WFH workers saving $5308 a year on reduced commutes

Australians who worked from home since the Covid pandemic have cut their commute times by 3.4 hours a week, a time saving worth an estimated $5308 a year.

People who work solely from home were able to work nearly 20 per cent more hours than those who do not work from home,

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Australians who worked from home since the Covid pandemic have cut their commute times by 3.4 hours a week, a time saving worth an estimated $5308 a year based on average wages, new research has found.

The analysis by the Committee for Economic Development of Australia found people who worked solely from home were able to work nearly 20 per cent more hours than those who do not work from home, while workforce participation, compared to the pre-Covid trend, rose by 4.4 per cent.

CEDA economist James Brooks said the findings confirmed what many Australians have experienced since the pandemic.

“Workers are saving time and money on their commute, and in many cases are also able to work more hours or even get a job, where they couldn’t do so before,” Mr Brooks said.

The release of the findings, just days from the federal election, will be seized on by Labor and the union movement to again attack the Coalition over its embarrassing working from home policy backflip during the campaign.

The CEDA analysis of data from the Household Income and Labour Dynamics in Australia survey found people who work from home spent on average 3.4 hours or 15.7 per cent less time commuting each week than if they worked the same number of hours from the office.

“Commuting less brings savings on public transport fares and fuel costs, but there’s also savings on time,” Mr Brooks said.

“We value that at $110 per week or $5308 for a 48-week working year, using the average hourly wage of Australians who work from home. This is 21 per cent higher than the approximately $4400 we have previously found Australians are foregoing in wages by working from home.

“In other words, what they might be losing in wages, they are gaining in reduced commute time.”

According to the research, workers who do all their hours from home work nearly 20 per cent more hours per week compared with people who do not work from home. People who work from home half of the time work just over nine per cent more hours per week.

“This can be due to a range of factors such as being able to add an extra day of work, using the time gained to get more work done, cost-of-living pressures and the strong labour market,” Mr Brooks said.

Previous CEDA research had found mothers of young children, primary carers and people with an impactful health condition had increased their participation in jobs that can be done from home since the pandemic.

Mr Brooks said the new analysis confirmed that mothers of a child aged under four, and those with impactful health conditions, were now more likely to have a job. “This suggests groups that had previously faced barriers to on-site work are more likely to have a job now because they can work from home,” he said.

He said the jobs market had been “surprisingly strong” since the pandemic driven by factors

including worker shortages, cost-of-living pressures, changes to childcare subsidies, as well as working from home.

CEDA also modelled how participation would have changed from the period between 2017 and 2019 to 2023 if Covid had not happened, and how the rate actually changed over that period.

Participation was 4.4 per cent higher in 2023 than it would have been if the pre-Covid trend had continued.

While WFH made a clear contribution, Mr Brooks said it was hard to definitively state how much it had directly caused. Continued focus is also required on management skills and strategies to optimise employee engagement, mental health and productivity as work from home arrangements continue to evolve, he said.

“Five years on from the pandemic, more than one-third Australians still regularly work from home, including approximately 60 per cent of professionals and managers,” Mr Brooks said.

“Given the broad economic and social benefits of the working-from-home shift, we should look to maintain these gains, even as the labour market softens.”