Working from home less productive, but experts say it will stay here

The Covid pandemic has brought about one of the biggest changes in Australian business over the past half century: working from home.

Before the virus hit the country, less than eight percent of Australians were working from home. Now 40 percent do.

While the change was forced upon us by circumstances beyond our control, there’s no question that it’s here to stay – for better or worse.

But there are concerns that it makes people less productive, with a new study showing that working from home increases the risk of making mistakes.

Before the Covid-19 pandemic, less than eight percent of Australians were working from home. Now 40 percent do.

The study, which focused on chess players, found that the standard was significantly worse when players competed online rather than face-to-face, suggesting that being out of the office is detrimental to productivity.

They tracked nearly 215,000 players’ chess moves during personal and digital tournaments and compared them to what was the best game using artificial intelligence.

Dainis Zegners of the Rotterdam School of Management, one of the study’s co-authors, said the study showed that remote working can hinder people’s ability to perform mentally intensive tasks on their own.

“Cognitive skills used in chess are also used for complex tasks such as drafting a legal contract or drafting a tender document — the kinds of tasks that require clear and precise thinking.”

But the Australian Productivity Commission has released a report saying that working from home is here to stay.

“While this percentage (of people working from home) will not always remain this high, it is inevitable that more Australians will work from home,” said Michael Brennan, chairman of the Productivity Commission.

The main advantage for employees is that they do not have to commute. In 2019, full-time workers in major Australian cities spent an average of about 67 minutes per day commuting, which equated to $49 in revenue, excluding vehicle costs.

For those who took public transportation, the average time value and transportation cost was $57 per day.

A new study has found that remote working can hinder people's ability to perform mentally intensive tasks alone, and that office work is more productive

A new study has found that remote working can hinder people’s ability to perform mentally intensive tasks alone, and that office work is more productive

The Productivity Commission report said: few employees prefer to work completely remotely, and most want to spend some time in the office.

It points out that “working from home has actual or perceived costs, such as reduced opportunities for collaboration and networking, decreased personal interaction with managers, and impact on long-term career prospects.”

But it also points to many potential benefits, namely that employees can be more productive at home because they have more control over their time and have a better work-life balance.

It says working from home could allow employers to tap into a larger pool of workers, and that “while not strictly a productivity impact, workers have been shown to work longer when they work from home during the pandemic”.

Working from home can lead to significant savings on commuter transportation costs

Working from home can lead to significant savings on commuter transportation costs

WFH stifles creativity, communication and teamwork – study

Working from home reduces creativity, communication and teamwork, according to a study by researchers at Microsoft.

Researchers at the tech giant looked at data from more than 61,000 employees at the company from December 2019, prior to the lockdown, to June 2020.

They found that working from home (WFH) made employees “more silent on how they communicate” and forced them to engage in fewer real-time conversations.

It also made it more difficult for employees from different departments to acquire and share new information, which could affect a company’s ‘productivity and innovation’.

While some employers may also be able to save on office rent, others may be tied to long-term leases and may be reluctant to give up office space while still experimenting with working from home.

In October, one of Australia’s largest private health insurers, NIB, announced that its employees would be paid $1,200 on top of their annual salary to stay at home as the company morphs into a post-covid remote working model.

“A revolving 12-month payment of $1,200 is really an acknowledgment that we are effectively renting people’s homes,” said NIB chief executive Mark Fitzgibbon.

“But the other change we’re making is the idea that there’s something magical about a five-day work week – under this new policy it could be four days, provided you’re still working your 38 hours.”

Despite the chess research findings, Mr. Brennan said working from home might make people more productive.

“On balance, working from home can bring significant benefits in terms of flexibility and time for employees and even increase the productivity of the country.

“Risks can be managed, but we have to watch them and be ready to intervene if necessary,” he said.

However, the new model is not a one size fits all situation. “Working from home will not be right for everyone or every company, but for many employees, working from home will be a factor in deciding which job to take.

“Some employees have even indicated they are willing to pay less in exchange for the ability to work from home,” says Michael Brennan.

The Commission’s report states that governments should support the transition from home working at this stage and not take immediate action.

‘There is a long history of technology enabling different ways of working. The Covid-19 forced experiment has greatly accelerated technology adoption, including the technology that makes it possible to work from home,” said Michael Brennan.

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