

The Fitbit Flex wristband is one of the new devices that tracks how much or how little a person is moving. (Fitbit)

For many employees, holiday gifts from the boss mean tchotchkes like coffee mugs or calendars. Not at Ikea. One year, the Swedish retailer gave all of its U.S. employees a bicycle. Another year, it gave them a tablet computer.

And this year, after surveying workers about what they'd like to receive, the flat-pack furniture seller gave all 14,000 of its U.S. employees — from executives to part-time cashiers — an UP fitness wristband from Jawbone. "It's an investment in our co-workers' health and well-being," says Jacqueline DeChamps, the human resources manager for Ikea U.S.

Whether given as gifts by corporate Santa or as add-ons to employee benefit programs, more and more companies are spending money on wearable gadgets, which track data like your distance walked or hours slept that can be uploaded to an online system. At Ikea, the bands aren't tied to the company's wellness plan, but have already sparked informal contests and competitions among co-workers. "It's a happy byproduct of the gift," DeChamps says. "We're seeing that it's inspiring really healthy activities."

Other companies, however, are closely linking the activity trackers to their benefits and health plans, offering days off in exchange for averaging a certain number of steps daily, for example. Some, too, are providing employees with discounts on health insurance co-pays or deductibles in return for being more active.

Amy McDonough, who manages Fitbit's corporate wellness business, says she's noticed this shift in the last couple of years. Employers used to think about the gadgets simply as fun gifts, but now tend to tie them much more to benefits.

As more companies try to lower their health costs by encouraging workers to get fit, this type of incentive-based tracking of individual data is only expected to grow, despite questions from privacy advocates and potential concerns from wary workers about sharing that information with employers.

"This is still very much a new area," says Jonathan Collins, an analyst at ABI Research who has studied the corporate market for fitness trackers. "Each company decides to draw the line where it wants to — what its H.R. department will be comfortable managing and what end users will be willing to sign up for."

Currently, about six percent of consumers who own a wearable activity tracker got them from their employers, according to a survey by the consulting firm Endeavour Partners. Yet the potential for the market is huge: A 2013 study by ABI Research found that over the next five years, more than 13 million wearable devices with embedded wireless connectivity will be integrated into corporate wellness plans.

Naturally, such device makers are responding with more services geared to the business market. In February, Polar introduced a corporate platform for its Loop activity tracker. Last week, Jawbone announced Up for Groups, a new service aimed at businesses that will let them view aggregate data on employee habits as wells as nudge workers to get up and move when there's a lull in activity. Fitbit has had a corporate wellness business for several years, and says it currently works with 30 companies in the Fortune 500, including Time Warner, McKesson and Bank of America.

This growing demand from the corporate market partly reflects companies' desire to bring more accountability to programs that long relied on the honor system. Companies used pedometers, for instance, to get employees on their feet, but those typically required workers to self report data. H.R.-issued pedometers also weren't exactly trendy, nor were they as socially interactive as the new devices, which let users share their activity with colleagues or family members.

In essence, what the fitness bands provide, says Collins of ABI Research, "is a feedback loop to corporate wellness programs where there hasn't traditionally been one."

Another reason behind the push, says Andrew Rosenthal, who manages Jawbone's group wellness business, is that insurers have warmed up to the devices, providing rebates or incentives to companies that invest in them. "We've had employers come to us with a check in hand from their insurers," Rosenthal says.

Starting in 2013, BP began giving its American employees Fitbit gadgets that they could use to earn their way into a less expensive health-care plan. For instance, workers could earn 500 points for walking a million steps a year, another 250 points for walking two million steps, 500 points for getting a physical, or 125 points for attending a health-related class. Earning 1000 points then qualified them for a health-care plan that saved employees an average $1200 a year in lower co-pays and deductibles, says Karl Dalal, the company's director of health and wellness benefits. Some 16,500 of the company's 20,000 U.S. employees use the device.

There was some initial trepidation from employees about privacy issues and how the company was going to use the data. "Now everyone's over it," Dalal says. "I get no feedback from employees like that." BP, like most big companies, uses an outside vendor to manage the wellness program, so he says the company does not see any individual data on activity levels.

Still, some worry that these kinds of programs could have unintended consequences. The law requires that companies offer employees reasonable alternatives for any "health contingent" incentive, such as letting disabled workers earn discounts by taking a health screening rather than achieving a certain number of steps each year. Yet unlike other activities that employees can do privately in exchange for discounts, wearing the device and taking part in a fitness challenge is an inherently social activity. For employees unable to participate — or for those who think it's creepy to wear a wristband that shares data about their habits — there could be an implicit cost.

"If everyone on your floor has a Fitbit and you’re doing some different program, is there some kind of stigma attached?" says Pam Dixon, the executive director of the nonprofit organization World Privacy Forum. In the office, "social pressure is a force to be reckoned with."

Dixon and others also worry about the precedent that use of such devices could set. Companies may design these current programs correctly to protect against privacy concerns, and employees may not worry too much about revealing how far they've walked, but the gadgets could pave the way for sharing other kinds of data in the future.

"It's a really slippery slope," says Mark Rothstein, a professor at the University of Louisville and the founding director of its Institute for Bioethics, Health Policy and Law. "It's so tempting to go from steps to heart rate to blood pressure to sleep. Where are we going to be a year from now? Two years from now?"

Even if there are benefits to using the devices, Rothstein wonders: "Are the intangible costs in terms of privacy and employee morale worth it? I'm a public health person and I certainly want to encourage people to get healthy, but I don't think that's the role for employers."

Companies and device makers say the programs are voluntary, adhere to federal law, and let employees decide what data they want to share. Jawbone's Up for Groups program only shares information in the aggregate with employers; other makers say that when individual data is shared, workers give permission first and an outside administrator is typically involved to keep employers' eyes off the numbers.

Smaller employers, says Christine Evans, a spokesperson for Fitbit, tend to focus on team-based competitions that are simpler to administer on their own. Fitbit also only shares sleep data in the aggregate. "I think employers have been very clear that they do not want to collect data that employees aren’t comfortable providing," she says.

In an era of big data, escalating health-care costs and rapidly accelerating technology, only time will tell if such arrangements remain the norm. At the very least, employees should probably get used to an irony: The same companies keeping them at their desks so many hours are also increasingly interested in making them move around.

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