Australia Covid-19 , HR, workforce and communications

The shift to remote work during the COVID-19 pandemic: opportunities and challenges


  • One of the early and ongoing impacts of COVID-19, both globally and locally, has been the forced shift to working from home for large proportions of the workforce. In Australia, from the 23rd of March 2020, those who could work from home were urged to do so and many, particularly those in the larger cities (with Melbourne moving back into lockdown being an extreme example), continue to work remotely.
  • This briefing looks at the occupations and spatial patterns of remote workers in Australia, and the trend’s possible implications for the future of work and the future of cities – informed by analysis by Richard Florida, Andrés Rodríguez-Pose & Michael Storper’s recent paper: Cities in a Post-COVID World, and also the NSW Productivity Commission’s recent report: Our experience during COVID-19 and what it means for the future of work.
  • This briefing will be of interest to local councils which are experiencing a surge of working from home, and planning and economic development officers that will be considering remote working’s impacts on local and neighbourhood centres, as well as facilities, for supporting this change in use.

Briefing in full

One of the early and ongoing impacts of COVID-19, globally and locally, has been the shift to working from home for large proportions of workers. In Australia, from the 23rd of March 2020, those who could work from home were urged to do so.

At the peak of the nationwide shutdown, the ABS Household Impacts of COVID-19 Survey (29 Apr – 4 May 2020), found nearly half (46 per cent) of all Australians who were working in late-April to early-May said they were working from home, with women more likely to have been working from home than men (56 per cent compared with 38 per cent).

Six months on, many of those who made the switch to work from home are yet to return to the office. For example: in Melbourne, the State Government’s reopening roadmap identifies the return to work as the last step, occurring only under ‘COVID Normal’ conditions. In September 2020, the ABS Business Indicators, Business Impacts of COVID-19 found two in five employing businesses currently have staff teleworking (43 per cent), compared to 23 per cent prior to COVID 19. 29 per cent expect staff to continue to telework once restrictions are lifted and conditions stabilise.

Of employed Australians, 31 per cent worked from home most days during the month of September, compared to 12 per cent before restrictions were put in place in March. Rates of working from home differed significantly across the country, with 43 per cent working from home in Victoria, 32 per cent in NSW and 22 per cent for the rest of Australia.

This dramatic shift, occurring almost instantly in cities and households across the globe, has seen a great deal of speculation as to what this means for the future of work, the future of cities, and how and where we live. This briefing looks at the occupations and spatial patterns of remote working in Australia and their possible implications for the future of work and the future of cities, informed by Richard Florida, Andrés Rodríguez-Pose & Michael Storper’s recent paper: Cities in a Post-COVID World, and also the NSW Productivity Commission’s recent report: Our experience during COVID-19 and what it means for the future of work.

Who is working from home?

The ability to work from home typically applies to white-collar knowledge workers, individuals who also are more likely to have the benefits of access to a personal car and may also live in pleasant, uncrowded homes. The disparity among workers and occupations that can and can’t work from home has been brought to the fore by COVID-19 with those in white-collar jobs typically able to lockdown at home, while those in healthcare, aged care, freight and logistics, abattoirs, retail and other service industry jobs continue to work outside the home and in a higher-risk environment. Recent research by the NSW Productivity Commission found 56 per cent of work across the NSW economy is not ‘remoteable’, and must be done on-site.

Recent analysis by SGS Economics and Planning explores rates of working from home by occupation prior to the pandemic. As shown in the chart below, white-collar workers work from home in far higher numbers. It also depicts the tension in who has the autonomy to work from home, with managers and professionals working remotely at higher rates than clerical and administrative workers. As discussed in this SGS article (which has been provided as a resource for local councils) the idea of remote working started gaining momentum in the 1990s, enabled by communications and technological advances. However, “a widespread culture of remote work was slow to take off, partly explained by management cultures that preference ‘line of sight’, and the appeal of face-to-face client, and business-to-business engagement”.

The shift to remote work during the COVID-19 pandemic: opportunities and challenges

Figure 1: WORK FROM HOME BY OCCUPATION 2015 to 2018

Source: SGS 2020, ABS 2018, Household Use of Information Technology 2016-2017 (2018 release) and 2014-2015 (2016 release) as in SGS (2020) Where are people working from home, and how could this reshape Australia’s cities and regions?

The slow transition to remote working pre-COVID-19 is captured in the NSW Innovation and Productivity Council’s recent research, which found that pre-pandemic, 63 per cent of NSW workers had the potential to work remotely one or more days a week, but only around 25 per cent did.

Looking forward, their research suggests remote working will remain 69 per cent above pre-COVID levels and 67 per cent of those surveyed expected to work from home more after COVID-19. More broadly, the research found that only 5 per cent of workers can do all of their tasks remotely, however half of workers could work remotely at least two days a week. The graph below shows the proportion of tasks that can be performed remotely by broad industry categories:

The shift to remote work during the COVID-19 pandemic: opportunities and challenges

Source: NSW Productivity Commission (2020) Our experience during COVID-19 and what it means for the future of work

Where are people working from home?

