Property Australia

Hybrid work perspectives

Karen Jamal Karen Jamal September 21, 2021

The central workplace "will remain the dominant model for the foreseeable future," says the Productivity Commission in a new report.

 

  Three key takeaways:

  • The Productivity Commission’s Working from home research paper suggests the shift to hybrid work should be kept “in perspective”.
  • The Covid-19 pandemic has forced around 40% of workers to experiment with working from home, but if half of those who can work remotely do so two days each week, overall hours worked remotely would increase from 2% pre-pandemic to just under 7%.
  • Remote work has delivered a “CBD-centric shock” but the Productivity Commission notes that the “death of the CBD has been greatly exaggerated”.

 

Around three-quarters of workers surveyed by the Productivity Commission believe they are at least as productive working from home as they are from the office. Views from employers are broadly similar, “if slightly less positive,” the report notes.

The primary benefit for workers is the avoided commute, which prior to the pandemic absorbed 67 minutes of the average full-time worker’s day and cost up to $57 in foregone earnings.

But few workers prefer fully remote work, and the Productivity Commission points out several actual or perceived costs of working from home: fewer opportunities for collaboration and networking; reduced face-to-face interaction with managers; and consequences for long-term career prospects.

Firms are already counting the costs too, the report finds. While this hybrid model of remote and in-office work may be “intuitively appealing,” in practice it “may be more difficult to execute well, due to increased management and coordination costs”.

Firms may be able to tap into a larger pool of labour, but this can also add more “complexity” to workplace health and safety risks, as employers have less visibility and control of the working environment.

CBDs will remain “attractive hubs of economic activity,” the Productivity Commission confirms. While companies will experiment with hybrid models, they will maintain their CBD offices due to their central location, accessibility and because “the benefits of close proximity – sharing, matching and learning – remain strongest in high density areas”.

Property Council chief executive, Ken Morrison, welcomes the report’s findings.

“The Productivity Commission report notes that CBDs will continue to be the natural home of the knowledge worker due the dividends of in-office working for both employees and their companies.

“Building culture, finding those serendipitous business opportunities, and achieving high level collaboration and problem solving are all much more effective in person.

“Most firms will want to offer greater flexibility, but their commercial success will still depend on face-to-face interactions to drive tangible commercial outcomes as we move into the new normal.”

Property Council data indicates that CBD workers were slow to return to offices once restrictions were lifted in 2020. “As the current restrictions are progressively lifted, the challenge for policymakers will be to ensure the right settings are in place to encourage workers back to their offices to reignite those productivity benefits,” Morrison concludes.

Download the Productivity Commission’s Working from home research paper.

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