New report reveals impact of working from home on Australia's productivity
The verdict on hybrid work is in.
According to a new report by the Productivity Commission working from home has not contributed to the decline in Australia's productivity since the pandemic.
The report analysed the "peculiar pattern" in Australia's productivity bubble that emerged during the pandemic, where labour productivity hit a record high from January 2020 to March 2022 before declining and returning to pre-pandemic levels in June 2023.
The Commission analysed current literature on remote and hybrid work and said evidence on how working from home has impacted this bubble is still evolving.
"However, given most studies find hybrid work to be either neutral or positive for labour productivity, there is no evidence to suggest that the trend towards hybrid working has contributed to the productivity loss phase of the productivity bubble," the report stated.
According to the Commission, fully remote work during the pandemic was likely to be detrimental to productivity, as in-person interactions may be better for collaborative tasks and idea generation.
It added that in-person work will also be essential for the skill development of less experienced workers, who can gain knowledge from senior and junior workers through informal in-person interactions.
But at the same time, it noted that workers don't need to be in the office full-time to experience these benefits.
"As a result, hybrid work (working some days remotely and some days in the office) tends to be beneficial to productivity, or at least, is not detrimental to productivity," it said.
Citing other literature, the commission said hybrid work also allows for
It added that there are indirect effects of working from home on labour productivity, such as expanding the geographical talent pool of organisations.
"Remote, or hybrid, work may also provide opportunities for workers to participate in the workforce when they would otherwise be unable to do so if they were required to be in the workplace," it added.
The findings come amid reports indicating that hybrid work arrangement is entering a "stabilisation phase" in Australian workplaces. A previous poll from the Australian HR Institute said 44% of employers require staff to be onsite three to five days a week.
But there are also employers introducing office-return mandates, such as Amazon and Tabcorp.
A poll from Robert Half earlier this year also revealed that 39% of employers are planning to implement a full office return this year. In the same report, 84% of employers also admitted that their work arrangements are also influenced by other organisations' office-return policies.
