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9 News
3 days ago
- Business
- 9 News
Is working from home behind a drop in national production levels?
Your web browser is no longer supported. To improve your experience update it here The new report looked at the "productivity bubble" in which labour productivity rose during the COVID-19 pandemic between January 2020 and March 2022, and the reasons for its subsequent decline. "The COVID-19 pandemic was a rollercoaster for productivity, but we are now back to the stagnant status quo," commission deputy chair Dr Alex Robson said. The COVID-19 lockdowns have led to a lasting change in Australia's workforce. (Getty) The report found productivity grew in that time because those industries hardest hit, such as accommodation and food services, were those with the lowest labour productivity. This meant the workforce by default shifted to have an emphasis on more productive sectors. Productivity experienced more genuine growth from December 2020 to March 2022, as worker output improved and the labour market began to recover. Working from home is not deemed threatening to productivity, a new report has found. (Getty) But it's the phase after that - the "productivity loss" phase between June 2022 and June 2023 - which the report was built around. It found that the investment in equipment, tools and resources needed to get the most out of work didn't keep pace with the increase in hours worked post-lockdowns. People were working longer hours, but with less support to help their productivity. Also, many younger and less experienced people joined the workforce after years in and out of lockdown and shrinking employment. But working from home was not among the report's culprits for lost productivity. While it found research suggested fully remote working with no in-person interaction could make people less productive, the report also found hybrid models helped boost job satisfaction, worker retention, and potentially productivity. Working from home "all or most days" of the week has also tripled around the country from the start of the pandemic (12 per cent) to August 2024 (36 per cent). The report did note that less experienced and younger workers may benefit from more in-person work. "However, given most studies find hybrid work to be either neutral or positive for labour productivity, there is no evidence to suggests that the trend towards hybrid working has contributed to the productivity loss phase of the productivity bubble," the report said. Robson said the "big lesson" of the burst productivity bubble was that there were "no shortcuts" to growing productivity. 'Tackling our productivity problem will require dedicated effort and reform from business and government," he said. The commission will pass the results of five inquiries into the issue to the government this year. employment workplace Workers work jobs Australia national CONTACT US Property News: You can only access this beach shack at low tide.
News.com.au
5 days ago
- Business
- News.com.au
New report settles Australia's working from home debate once and for all
This year we have seen a notable uptick in companies rolling back flexible working arrangements, with staff forced back into the office five days a week. One of the most common reasons bosses often give for scrapping remote and hybrid work is to 'improve productivity'. Well, we now have confirmation this is (most likely) not the truth. A new report from The Productivity Commission has explored the reason behind the Australian workforce's dip in productivity and, surprise surprise, working from home is not to blame. The report explores the phenomenon known as the 'Covid productivity bubble', which is where labour productivity rose to a record high between January 2020 and March 2022, before returning to pre-pandemic levels in June 2023. The Productivity Commission found the 'bubble' only served to mask the issues of Australia's ongoing productivity problem. 'The Covid-19 pandemic was a rollercoaster for productivity, but we are now back to the stagnant status quo,' Deputy Chair Dr Alex Robson said. The 'productivity loss' phase between June 2022 and June 2023 has been attributed to a surge in the labour market as Covid restrictions eased. Since then, the hours Australians work each week have been soaring, but this has not been matched by investment in systems and equipment needed to get the most out of the workforce, hence the drop in productivity, according to the report. One of the lasting changes brought on by the Covid-19 pandemic and subsequent lockdowns has been the shift to hybrid models. While there has been a push to get people back into the office full time, the rates of working from home are still significantly higher than pre-pandemic levels. According to the report, prior to the pandemic, 11 per cent of working age Australian adults reported working from home at least once a week over the previous four weeks, and 12 per cent worked from home on all or most days a week. During the severe lockdown, the proportion of those working from home at least once a week decreased to nine per cent and the number of people working remotely all or most days increased to 31 per cent. In April 2022, after lockdowns and restrictions eased, rates went to 18 per cent at least once a week and 27 per cent all or most days, indicating an increased popularity in hybrid arrangements. By August 2024, an Australian Bureau of Statistics survey showed 36 per cent of people reported that they usually work from home, indicating a sustained shift in work practices. Despite concerns and even some claims from industry leaders that the working from home shift would lead to productivity loss, the Productivity Commission found it didn't have any negative implications and, in fact, hybrid work can be beneficial. 