To understand the spatial implications of working from home, SGS mapped the locations where Australian residents regularly worked from home prior to COVID-19. The mapping shows the significant variance across our capital cities in who is working remotely, and provides a starting point to understand the locations where remote work may continue at scale in the future.

In all of Australia’s capital cities, the areas with the highest rates of working from home were typically inner areas near the CBD. This is likely to reflect the desire to be close to the workplace, despite being able to work from home at least some of the time. The report notes that “generally, the locations with the highest rates of accessing the internet for home based work regularly are also the locations that are seeing the highest house price values and rating low on indicators of rental affordability”.

This spatial view is particularly relevant when considering the impact of a shift to remote working on local economies. As discussed in this earlier briefing, many people shop and eat out in the city as part of their working day. If they are no longer accessing a CBD or another external locality, this spending is likely to be redirect to local centres.

This mapping is also useful when considering the speculation as to whether a longer-term shift to remote working will influence where people choose to live. The current preference of many higher-skilled workers living close to the CBD may well change if those workers no longer need regular access to the CBD for employment.

The long-term impacts on our cities and central business districts

There has been a great deal of speculation here and abroad on the long-term impacts of COVID-19 on our CBDs and cities.  In their recent paper: Cities in a Post-COVID World, Florida, Rodríguez-Pose and Storper ask if the shift to remote working will “create a fundamentally new geography of labor, a change that would have a massive effect on the fundamentals of economic geography and urban systems since 1980?

The authors identify four ‘forces’ that may have a long-lasting impact:

  • Social scarring.
  • The forced experiment for employment, shopping, workplace and residence choice, and commuting of the lockdown .
  • The need to secure the urban built environment against COVID-19, and future health and climate risks.
  • Changes to urban built form, real estate, design, and streetscapes.

Social scarring

Social scarring is the idea that fear of crowded spaces will have longer-term impacts on where people choose to live and travel, routine commuting patterns, and the economic viability of certain kinds of businesses and social gathering spaces. This could enable changes in housing choice, such as moving to the suburbs for more outdoor and indoor space, for remote work, and/or recreation or moving out of the city, enabled by the shift to remote working. As short-term evidence of this, Melbourne lost 5903 residents to regional Victoria in net terms in the May to June quarter, compared with 2610 for the same quarter last year. Whether this is a longer-term trend remains to be seen.

At the macro-geographic level, the authors question whether COVID-19 could undo the attraction of the city for its access to highly-skilled jobs. Cities have prospered due to the benefits of agglomeration, the idea that that firms located near to each other for mutual benefit of shared services and access to skilled workers. The authors raise the question: could the social scarring see large proportions of the population choose privacy and distance over access to high paid jobs? Or, will the shift to remote work be such that these workers truly can work from anywhere without the desire to access the perceived benefits offered by cities?

The forced experiment for employment, shopping, workplace and residence choice and commuting of the lockdown

The authors note that the COVID-19 response has proven that there “are radically different ways of living made possible by digital tools”. On the one hand, the technical supports have been pretty effective and showcased new ways of interacting, living and working. On the other, it is not yet clear the extent to which these technological solutions will either compliment or replace traditional ways of interacting. The authors surmise that “distanced interaction is not a full substitute” and the sight of many Melbournians eagerly returning to cafés, restaurants and retail as they are re-opened suggests that to be true.

The authors find that there is little evidence to suggest remote working can successfully create the networks and support the level of collaboration of in-person work but recognise that “we are still in a process of social, organization and personal learning, as well technology development”, and as such our ability to meet these needs remotely is likely to increase with learning over time.

Whatever the newfound balance of remote and in person work will be, it is suggested that creatives will still seek out the benefits offered by city offices, young people will still be attracted to cities for the professional and personal opportunities they offer, and many will still place a high value on frequent face-to-face interaction. “There is simply no replacing the advantages of agglomeration for establishing oneself in a knowledge or creative career and acquiring the reputation and networks to flourish there” (Florida et al, 2020)

The NSW Innovation and Productivity Council’s Remote Working Survey found that difficulty collaborating was the second biggest barrier to remote working, with “many remote workers also stated that their working relationships and on-the-job learning were negatively impacted. Many other surveys confirm that collaboration and communication are key challenges when working remotely (Buffer, 2020; Indeed, 2019; Smartsheet, 2020).” Lack of social connection, particularly ‘opportunities to socialise’, ranked as the worst aspect of remote work in the NSW Innovation and Productivity Council’s Remote Working Survey.

Research has shown that physical proximity and face-to-face interaction improve the development and diffusion of ideas in knowledge-intensive businesses (Cunningham & Werker, 2012 as in NSW Innovation and Productivity Council 2020). In trying to understand the impact of COVID-19 on collaboration, the generation of new ideas and in turn long term growth, “one estimate suggests that less interaction between Sydney CBD workers during the COVID-19 pandemic might cause a $3 billion hit to New South Wales’ productivity in 2020.” (Wade, 2020)

Productivity gains of remote work

The NSW Innovation and Productivity Council’s research found “those of us who can work remotely report being more productive when we do—by an average of 13 per cent”, and 53 per cent reported being more productive when working remotely. For businesses, increased remote working can offer lower office costs and other overhead costs. The Productivity Council adds that previous research has also highlighted remote working’s contributions to better recruitment, higher retention rates (McCrindle Research, 2013 as in NSW Innovation and Productivity Council 2020) and reduced absenteeism (Indeed, 2019 as in NSW Innovation and Productivity Council 2020).

