Working from home is here to stay long after the COVID-19 pandemic, according to the federal government’s key economic adviser, with a new report suggesting some people might even take a pay cut to remain in their home office.
- The percentage of Australians working from home has jumped from 8 per cent to 40 per cent in the past two years
- Working from home is expected to continue at high levels after the pandemic ends
- In future, employers and workers are expected to negotiate mutually beneficial arrangements
A major review by the Productivity Commission found the percentage of Australians working from home had jumped from 8 per cent to about 40 per cent over the past two years, staying high even when previous lockdowns have ended.
Commission chair Michael Brennan told AM the swift change in the way we worked would remain a feature of our working life, even after the COVID-19 crisis was over.
“I think it’s likely that working from home will continue at higher levels than we saw before the pandemic, maybe not so much at the levels we’ve seen at the height of lockdown, but somewhere in between,” he said.
The way we work will also be somewhere in between, with the report finding while most workers enjoy their home office, they do not want to spend their entire time there because there are reduced opportunities for collaboration and potential long-term career consequences.
The Productivity Commission expects workers and firms will negotiate mutually beneficial working-from-home arrangements, with many employers likely to allow workers to split their time between the office and home under a so-called hybrid model.
The report states the change to the way we work has been unprecedented in terms of size and speed, and governments should “aim to smooth, rather than impede, the transition to different models of work”.
What are benefits of working from home?
The report also found anecdotal evidence some people might even take a pay cut to negotiate life in the home office or around the kitchen table, with numerous advantages to at-home work.
The main advantage, according to people surveyed, was saving time and money on their daily commute.
In 2019, full-time workers in Australia’s major cities spent an average of 67 minutes each day commuting, and for those taking public transport, the average time value and transport cost totalled $57 a day.
“The commute for many people is quite significant,” Mr Brennan said.
“It’s a meaningful cost in terms of the time spent commuting to work … it’s large enough that it might make a difference to the job that someone might choose.”
Other reasons why workers preferred to be at home included the ability to have more time and control over their day, to sleep, exercise or cook nutritious food.
But there are also downsides.
Working from home can worsen physical and mental health due to less incidental exercise, increased isolation and having no boundaries between home and work life.
That has led some unions to call for a “right to disconnect”, arguing there need to be legal and reasonable limits on working time, including by allowing people to log off from telephone calls, work emails and other contact.
As a result, the Productivity Commission said it was appropriate for governments to monitor the labour market and regulatory settings to make sure they were fair and continued to protect workers.
Is it for everyone?
The report also noted that working from home was not for everyone, finding just 35 per cent of workers had jobs that allowed it, with the potential to do so higher among full-time and female workers, as well as those with higher incomes.
For example, just 1 per cent of labourers can work from home because of the nature of their work.
And not every business is a fan of working from home, either.
The report quotes CEO of JP Morgan Chase, Jamie Dimon, who said it “doesn’t work for people who want to hustle, doesn’t work for culture, doesn’t work for idea generation”.
Are we as effective outside office?
Evidence is mixed about whether we are more productive working from home, according to the report.
On one hand, some people might be able to do less work at home when they are not monitored by eagle-eyed managers.
On the other, the report notes working from home allows people to work when it best suits them, like early in the morning if that is when they are most alert or late at night after their children have gone to bed.
The report also notes employees and their bosses have slightly different views about productivity when working from home, with more employees reporting they are a little or a lot more productive at home than their employers.
Mr Brennan said overall, productivity was likely to remain consistent even with workers at home.
“Some people are more productive working from home, some people are less productive working from home,” he said.
“But I think the main thing is that, at an economy-wide level, I think there are good grounds for optimism that productivity is unlikely to fall overall.
“And it could even rise, because if it’s unlikely that most of the people who are now working from home are those who do it poorly, it’s more likely that they’re going to be the sorts of people who do it pretty well.”