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The latest report examined the “productivity bubble,” a period during which labor productivity increased as a result of the COVID-19 pandemic from January 2020 to March 2022, alongside the reasons for its eventual decline.
“The COVID-19 pandemic was a tumultuous time for productivity, but we have returned to a period of stagnant status quo,” stated commission deputy chair Dr. Alex Robson.
The findings revealed productivity grew during this period since the industries most adversely affected, like accommodation and food services, typically had the lowest labor productivity.
This meant the workforce by default shifted to have an emphasis on more productive sectors.
Productivity experienced more genuine growth from December 2020 to March 2022, as worker output improved and the labour market began to recover.
But it’s the phase after that – the “productivity loss” phase between June 2022 and June 2023 – which the report was built around.
It found that the investment in equipment, tools and resources needed to get the most out of work didn’t keep pace with the increase in hours worked post-lockdowns.
People were working longer hours, but with less support to help their productivity.
Also, many younger and less experienced people joined the workforce after years in and out of lockdown and shrinking employment.
But working from home was not among the report’s culprits for lost productivity.
While it found research suggested fully remote working with no in-person interaction could make people less productive, the report also found hybrid models helped boost job satisfaction, worker retention, and potentially productivity.
Working from home “all or most days” of the week has also tripled around the country from the start of the pandemic (12 per cent) to August 2024 (36 per cent).
The report did note that less experienced and younger workers may benefit from more in-person work.
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“However, given most studies find hybrid work to be either neutral or positive for labour productivity, there is no evidence to suggests that the trend towards hybrid working has contributed to the productivity loss phase of the productivity bubble,” the report said.
Robson said the “big lesson” of the burst productivity bubble was that there were “no shortcuts” to growing productivity.
‘Tackling our productivity problem will require dedicated effort and reform from business and government,” he said.
The commission will pass the results of five inquiries into the issue to the government this year.
