This study presents an innovative framework for enhancing labour productivity through the real-time monitoring of physiological parameters, leveraging IoT-enabled wearable technology. In the construction industry, productivity optimization remains critical, yet conventional approaches often fail to adequately address worker health and performance. This study introduces an advanced system that integrates sensors into a safety jacket to continuously track vital metrics, including pulse, body heat, blood oxygen saturation (SpO2), stress and steps taken. The system was developed using an Arduino ESP32 microcontroller, various physiological sensors, and a cloud-based interface for real-time data visualization and analysis. Firebase was utilized to create an intuitive platform for supervisors to monitor health indicators and promptly address issues such as fatigue or stress, thereby improving workplace safety and efficiency. The analysis revealed significant correlations between workers’ physiological states and their productivity (correlations (r = 0.86) between workers’ physiological states and their productivity), underscoring the utility of such a system in optimizing labour management. By implementing this system, the study establishes a robust and scalable framework for real-time IoT-enabled monitoring of worker productivity. The sensor data was cross-validated against certified medical equipment, showing deviations within acceptable error margins (±5% HR, ±3% SpO2, ±3% temperature). While tailored for the construction sector, the approach has the potential to be adapted across various industries dependent on manual labour. This work demonstrates how IoT technologies can transform workforce management, paving the way for safer and more efficient operational environments.