too far. Again, you have to understand this tool is strictly for auditing productivity, and to improve company performance.
Customize the software
With the amount of customization available in some software, you’ve got the flexibility to tailor your tools to your needs. Remember one size does not fit all. The same applications and tasks one company views as unproductive may be a necessity for getting work done at your organization. Customize how the software responds to the use of those applications. Set monitoring schedules that include lunch breaks and don’t track after business hours. Take a look at everything you can do and make your software work best for your team.
Encourage feedback
Adopting employee monitoring software is stressful for employees at first. Try to see it from their point of view and make yourself ready and willing to hear their concerns. Don’t dismiss anyone’s thoughts as paranoia. Seek feedback about ways to improve the use of the software and the policies around it.
Try ActivTrak’s employee monitoring software
Employee monitoring is most effective when it’s implemented with clear goals, transparency and a focus on improvement — not control. The right approach drives productivity, boosts engagement and improves security.
If you’re interested in employee monitoring, request a demo of ActivTrak’s employee monitoring software to see why it’s trusted by more than 9,500+ global brands.