Don’t stray from the sensible centre on working from home

30 October 2025 | Danielle Wood

Has there been a more divisive workplace debate in recent years than the one over working from home? Just as many organisations were settling into a ‘business-as-usual’ rhythm, a recent Fair Work Commission decision – alongside the Victorian Premier’s proposal to make work from home a legal right – has reignited questions about its impact on productivity and worker wellbeing.

But while debate on working from home continues, the evidence suggests that Australia may have already arrived at a sensible middle ground.

We now know far more about remote work than we did five years ago. The COVID-era ‘experiment’ in work from home generated a wealth of studies on how it affects productivity, collaboration, and employee satisfaction. While these studies vary in their findings and methods, and the Australian literature is still evolving, several consistent themes have emerged.

First, we can’t assess the productivity effects of working from home by looking only at individual output. Regardless of how productive a person is at home, their absence from the office may reduce broader productivity over time if it affects collaboration or the culture and learning of their team. For example, a study of software engineers in a Fortune 500 firm found that senior engineers were more productive when working remotely, free from interruptions. But over time, their absence from the office saw junior engineers receive less feedback and develop more slowly.

Business leaders often cite these spillover effects – team culture, opportunities for collaboration, creative problem-solving and mentorship – as key reasons for wanting staff in the office at least part of the week.

Second, even when we account for these broader impacts, hybrid work is generally ok for productivity. Most research finds that well-managed hybrid arrangements – where employees work from home some days in a structured way – are neutral or slightly positive for productivity.

Hybrid workers seem to get as much done on their days at home as they do in their days in the office. When hybrid work is managed well, most of the spillover benefits of being in the office – the serendipitous conversations, the staff mentoring and the culture building – seem to be just as strong in two or three days a week as in five.

On the other hand, many studies have found that fully remote work negatively affects productivity. This is mostly because fully remote work can make teams more disconnected and reduce opportunities for learning (like the software engineers), which erodes output over time.

Finally, workers highly value the ability to work from home at least part of the week.

Before COVID, full-time workers in Australia’s major cities spent an average of 67 minutes per day commuting. Hybrid work frees up this time and offers greater flexibility to manage work and family life. School pick-ups and drop-offs, or even keeping up with household tasks, are more achievable in a hybrid model.

This flexibility has opened doors for people who face barriers to onsite work such as mothers of young children and people with a health condition that affects their ability work. Analysis from CEDA shows that these groups are more likely to be employed now than before the pandemic, contributing to higher labour force participation across the economy.

A survey of Australian employees suggests workers value the option to work in a hybrid fashion as equivalent to 4% to 8% of their salary. Put another way, employers requiring staff to be in the office full time would have to pay up to 8% more to attract staff compared to equally attractive jobs that offer hybrid work.

When you put the evidence together, it aligns nicely with where many Australian employers have landed.

Working from home has become the norm for a lot of workers. The share of Australians who regularly work from home has risen from pre-COVID levels and appears to have stabilised at around 36%.

Most of these are classic hybrid workers. HR Institute data shows that, among jobs that can be done from home, the most common policies require two or three in-office days per week – or encourage office attendance without enforcing strict minimums. Fully remote roles (5%) and those requiring five days in the office (6%) are the exceptions, not the rule.

This is good news. Most employers have landed on a hybrid ‘sweet spot’ that research suggests is good for workers and participation, and helps business attract and retain employees without compromising productivity.

I’ll leave the detailed commentary on new policy proposals and legal cases to others. But given the benefits these working models have unlocked, I get nervous about developments that make it harder or more complex for business to maintain the sensible middle ground that so many have landed on.