The increase of people working from home in a short period of time, as a result of the coronavirus pandemic in early 2020, has raised questions about workers productivity, work-life balance, and the time and cost of commuting. Measures to prevent the spread of COVID-19 saw 46% of New South Wales workers work from home by May 2020, up from 8% in 2016.
With better technology services and hardware, not only available but accessible to many workers, more New South Wales workers are equipped to work from home if they have an internet connection. The New South Wales Innovation and Productivity Council has released the NSW Remote Working report in an attempt to understand the effects on business of working from home. The council interviewed 1,500 New South Wales workers during August and September 2020.
Working onsite has long been favoured by businesses
The report found that many Australians have used telecommunications technology every day at work, but until recently most had to travel to the workplace to access these technologies. This has maintained concentration in some areas such as the Sydney central business district (CBD), which, according to the report, are tried and tested areas for collaboration and innovation. “Businesses and institutions that colocate in clusters or innovation precincts can gain real economic opportunities from collaborating and sharing knowledge and resources in cost-effective ways,” stated the report, citing 2018 data.
Although remote-work technology has long been available, it took the COVID-19 pandemic to accelerate and accept working from home as an option. Before 2020, New South Wales was using less than half of its potential to work remotely. The report estimated that while 44% of all work tasks in the NSW economy can be done remotely, only 18% were done remotely in 2019.
Knowledge-intensive work, typically performed at a desk with a computer, accounts for approximately two-fifths of all employment in the state. The study compared the total proportion of tasks in knowledge-intensive industries that can be done remotely with the 2016 census, which confirmed the divide between the level of remote work before the pandemic and the underlying potential.
“In knowledge-intensive industries, 77% of all tasks could be done remotely on average, yet only 8% of workers worked from home according to the 2016 census. Population-serving and producing occupations show a similar divide. Given Australia’s technological parity with other advanced economies, our uptake of remote work has probably been held back by institutional barriers,” the report said.
The benefits of remote work
The report estimated that if workers were to work remotely as much as they prefer after the pandemic, overall labour productivity in New South Wales would rise by 1.6%. That extra productivity may be helpful after the pandemic. The report said the pandemic caused a significant drop in the demand for many goods and services, creating unemployment and reducing economic output. As a result, “productivity will fall as firms will be reluctant to let go of skilled labour” even as demand is lessened, so businesses will need to catch up economically.
By removing the need to prepare for work and commute, NSW remote workers gain an average of 77 minutes per day. Working remotely two days a week saves the average worker the equivalent of 3.3 weeks’ leave a year, and $860 a year in travel costs.
On days of remote work, NSW workers spend 49 minutes more on personal and family needs, 19 minutes more on caring and domestic tasks, and 13 minutes more working—totalling just 4 minutes more than the time saved from not needing to prepare for work or commute. Workers found the extra time and a better work-life balance the best points of remote work.
The extra costs incurred from working from home, such as energy used from spending more hours at home, was not seen as a big issue for remote workers. The other side of that is the costs that organisations could potentially save with more people working from home, such as lower utility costs and perhaps the need for less office space.
The risks of remote work
“This is a promising sign for the future. But the pandemic has harmed productivity in other ways,” the report said. Under the pandemic-forced remote-work reality, the biggest barrier workers reported was having tasks that can’t be performed remotely, and the second-biggest barrier was difficulty collaborating.
“Many workers have tasks that cannot be done remotely and have been unable to attend their workplaces,” the report said. Work that cannot be performed remotely currently makes up 56% of the work in New South Wales.
Although one of the conclusions from the report is that people believe they are more productive when working from home (53%), reducing close interaction could affect overall productivity. One reason: People tend to communicate less naturally or spontaneously online.
On the other hand, in 2019, 69% of NSW workers found it easy to collaborate remotely. The report found that this improved to 78% in 2020, when the pandemic forced many more people to embrace remote working.
“A hybrid model may offer the best of both worlds for collaboration and productivity, allowing workers to work remotely on independent tasks, while coming on-site for collaboration. The challenge for workers, people managers, businesses, and policymakers is coordination—ensuring the right people are working onsite at the right times,” the report said.
How remote work could change NSW
The report listed 10 ways remote work could change New South Wales:
- Productivity and living standards could rise.
- Lower congestion could benefit commuters.
- More collaborative offices could result.
- CBDs could be transformed.
- Benefits would not be shared equally.
- New South Wales may need to rethink its infrastructure.
- Health impacts would be complex.
- Local economies could be revitalised.
- Economic opportunity may be less tied to place.
- Many people might relocate—but not far away.