'Workers do not need to be in the office full-time to experience the benefits of in-person interactions. As a result, hybrid work tends to be beneficial to productivity, or at least, is not detrimental to productivity,' the report states. Sabrina Scherm, customer success manager at HR technology company HiBob, claimed many companies are actually making the productivity problem worse with return to office mandates. 'These mandates fundamentally ignore the lessons learned during the pandemic's so-called 'productivity bubble', where workers demonstrated they could be highly effective when given the flexibility and autonomy to manage their time and working environment,' she said. 'To force employees back into rigid structures isn't just misguided; it actively risks stifling future productivity gains. 'Instead of focusing on an attendance-first mindset, the conversation must be around a results-first mindset. And we need to stop associating 'harder' work with 'longer' work.' Allowing workers to work from home some days a week can improve employee satisfaction and allows people the benefit of avoiding a commute, meaning they have additional time for other purposes, the report stated. The research also cited studies that indicate remote work can reduce breaks and sick days and result in less distractions, all of which are typically found to be beneficial to productivity. Ms Scherm believes the path to sustainable productivity lies in working 'smarter'. 'That means embracing modern tech to automate mundane, time-consuming tasks that add hours but little value,' she said. 'We can achieve genuine, long-term productivity gains by freeing up our workforce to focus on innovation and high-impact activities.' However, the report also included claims that fully remote work could have a greater negative impact on less experienced workers. For those starting out in the workforce, in-person interaction may be important for skill development 'as there may be a greater knowledge transfer from senior workers and junior workers through informal in-person interactions'. The Commission noted that the evidence on working from home is still evolving but, ultimately found hybrid work has either had a neutral or positive for labour productivity. 'There is no evidence to suggests that the trend towards hybrid working has contributed to the productivity loss phase of the productivity bubble,' the report stated.
The Guardian
6 days ago
- Business
- The Guardian
Working from home not to blame for dip in productivity, Australian report says
The national shift to working from home is not to blame for the sharp drop in productivity in the wake of the pandemic, the Productivity Commission says. A new report by the PC examines causes for the brief productivity 'bubble' during the height of the Covid-19 health crisis and its subsequent collapse, finding that the whiplash was driven in large part by the sharp drop in working hours through the lockdowns, followed by a surge in hours worked as the economy roared back to life. Alex Robson, the PC's deputy chair, said the 'pandemic was a rollercoaster for productivity, but we are now back to the stagnant status quo'. The PC report finds that Covid-19 did not fundamentally alter the country's productivity, including one of the lasting societal shifts: the big lift in Australians working from home. Before the pandemic, 11% of working age Australians reported they worked from home at least once a week, and a similar proportion said they worked from home on all or most days of the week. During lockdowns in September, a lower 9% worked from home at least once a week, but the share working most or all days at home had jumped to 31%. By April 2022, most restrictions had been lifted, leaving a higher 18% working at least one day at home, and 27% most or all days. And in August last year, an Australian Bureau of Statistics survey showed 36% of employed Australians reported they usually worked from home. Despite fears that workers would slack off at home, the PC report said the research suggested hybrid working had not dragged on productivity, although 'studies suggest that fully remote work during the pandemic was likely to be detrimental to productivity'. 'Workers do not need to be in the office full-time to experience the benefits of in-person interactions. 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,' the report said. Studies show working from home lifts job satisfaction, and that employees were willing to sacrifice 7-8% of their pay in return for the additional flexibility and to avoid long commutes, the PC said. 'Remote work also reduces breaks and sick-days, and results in less distractions, all of which are typically found to be beneficial for productivity.' Less experienced workers, however, could lose out by not having in-person access to more skilled colleagues, the report said. Reinvigorating the economy's flagging dynamism is a priority for the newly reelected Albanese government, after Labor's first three years back in power were dominated by a once-in-a-generation surge in consumer prices. In a speech to the Australian Business Economists on Wednesday, Treasury secretary Steven Kennedy said 'finding ways to improve productivity growth has proved elusive over the past two decades'. 'Australia's 20-year average productivity growth has declined from 1.8% to 0.8% over that period,' Kennedy said. Kennedy said the government's competition reforms, including a $900m federal fund to incentivise states and territories to undertake pro-competition reforms, and removing state-based licensing requirements for skilled workers such as electricians were steps in the right direction. 'Pursuing a least-cost approach to reducing emissions will be a key productivity challenge for Australia,' he said, as he backed expanding the safeguard mechanism, which sets baseline carbon emissions targets for the country's biggest emitters.
