Working from home is no passing fad

Many large employers have imposed return-to-office policies, but most fall short of a full-time mandate. Woolworths, the Commonwealth Bank and the NSW government all expect non-frontline staff to be in the office for two or three days. Only a few major companies, such as Amazon and Tabcorp, have insisted on a return to full-time office attendance for all staff.

After peaking during the pandemic, the share of people working remotely has stabilised over the past couple of years at about 35 to 40 per cent, up from about 20 per cent before COVID. Train patronage is plateauing at about 80 per cent of pre-pandemic levels in Sydney and Melbourne, another indication that hybrid working patterns have stabilised.

Of course, not everyone can work remotely. Working from home is much more common among high-earning managers and professionals than people in other occupations. But the share of people on low incomes working from home is also higher than before the pandemic. And even in occupations where in-person work is the core part of the job, some work is now being done remotely, for example, some medical consultations.

Several factors explain why hybrid working is likely to persist.

Younger firms and new industries and occupations are more likely to embrace hybrid work. As these firms and industries grow, this will offset the legacy companies that are demanding a return to the office full-time.

Employees value hybrid working arrangements, with studies showing that workers are willing to forgo 5 to 10 per cent of their salary to work remotely at least some of the time. Hybrid work increases happiness. Workers report better work-life balance, using some of the saved commuting time for leisure and caregiving. Reflecting the importance of working arrangements for many job hunters, job search platforms typically include a “remote work” or “hybrid” search filter.

Companies that offer hybrid-working options have lower quit rates, reflecting higher job satisfaction, and can save money on wages and office space.

Changes to workplace relations laws may also reinforce the shift to hybrid working arrangements. The Fair Work Commission is developing working-from-home conditions in a case about the Clerks Award, which could set a precedent for other awards and agreements.

Hybrid work is more than just a luxury for the professional class – it delivers large social benefits through happier workers and higher workforce participation.

Hybrid working has enabled higher workforce participation among historically under-represented groups. Women’s workforce participation has risen, and more women are working full-time, partly due to the flexibility working from home offers in balancing work and family responsibilities.

Workforce participation has also risen among older Australians, people with disabilities, and carers because working from home can reduce barriers to employment. Hybrid working may have also contributed to the gender pay gap shrinking slightly because women can now work in better-paying roles that previously required full-time office attendance.

And while sceptics argue that working from home reduces productivity, the evidence suggests hybrid working models do not weigh on productivity (although full-time remote work can reduce productivity).

Well-structured hybrid working models mean workers get the benefits of face-to-face interactions and the ability to do “deep work” at home where there are fewer distractions. Firms can also gain access to a broader talent pool, meaning they can hire the most suitable and most productive employees. Hybrid working can lower turnover, which reduces hiring and retraining costs and reduces office costs. Smaller, more innovative firms are more likely to use hybrid-working models. Remote working can also boost output, as workers devote some of their time savings from less commuting to working longer hours.

Technological innovations, such as enhanced video conferencing that uses AI, augmented reality meetings, and faster internet, are also making remote working better and more productive.

Hybrid work isn’t a passing fad – it’s a fundamental shift in how Australians work. Employers that resist this change face higher costs and risk losing talent to more flexible competitors. The real challenge for employers isn’t how to force all workers back to the office full-time but designing hybrid models that boost productivity and employee well-being.

Don’t believe the headlines: working from home isn’t dead.