A new Productivity Commission report says work-from-home levels during COVID didn’t adversely impact labour productivity. Photo: Image-Source.
The COVID-19 pandemic has shown that working from home can be beneficial to both employees and employers, according to a new report from the Productivity Commission.
Productivity before and after COVID-19 measured the impacts on labour productivity of the pandemic and its lasting effects.
It says working from home actually boosted productivity as employees had fewer workplace distractions and took less sick leave.
“Allowing for remote work reduces geographical barriers to employment and expands the geographical pool of potential employees and employers, which could improve job fit and thus productivity,” the report states.
“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.
“Evidence shows working from home improves labour force participation for mothers, workers with a disability, and other workers who might find it harder to come into the office five days a week.
“And while the implications of these shifts in workforce participation on labour productivity are uncertain, there are other benefits such as increasing gross domestic product (GDP) and reducing economic disadvantage and inequality …
“The evidence on working from home 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 study also shows that while personal contact with colleagues is beneficial to a worker, a hybrid arrangement can meet those needs while also boosting productivity.
“Workers do not need to be in the office full-time to experience the benefits of in-person interactions,” it states.
“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.
“Allowing workers to work from home some days can improve worker satisfaction, and allows people to benefit by avoiding the commute to work, meaning they have additional time for other purposes.
“It is estimated that workers would be willing to give up around seven to eight per cent of their wages to work from home.
“Remote work also reduces breaks and sick days, and results in less distractions, all of which are typically found to be beneficial for productivity.
“Further … working from home for two days a week did not affect employee performance, but did improve employee retention … hybrid work is associated with higher quantity and novelty of output compared to workers who are full time in the office or full time working remotely.”
The report details how the spread of the coronavirus pandemic led to governments recommending and often mandating that people work from home where possible.
It states that working from home was a fundamental change to how people do their jobs, and it was likely to have implications for labour productivity.
Prior to the pandemic, 11 per cent of working-age Australian adults reported that they had worked from home at least once a week in the last four weeks, and 12 per cent reported that they worked from home on all or most days of the week.
In September 2020, when several major cities were under lockdown due to the pandemic, the proportion of working adults that had worked from home at least once a week in the last four weeks decreased to 9 per cent, and the proportion who worked from home on all or most days a week in the last four weeks increased to 31 per cent.
“By April 2022 after most lockdowns had been removed, both of these rates changed to 18 per cent and 27 per cent respectively, indicating increased popularity of more hybrid work arrangement,” it says.
“In August 2024, 36 per cent of employed people reported that they usually worked from home, indicating a sustained shift in work practices.”
The Commission’s deputy chair, Alex Robson, said the COVID-19 pandemic led to a “productivity bubble” in which measured labour productivity rose to a record high between January 2020 and March 2022 before returning to pre-pandemic levels in June 2023.
“The COVID-19 pandemic was a rollercoaster for productivity, but we are now back to the stagnant status quo,” Dr Robson said.
Original Article published by Chris Johnson on Region Canberra.
