Coronavirus has forced Australians to work from home, but what are the impacts on CBDs?
Over more than a decade, tens of thousands of Australian workers have made the transition out of the physical workplace and into the home office.
Since the COVID-19 shutdowns, almost half of the Australian working population has spent time working from home.
Experts believe at least a significant minority of these newly-at-home workers will stay there in the longer term, with potentially dramatic consequences for the central business districts of Australia’s capital cities.
Many of Australia’s largest corporate employers are keeping most of their staff at home for now.
Some city-based small business owners are worried their customer base may never return to pre-COVID-19 levels.
A recent study found that most Australian workers now want to work at home two weekdays out of every five.
Getting the balance right
Professor John Buchanan, head of business analytics at the Sydney Business School, said there were strong incentives for business operators to keep workers at home, and strong incentives for workers to stay there.
“Employers are looking at reducing costs,” he said.
“If you cut half of the size of your … [office] requirement in the CBD in Sydney that’s a monumental saving.
“On the supply side, there are workers … looking for more accommodating arrangements.”
Frustration about commuting times and a “recognition of the need to have a better balance” between work and family life are also strong factors, Professor Buchanan said.
Bosses generally want to keep an eye on what their employees are doing, and workers can suffer mental health and family consequences if the line between home life and work becomes chronically blurred.
But Professor Buchanan argued employers were likely to push for greater surveillance of workers at home — just as universities have turned to online software to stop students cheating on exams — rather than miss the cost-saving benefits of leasing less physical space.
Overseas, the coronavirus crisis has caused major global businesses to discover they may be better off allowing staff to work from home.
The birth of a trend
If you wind the clock back to November 2008, when the Global Financial Crisis was raging, only about one in every hundred Australian employees, excluding business managers, worked mainly from home according to the Australian Bureau of Statistics (ABS).
By 2019, before COVID-19 was detected in Australia, about a third of the country’s working population was regularly working from home.
As April turned to May this year, after Australia’s first coronavirus wave peaked, nearly half of the Australian workforce — 46 per cent — was mainly working from home.
Michelle Marquardt, program manager for the ABS household survey, said that although many workers will return to their former workplaces, some will not.
“There certainly will be less people going into the workplace,” she said, adding that this may have an impact on those workers’ mental health.
The impact on CBD businesses
Office workers help sustain all manner of hospitality venues, retail stores, cultural and arts institutions — and less directly, government coffers — by spending money and engaging in the life of the city.
At the time of the last Census, about 420,000 people travelled in and out of Sydney’s CBD to work each day.
That’s about three quarters of that city’s working population.
It’s an even higher proportion in Adelaide, where about 95 per cent of city workers made the commute.
Linh Nguyen owns an Asian takeaway restaurant in the centre of Adelaide’s CBD with her sister Bich, serving lunch mostly to office workers.
Although business has begun to pick back up since the initial COVID-19 shutdowns, she’s worried it will never return to pre-pandemic levels.
“A few customers have actually said they work a lot better from home and they wouldn’t mind staying [and] not having to spend so much money on lunch and coffees,” she said.
“They don’t have to waste time commuting [and] they didn’t realise how much money they were spending until COVID happened.
“That has definitely been weighing on us. I don’t think it will go back to normal … it’s a bit concerning for the future.”
Ms Nguyen said she and her sister had been focusing more on the catering side of the business, and pushing to be more visible on social media, to mitigate the impact.
“Most of our customers are people who work in government jobs and office jobs,” she said.
“We definitely have to try to change with what’s happening — that’s the only way to survive really.”
Major corporates keeping workers home
With the COVID-19 pandemic far from over, many of Australia’s biggest white-collar employers are taking a cautious approach and keeping the vast majority of workers at home.
The Commonwealth Bank has said about 5,950 of its employees were working in city offices around Australia during a one-week period last month — down from almost 18,000 during the first week of February.
Westpac said in a statement that it was “continuing with a distributed workforce for the foreseeable future, with a mix of people working from home and working in the office each week”.
“In March we scaled from around 1,000 to 22,000 employees in Australia working from home in just two weeks,” a spokesperson said.
Major financial services and consultancy firm Deloitte said an unexpected benefit of the working-from-home arrangement was “finding out that in our profession, and with our investment in technology and people policies, we have been able to work from home effectively at very short notice for extended periods of time”.
A Deloitte spokesperson said the company was committed to its physical office space around the country, but noted that a new “skillset” had emerged in a “physical-digital hybrid environment”.
“The physical workplace will remain important for encouraging activities that bring our people, partners and clients together,” the spokesperson said.
“These distinctly human activities will be supported and augmented by the use of digital technologies.”
Commercial real estate and workplace culture
Property Council of Australia national president Ken Morrison said it was clear some businesses would not return all their staff to offices at pre-pandemic levels — but that is yet to be reflected in commercial real estate statistics.
“There’s no doubt some [businesses] will make that decision to lease less space over time,” he said.
“What we have yet to see in the market place is examples of existing tenants offloading office space.
“We may well in the future.”
However, Mr Morrison said that despite the significant changes to working arrangements, offices and CBDs were likely to remain “a really important part of the economy”.
“People are asking … is the role of the CBD dead, or under challenge?” he said.
“There is a lot of economic activity which is dependent on people being in the CBD.
“The reason why businesses bring people together [is] for productivity, to solve problems [and] for culture.”