ABC News
7 days ago
- Business
- ABC News
Can lessons from COVID productivity rollercoaster boost Australia's productivity now?
Productivity Commission deputy chair Alex Robson says recent research by the commission showed "a strange effect" of a labour productivity bubble as sectors shut down during COVID. #ABCBusiness
ABC News
7 days ago
- Business
- ABC News
Longer hours but less productive: Australians need to work 'smarter', not harder, report warns
Australia is facing an urgent productivity problem, with a new report showing the country is at a standstill despite a temporary "bubble" of improvement during the COVID-19 pandemic. Australians have been working record-long hours, which contributed to the productivity slump, the Productivity Commission report found. Those additional hours performed by workers have not been matched by business investment in systems and technologies that would allow them to work efficiently, according to the report. For living standards to improve over time, there needed to be more output from work done, Productivity Commission deputy chair Alex Robson said. "People having jobs is obviously a great thing. You can get more money if you work longer, but that's not a recipe for prosperity over the longer term," he said. The report highlighted the productivity "bubble" during the COVID years, in which temporary changes in the economy led to sharp gains in the first two years of the pandemic, which were all lost by late 2023. But its main concern was decade-long stagnation, driven by complex factors now under further review by the Productivity Commission. These factors included challenges improving efficiency in service industries, which now make up 80 per cent of Australia's GDP, as well as under-investments in both technology and management practices, and the burden of regulation. "In the year just gone, multi-factor productivity will grow 0.07 per cent, which is just a risible number. It is really a rounding error," said Australian Industry Group CEO Innes Willox, who has long advocated for productivity growth. Mr Willox said businesses were not making investments that would improve productivity because of broader economic conditions they faced every day, such as tax, deregulation and compliance. He pointed to productivity in housing and apartment construction, as well as the care sector, as the "real laggards" in growth. Sally McManus, secretary of the Australian Council of Trade Unions, said worries about stagnant productivity had led to "quick fix" solutions, including casualising the workforce. "It's basically to hit workers over the head and try and blame us and try and say 'well, see workers of Australia, you're not productive enough'. Nick Davis, from the Human Technology Institute at the University of Technology Sydney, said the report highlighted you cannot just rely on closing or shutting off less productive parts of the economy. Instead, he said, there was a need to invest in capital — and that went far beyond new laptops, AI and cloud services. "We need to make sure as workers become more experienced, it's about making sure workers can really use those, making sure they're well governed, and the way we work is redesigned to get better quality outputs," he said. Mr Willox said it was crucial to broaden what businesses invested in. "We are going into a new age of digitalisation and decarbonisation and businesses are going to have to invest more in their people to upskill them." The Productivity Commission has started five inquiries across sectors, including the care economy, technology, workforce skills and net zero, to look for policy solutions. The findings are due later this year. The care economy is a particularly complex case. Productivity Commission data showed a decline in labour productivity among care workers, contributing significantly (18 per cent) to the overall drop. But Mr Robson said measuring output in the care sector was "difficult" and "misleading" using conventional methods. He attributed the statistical drag partly to the rapid increase in employment and hours in the sector, meaning "lots of newer workers who might be less experienced" temporarily lowered the output per worker as they learned on the job. Mr Willox said the decline in productivity in the care sector stressed the need to "think smarter very quickly" as its weight in the economy grew, particularly through investment in the National Disability Insurance Scheme. Ms McManus, however, questioned the whole notion of productivity in the care economy and economists' ability to measure it. She said measures that showed a drop in productivity — such as mandated patient ratios — ignored the fact these changes led to "better human outcomes" that were "much more valuable" than statistical productivity figures, including better care for sick people, nappies changed in aged care, and medication on time.
