Working from home and workplace flexibility
It is estimated that the proportion of workers who can work remotely is 47 per cent compared with 53 per cent who are unable to56. Many frontline health care workers, teachers, retail and salespeople or those in the transport, logistics and construction sectors continue to work from their workplace.
While working from home is different for each worker, for the average full-time worker working from home increased from 0.9 days per week to 2.1 days per week in the wake of the pandemic57. Private and public sector businesses are now considering how they can be more flexible, with some private businesses already committing to flexible workplaces.
A global survey by Gartner CFO indicates corporate support for working from home where 74 per cent of companies surveyed plan to permanently shift at least five per cent of their workforce from the office to permanently working remotely58.
In 2016, only 4.3 per cent of workers worked from home on the day of the Census59. Of those working from home, 50 per cent were knowledge and professional service workers. The concentration of these jobs varies across Greater Sydney. The Eastern Harbour City has the highest proportion of resident population in knowledge jobs at 37 per cent, followed by the Central River City with 29 per cent and the Western Parkland City with 23 per cent60.
There will be impacts in terms of office space, particularly in the Harbour CBD, which normally accommodates 500,000 workers61. It will take some time for businesses to recalibrate demand for office space as working remotely continues.
Subdued activity in CBD hubs
The changes in where and how people work will have knock-on impacts on many other aspects of city life. Transport for NSW estimates that in June 2020, the number of unique visitors to Sydney CBD was close to a third of June 2019 levels62.
Office vacancy rates increased across CBD hubs from January 2020 to July 2020, with the greatest increase in Chatswood (refer Figure 2). The office market typically works in cycles and in early 2020, Greater Sydney had some of the lowest vacancy rates (four per cent) of commercial office space compared to rates across Australia (average eight per cent), meaning the COVID-19-related impacts came at the peak of the market cycle63.
Figure 2: Office market vacancy rates, July 2020 (%)64
Our consultation with State agencies identified opportunities to support a revitalised Sydney CBD and other centres such as a return to the office for collaborative work, multifaceted use of commercial office space and growing the city's night-time economy through COVID-safe transport connections.
More activity in local centres
The increase in people working from home means more people are accessing services in local centres. The increase in consumer spend in local centres since the pandemic began is greater than in strategic and metropolitan centres (refer Figure 3). This highlights the importance of vibrant local centres and high streets.
The Pulse of Greater Sydney 2019 shows that 96 per cent of the population lives within 30 minutes by public transport of a metropolitan and strategic centre65. However, access to local centres, measured by a 10-minute walk, is uneven, with higher levels of access in the Eastern Harbour City compared to the Western Parkland City.
If high levels of working from home continue, there could be more people spending more money and time in their local area. People value the time they save by not commuting and many use that time for leisure. A further component of the increased consumer spending in local communities is the increase in deliveries to the home for food and online purchases.
For others, however, working from home may exacerbate a sense of isolation. Research indicates many workers build social connections at work and the social aspects of face-to-face work can be critical to performance in some industries. This highlights the importance of agglomeration, where a co-location of skills, services, markets and knowledge can generate social and economic benefits.
To optimise the benefits of people working from home, such as increased local spending and more leisure time, businesses would need greater investment in technology to support remote working.
Figure 3: Average growth in retail across local and metro/strategic centres66
Working from home and housing choice
An enduring increase in people working from home, could give more people choice in where to live, such as further from their place of work. While data is yet to show definitive trends, this could see more people enjoying the lifestyle benefits associated with living further away from city centres or in regional communities.
Any changes in housing preferences would influence the supply and demand for more diverse housing in Greater Sydney and across NSW.
Flexible locations for work have increased rapidly and there are indications that a portion of this increase may continue. This would lead to the revitalisation of local centres and an evolving role for CBDs. It may also mean that people who can work flexibly have a greater choice in where they live.