The office returns: are the days of Australians working from home numbered?

“For me an office environment is quite overwhelming and quite difficult,” says Josh, looking out his kitchen window at the suburbs of western Sydney. He works for a major corporation that recently requested staff come back in to offices for half their working week.

The in-person workplace is a complex place to navigate for Josh, who lives with attention deficit hyperactivity disorder and autism. “I didn’t realise how much of the energy drain was actually just from being in the office until I didn’t have to work from there any more,” he says. Josh has been granted an exemption to work from home, but he worries it may be overruled.

Like hundreds of thousands of workers, Josh started working from home during the Covid lockdowns. The pandemic, by necessity, disrupted a centuries-old agreement between employers and employees: that employees’ workday was defined by a set time and location. Working anywhere else was the exception rather than the rule. However, while working from home during lockdowns, many employees have begun to prefer or even demand more flexibility. Now, as employers begin to set limits on remote workers, work from home is emerging as a new tension.

“Over the next five years they’re going to bring people back into the office. That’s the trajectory,” says Prof Christina Boedker of the University of Newcastle business school. Boedker’s prediction appears mild when compared with a KPMG report, published last week, that found two-thirds of 1,300 CEOs surveyed expect employees back full-time within three years. Nine out of 10 of those surveyed said they intended to reward employees who returned to the office with better pay, assignments or promotions.

There are signs that a shift to working more from the office is already under way. In May, the National Australia Bank’s chief executive, Ross McEwan, asked senior managers to return on all weekdays, while last month, Zoom, the service that made work from home possible for millions, required workers within 80km from its offices to return two days a week.

As employers seek to codify minimums or full-time working from the office, unions are pushing back, seeking more flexibility for workers to be able to work from home more if they want to.

When the Commonwealth Bank said staff would be expected to spend half their month in the office, the Finance Sector Union (FSU) went to the Fair Work Commission, asking CBA to offer “all affected staff remote working arrangements on mutually agreeable terms”, the union’s national secretary, Julia Angrisano, says. The dispute is ongoing. Separately, the FSU won National Australia Bank staff the right to negotiate individually how much each worker comes in to the office, free of mandates.

Meanwhile, the Community and Public Sector Union won the removal of any caps on days working from home for its 120,000 members, who considered “flexible work and work from home as one of their top priorities in enterprise agreement bargaining”, the CPSU national secretary, Melissa Donnelly, says.

“When employers want to turn back the clock, workers are saying, ‘why are you trying to change something that is working really well for everybody?’” Angrisano says.

But whether unlimited working-from-home arrangements work for everybody is a matter of some contention.

Productivity is often cited as one reason for the push to set minimum working-from-office limits.

“[Productivity] in its purest sense – output over time – that’s best served working at home,” argues Dr Benjamin Hamer. The adjunct fellow at Swinburne University’s Future of Work Lab points to US Bureau of Labor Statistics quarterly reports that showed a drop in productivity across non-farm businesses (which accounts for about 80% of the total US workforce) when workers were allowed back.

If productivity is considered in a sense broader than pure output, as a measure that encompasses morale and engagement, says Hamer, then the office is more productive than the home. The office “gives you those relationships, the forum for conversations, engagement, those incidental corridor conversations that lead you to provide better outcomes”, Hamer says.

The recent KPMG report, meanwhile, suggests that hybrid working over the past three years “has had a largely positive impact on productivity”.

And then there is the question of trust. Without sight of their employees, some employers question whether their staff are doing the hours – or the job – they are being paid to do.

Boedker suggests there is both “insecurity” and “the need to intensify control” among some employers who are wondering of their staff, “Are they off on the tennis courts or picking up kids or having coffee?”

Angrisano, the union secretary, however, says: “Where employees are trusted by their employers to really determine for themselves through workplace democracy, you get great outcomes.”

For Michelle Markham, the Asia Pacific director of sales at Microsoft, working from home full-time during the pandemic meant anything but skiving off. During Covid she worked late at night after her children went to bed. “I loved every day of it,” she says about that time, explaining: “We got really efficient with our time because we didn’t have any commute time.” Lockdowns allowed her to go running and see her four children more, playing tennis or going for walks in the middle of the day. Now back at the office two days a week, “I spend a lot less time with the kids than I would like”.

“I literally work at least 12 hours a day, so a lot of spending time with kids and domestic chores happens on the weekend,” she says.

However, Microsoft is flexible, she says, and its staff are adept at remote collaboration. Once in the office, she enjoys it. “It’s a really good way to create a boundary for my home and work life.”

This flexibility allows Markham to make daytime appointments like taking children to the doctor or going to the hairdresser, but it also means working from home at night.

With unemployment at 3.7%, just up from a record-low 3.4% last year, many workers can simply leave if their employer does not offer the level of flexibility they want. A 2022 PwC report, cowritten by Hamer, found that if forced to return to the office full-time, a third of workers would consider just that.

The cost-of-living crisis is another factor in worker reluctance to return to the office. The PwC report found the main reason people want to work from home is to save money. “The cost of commuting into the office, or renegotiating childcare hits the hip pocket,” says Hamer.

One employee of a major international tech company, who spoke to the Guardian on the condition of anonymity, moved to the Central Coast when told all work would be remote, then later, was told to come back into the Sydney office three days a week. Despite his time working on the train counting toward a full day, with a very young family and both parents again required to return to their city offices, the tech worker feared his two-hour commute jeopardised his ability to be with his family in case of emergency. So he uprooted his family and moved back.

Beneath the headlines of conflict, many employees acknowledge the benefits of working from the office.

A soon-to-be-published peer-reviewed survey of 2,400 workers run by Boedker and colleague Kieron Meagher, found depression, loneliness, anxiety and “negative affect” (feelings of irritability) to be much higher among employees working solely from home. The study found depression, anxiety and negative affect peaked in a hybrid model. The survey also found productivity as reported by respondents was lowest and interpersonal conflict peaked when staff split time between home and office. However, according to the authors, much could be mitigated with quality leadership.

The function of the office has changed, according to Hamer. No longer just a place to get the job done, it has “shifted from being a battery farm of productivity to where we go to build psychological safety, build and drive innovation culture [and] build relationships as part of employee retention”.

Markham, as a regional manager, is “strongly encouraging” her own staff to come in two days a week. It is not productivity that drives her request, but an awareness that younger employees need proximity to colleagues and experiences, as well as visibility to progress in their careers. They “desperately need the networking”, she says.

“It’s easier to get [those in their] earlier careers back in the office than it is to get the mums and dads back.” Younger workers are also more likely to be living in sharehouses or with parents, places that are less conducive to working from home. “The younger cohorts are the most vulnerable” to loneliness and anxiety, says Boedker.

For Simarjot Alag, a recent graduate and business analyst for an education platform, being in the office has real benefits: it has been integral to her career development, including building the confidence to ask for help and guidance from senior staff.

“When we are in the office, it is great that I can just walk up to people and ask those questions,” she says. “When we are working from home, I have to find a time in their calendar. Most calendars are already booked for weeks.”