Working from home – the new reality, or business as usual?

In this article, Glenn takes a look at the much-discussed phenomenon of working from home. While COVID-19’s long-term impact on our working lives is yet to be seen, the 2016 Census provides an important base-line ahead of the 2021 Census to start understanding fundamental shifts in how we work.

Of the many things which are changing in our world with the COVID-19 pandemic, one of the biggest is the idea that far greater numbers of people have to work from home. With social distancing requirements closing many offices, large chunks of the workforce have set up home offices, attended meetings via Zoom, Teams, Skype and other video-conference software, and many organisations are learning how to work remotely. I’ve seen estimates ranging from 20% to 50% of the workforce now working from home.

The latest ABS national survey published on May 18th has the figure at 46% in late April. On the news every night you see various experts interviewed on their couches, with kids in the background, and “Unmute yourself” is unofficially one the most spoken phrases of the year (“unprecedented”, anyone?). There are questions about whether working from home will continue after COVID-19 passes, but for now it seems to be becoming that other much-overused phrase “the new normal”.

But how new is it? We know that part of the population has worked from home for a long time. We also know that many jobs just can’t be worked from home, but many white-collar, creative and knowledge-based jobs can. Fortunately the Australian Census has included a question on this for the past 25 years. Information from this will be vitally important in the 2021 Census, but for now, let’s get a baseline and have a look at how many people worked from home in “normal” times.

A pre-COVID baseline

The 2016 Census recorded 503,581 people working at home on Census day – 4.7% of the total workforce, or around 1 in 20 people.  This was up from 4.4% in 2011, but interestingly represented a decline from a peak of 5.6% in 1996.  So, although the prospect of widespread “telecommuting” or remote working has been discussed for many years, there is no indication of a significant move to this style of working prior to COVID-19.

It’s also worth remembering that the Census specifically asks how each person got to work on census day. So it may not be indicative of the “usual” method of travel, or working from home. In fact, with the Census being a Tuesday, that is anecdotally the day of the week when more people are in the office than any other (certainly it’s usually got the most traffic) – so even those who more often work from home may be in on a Tuesday. This is backed up by the New Zealand Census, which in 2018 recorded 11.9% of the workforce working from home, more than double the rate in Australia. The New Zealand Census does ask for the “main” or “usual” method of travel.

Industries and sole traders

But this doesn’t tell the whole story. If you look at the areas with the greatest proportion of people working from home, they are largely rural areas, with a high proportion of employment in Agriculture. In fact the top 10 are mainly remote farming areas in SA and WA.

Top 10 LGAs by proportion of employed persons working at home, 2016 Census

This doesn’t represent telecommuting – just people working on their own farms. Agriculture has by far the largest percentage of any industry, at 27.1%.  Likewise, industries such as Construction have a relatively high proportion due to sole traders – tradespeople who use their home as a base. But the next highest is Professional, Scientific and Technical Services, at 12.9%.  These examples are largely  “home based businesses”, and are shown in our social atlas making up 2.8% of Australia’s workforce – or a little over half those who worked from home on Census day. Those working in them are likely to be sole traders or small employers and are working at home in their own business.

The phenomenon we are currently seeing, by necessity during the pandemic, is greater numbers of employees working from home. The Census does record this, but you need to drill down a bit further to see it.

Employees working from home

Restricting figures to just employees shows quite a different picture. While the highest percentage is still in Agriculture, it’s only 5.1%. Next highest is Professional, Scientific and Technical Services at 4.8%, and Information, Media and Telecommunications at 3.9%. (You would think that the telecommunications sector would be one of the easiest to work from home, but still only 1 in 25 employees did so in 2016.)

What this shows is that really, working from home as an employee – before COVID-19 – was very much the exception rather than the rule. Any areas with high WFH rates are largely due to the influence of home-based businesses, which are prevalent in Agriculture, but also in more affluent suburbs, where people may run a consultancy from home. For example, Boroondara in Melbourne and Mosman in Sydney show relatively high rates (but still only around 5%).

As expected, service and knowledge industries do have a higher rate of working from home, but in no industry does it exceed one employee in 20. Bearing in mind that this is based on Census being on a Tuesday, it’s likely that even on other days the rate is not more than double what’s shown here (and anecdotally, with 2016 Census having well known collection issues, many answered well after the day and may have responded with their “usual” method anyway).

So up to 2016 at least, the likelihood of any employee working remotely from home or elsewhere was quite low. This makes the change we’re seeing now with COVID-19 more remarkable. Obviously a large proportion of those jobs can be done from home, but the workplace model really has not supported it until now. We don’t know how many are working from home, but even the lowest estimates of around 20% of the workforce would represent approximately a 5-fold increase from the numbers seen in the 2016 Census, while the upper range estimates would give a 20-fold increase.

Looking forward

This is quite profound, and it begs the question – “When (if) we return to normal, will people go back to the office?”. We are currently seeing the economy starting to open up again.  For jobs that can be worked remotely, will employers allow, and will employees choose to continue working from home? There are certainly some advantages, with less commute time and potentially less distractions. But there are plenty of downsides as well, with difficulty separating work and home life, and lack of social interactions based around work.

The implications could be enormous if this continues. Many commentators have been talking about a shift to home-based work, and a reduction in the need for office space, transport infrastructure etc. for decades. Could a virus be what finally makes it mainstream? But how mainstream is mainstream. By the 2021 Census, will we see a modest increase to 10% WFH, which would still be more than tripling of the 2016 numbers? Or will it be a more drastic 30-40%, and a big shift away from office based work for all white-collars?

We don’t have those answers yet. Even here at .id, we are still discovering how it’s going to work at our company in the long term. But you do have pre-COVID-19 baseline data for this in the community profile and social atlas tools.

The community profile for Local Government Areas includes the Method of Travel to Work section (under “What do we do?”), which includes home-based work. Here is a link to the page on our Australia profile, but it exists on all our client sites.

Also, on the social atlas (atlas.id), there is a map under the “Transport” section, which shows where people work at home in a home-based business.

If you need any further analysis, please get in touch with us. Some examples of this work are on the demographic consulting page.