Australia at a ‘critical crossroads’ in working from home debate

Australia is at a “critical crossroads” in the working from home debate, with bosses who want their staff back in the office considering a controversial step to make the change more enticing.

This week, the remote and hybrid working debate has been fuelled by announcements from a number major organisations that they would be ordering employees back into the office full time.

In a memo to staff, Australian betting giant, Tabcorp, said all employees across its Sydney, Melbourne and Brisbane locations would be required to return to the office five days a week.

The memo stated the change would be “effective immediately”, but noted some staff members may need time to “adjust schedules and routines”, and they would be given a four-week period to do so.

The move came days after Amazon CEO Andy Jassy announced the company would be axing work from home arrangements to “strengthen our culture and teams” and “deliver the absolute best for customers and the business”.

In August, NSW Premier Chris Minns sparked backlash from government workers when he announced remote working privileges introduced in 2019 would come to an end, with all public servants forced back into the office.

There are fears that Victoria could follow suit, with Melbourne mayoral candidate and former AFL star, Anthony Koutoufides, saying his “first priority” if he wins the election will be to get the city’s government and corporate workers back into the office.

It seems an increasing number of Australian leaders are becoming more vocal about their desire for in-office mandates to return.

A recent survey of 500 Australian business leaders, conducted by HR platform Rippling, found that 62 per cent believe a mandatory return to office would have a beneficial impact on company productivity.

Of those surveyed, one in four said they were already implementing a return to office mandate or were considering doing so within the next year.

Given the findings, Matt Loop, VP and Head of Asia at Rippling, said he wouldn’t be surprised if more organisations in the public and private sector start to follow suit in terms of return to office mandates.

“All signs indicate that we’re at a critical crossroads. Businesses are grappling with stagnant productivity and a stalling economy, while simultaneously being asked to provide greater worker rights and flexibility,” he said.

“This is creating a crisis of trust between employers and their employees.”

If a company feels that it is necessary for staff to return to the office full time, Mr Loop said it is “their prerogative” to do so, noting that many business leaders believe it is key to driving collaborating and productivity.

However, he warned that leaders need to be asking themselves if scrapping flexible working is going to achieve these goals and whether these expectations have been communicated to staff from the start.

If not, then introducing hard line return-to-office policies could backfire and open up new challenges such as reduced morale, higher employee turnover and difficulties attracting new talent.

“It’s crucial for companies to communicate clearly and set the right expectations if they choose this path,” Mr Loop said.

“There are always trade-offs, and businesses need to weigh the benefits of an in-office mandate against the potential costs.”

There are also signs that some employers could be considering more drastic measures to get hesitant staff back into the office.

KPMG’s annual CEO Outlook survey of 1325 CEOs in 11 leading economies, including Australia, found that 82 per cent of Aussie respondents expect that within the years tradition white-collar roles will be fully based in the office.

Of the Australian CEOs, 78 per cent said they were likely to reward employees who make the effort to come into the office through things like raises, promotions and better projects.

The recent research from Rippling showed almost one in three of the Australian business leaders surveyed were considering implementing a higher salary for office-based employees and lower salaries for those who work remotely.

However, there are some clear issues associated with this line of thinking, with Mr Loop claiming employees should be renumerated based on their performance, quality of work and the value they bring to the company, not their physical presence in the office.

“Many companies still fall into the trap of rewarding ‘busyness’ – being present in the office or logging long hours – over actual results, and this is a mindset that needs to change,” he said.

“If two employees are performing the same role and achieving the same results, there is little justification for paying one more simply because they are in the office.

‘This approach could lead to divisions and a sense of inequity within teams. It is time to modernise our approach to compensation, focusing more on the value and impact delivered.”

In a recent survey, news.com.au asked Aussies whether they thought those who work from home should be paid less than in-office workers doing the same role.

While the majority of the more than 13,200 respondents were against the idea, a surprising amount thought the suggestion was reasonable.

Just over 60 per cent of respondents believed that pay should be based on the work and performance of the employee, not the location where the work is being done.

However, 37 per cent, or around 4900 people, thought the idea of paying remote workers less was a good one and that people should be rewarded for going into the office.

Craig Sneesby, managing director of u & u Recruitment Partners, previously told news.com.au that the power has shifted in favour of employers, with leaders now in a position to make more demands that staff may have previously pushed back on, including scaling back remote work and bringing employees back into the office.

He also warned that in-office workers may have a leg up when it comes to be considered for promotions and pay rises.

“If there are two deserving employees who are producing similar results fighting for one promotion then managers are naturally going to side with the person who is contributing more to their organisation from a holistic standpoint,” Mr Sneesby said.