This edited story is from Matt Wade, senior economics writer at the Sydney Morning Herald. Employers are on the wrong side of history when it comes to working from home.
Bosses have made headlines during the past few months, ordering employees back to the office five days a week.
“All this work-from-home nonsense is completely changing,” David Harrison, chief of commercial property giant Charter Hall, told a recent Australian Financial Review property summit.
But there’s a problem for those who want to drag our workplaces back in time: hybrid work will deliver economic benefits Australia can’t afford to squander.
A recent IMF blog titled Remote Work’s Growth Gift spelt out how work from home can boost productivity and power economic growth. The author, Stanford University economics professor Nicholas Bloom, argued that firms, employees and society in general have all reaped huge dividends from remote work.
“In my lifetime as an economist, I have never seen a change that is so broadly beneficial,” he wrote.
Jobs that can be done remotely – around a third of positions in Australia – have a unique and valuable attribute: flexibility.
Among the biggest beneficiaries are those who care for children or the elderly, those with a disability, and older people who would like employment.
Research by the Committee for the Economic Development of Australia think tank shows that carers, women with children, people with a health condition, and those with a disability, “have significantly increased their workforce participation in occupations that have made large transitions to remote work since the pandemic”.
Two-thirds of Australians live in sprawling capital cities, where high house prices have forced families to locate a long distance from major job hubs. The ability to work from home, even a few days a week, has been an employment game-changer in those areas, especially for women with children.
The long commute to a distant office is not the dealbreaker it once was. For some women with caring responsibilities, remote work has allowed them to take on a higher paid, more productive job that better matches their training.
Lifting workforce participation will become increasingly important as our population ages and the pressures that flow from a shrinking pool of working-age people intensify. The flexibility offered by remote work will be a crucial tool to help deal with that challenge.
Working from home also means fewer commuters on our overstretched road and rail systems, which in turn limits carbon emissions.
A little over one-third of Australian employees, including 60 per cent of managers and professionals, work from home regularly, according to the latest figures from the Australian Bureau of Statistics. That’s up from around 5 per cent before the pandemic. The Productivity Commission estimates about 35 per cent of Australian jobs can be done from home.
Hybrid work models, in which employees spend between two and four days a week in the office, have become the norm for workers with a job that can be done remotely.
Another study from Stanford University, published in June, compared the performance of hybrid workers with those full time in the office over two years.
A randomly selected group of 1600 workers from the travel agency Trip.com was divided in two, with half working full-time in the office and the other half working three days a week in the office and two days remotely.
There were no differences between the two groups in productivity, performance review grade, promotion, learning or innovation. But the hybrid workers had higher levels of job satisfaction, and their attrition rate was 35 per cent lower (this was most noticeable among female employees).