The report, by thinktank Institute for Public Policy Research (IPPR), found that young people are most at risk as people aged 16 to 29 are most likely to be in low-skilled or low-autonomy jobs.
In the private sector, this also means women are at higher risk of worker surveillance, while among ethnic groups, black people are at the greatest risk.
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According to the Trades Union Congress (TUC), the percentage of workers reporting workplace surveillance and monitoring increased from 53% in 2020 to 60% in 2021, likely due to the pandemic.
Employee monitoring software demand was 57% higher on average globally in 2022 than in 2019.
However, IPPR argues regulation of worker surveillance has not kept up, creating negative consequences for both employers and employees.
The report found employers were using monitoring software as a form of retribution, intimidation and discipline.
Employees reported feeling paranoid to leave their workspace, even to go to the toilet.
TUC secretary Paul Nowak said worker surveillance risked "spiralling out of control".
Speaking to HR magazine, he said: “Nobody should have their livelihood taken away by technology. Workers and unions must be properly consulted and be protected from punitive ways of working.
“But the government is providing only vague and flimsy guidance to regulators.”
Zofia Bajorek, senior research fellow at Institute for Employment Studies (IES), said surveillance is often introduced to increase productivity but risks being counterproductive.
Speaking to HR magazine, she said: “Organisations have tended to give a variety of reasons for why surveillance techniques were implemented, often centring around monitoring workloads, productivity and even wellbeing, although on this one, a conversation is always preferable to monitoring.
"Introducing employee monitoring may signal a lack of trust in your employees that can negatively affect performance, morale and productivity, lead to concerns about what the data being monitored is used from, and can make employees feel their privacy has been devalued.”
Barclays bank came under scrutiny in 2020 when a whistleblower reported their software was being used to spy on employees.
Software provider Sapience said its system tracks the computer activity of workers, including times when an employee goes offline.
Barclays argued that the software was used for productivity and wellbeing, for example if an employee was working too much.
Initially the results of the monitoring were supplied to Barclays team managers in a collective and anonymised form.
Yet shortly before the whistleblower chose to break cover, Barclays allegedly allowed managers to see the data relating to individuals.
After coming under media scrutiny, the bank withdrew the programme.
Bajorek said employers should communicate with staff and union representatives if they are implementing surveillance technology.
She added: “Employees will need to be assured what the data being collected will be used for, for example performance management or disciplinaries, and who will have access to the data.”
“However, if organisations had an open safety culture, where discussions about work, performance and wellbeing were commonplace, and there was two-way trust between employers and employees then it could be questioned whether such technology is needed in the first place.”