The Productivity Council research found remote workers point to better work-life balance as one of the best aspects of remote work, finding that without the need to prepare and commute, the average NSW remote worker has an extra 1 hour and 17 minutes per day.

Commuting and remote work

Florida, Rodríguez-Pose and Storper note that “Even a partial shift to remote work could have a significant impact on mobility, transport, and real estate”. Remote and flexible working will likely see people avoid crowded public transport, with both car and public transport commuters likely to avoid driving at peak times. As workers are no longer required to commute daily, they may be willing to trade short commutes for the longer commutes associated with peri-urban or semi-rural living. “The convenience premium enjoyed by close-in city dwellers who have short, easy commutes is likely to evaporate for those who can always, or mostly, work from home”.

At the same time, the authors note that with remote working removing the need to commute, people may seek out those urban locations that are well-furnished with services and amenity, where they can meet all their needs in close proximity. This is echoed in the renewed interest in 20-minute neighbourhoods, as discussed in this earlier LGiU Australia briefing.

Recent Australian research by Beck and Hensher (2020) found that in the short term, the dramatic shift to working remotely has led to significant reductions in congestion. They suggest that in the longer term, a sustained increase in remote working could have “profound implications for road investment and transport policy”. Their research shows the current increase in working from home is spread evenly across the five weekdays. The authors note “this is important, since infrastructure and service capacity are typically determined by peak demand. If demand can be flattened, as the data suggest it can be, then the implications for transport planning priorities will be significant.” Even a shift of one or two days of remote working (for those that can) would deliver an improvement on pre-COVID congestion levels.

The need to secure the urban built environment against COVID-19, and future health and climate risks

The need to secure the built environment against health and climate risks has been brought to the fore by COVID-19. The public and private sector quickly took action to ensure public infrastructure, public-facing businesses, and places where people gather were able to meet social distancing and hygiene requirements. In the longer term, it is anticipated that this will see architects, designers, and planners to consider permanent interventions that respond to the threat of future pandemics and climate risks.

The costs of office space may increase as the ratio of workers able to work in a building is lowered. Similarly, retail costs will be impacted by the need for more space to sell fewer products. Suburban locations (which can offer more indoor and outdoor space) may become preferable to more congested CBD locations. The shift to online retail, accelerated by the pandemic, is discussed in more detail in this earlier LGIU Australia briefing.

Changes to urban built form, real estate, design, and streetscapes in response to COVID-19 may be retained in the long term. The already struggling urban retail economy has been significantly impacted by the COVID-19 lockdowns. Florida, Rodríguez-Pose and Storper suggest that “high streets may lose their actual commercial role, instead becoming amenity centers and window-shopping destinations, enticing shoppers to buy online”. Declining demand for office and co-working spaces could drive down rents create opportunities for resilient new entrepreneurs, and potentially see proposals for adaptive reuse, including a shift to residential uses. If this continues over the long term, the authors suggest that it could lead to significant reimagining of street fronting spaces to support flexible uses – including houses or live-in work spaces, along with buildings redesigned for health impacts and distancing in shared spaces.

The NSW Innovation and Productivity Council in considering the long-term implications for NSW, posited that “Sydney’s central business district (CBD) will remain the state’s employment hub, but offices could be reborn as spaces for collaboration and innovation”.


Remote working is predicted to continue in some form into the foreseeable future – COVID-19 has forced employers to test the concept, and has normalised the practice. The NSW Innovation and Productivity Council notes that while workers and employers are indicating that the balance of in-person and remote working may inevitably shift significantly, some commentators have urged caution: that old patterns will likely re-emerge, and that “the ‘death of the office’ is much exaggerated” (Cummins, 2020). Both the work of the Productivity Council and Florida et al (2020) suggest that the majority of workers will want a balance of remote and in-person working. What this hybrid model will look like will vary from workplace to workplace. As the NSW Innovation and Productivity Council notes “the challenge, once COVID-19 has passed, is this: to find a flexible mix of workspaces, policies and practices that caters to these preferences.”

While there may be those few workers who are able to work entirely remotely, and in turn, move to rural and regional areas, Florida et al (2020) predict the trends of the last 40 years will continue: that “the divides between prosperous cities and regions and struggling areas will remain, and possibly even widen”.

The long-term impact of a transition to a hybrid model of working on our cities and suburbs remains to be seen. Florida et al (2020) suggest that cities will retain their strength even if some activities shift beyond the CBD to suburban areas. These shifts may lead to a reimagining of our CBD and local centres, incorporating more flexible space and uses. At the local level, more people working from home may strengthen local centres.  It is connecting with this reimagining of CBDs and local centres where local governments will need to be heavily engaged not only to identify opportunities, but also to assist in the management of the impacts of any transition and other challenges due to changing trends in where work occurs.

For more information on this briefing contact LGiU Australia by emailing