Work from home tipped to stay despite weaker labour market

New data from online employment giant Seek suggests flexible working conditions are likely to remain even as the labour market cools this year, but it may get more difficult for junior jobseekers expecting to be able to work from home.

The number of people employed fell by a worse-than-expected 65,100 in December, the ABS said last week, and economists expect the labour market to soften this year, which could shift the balance of power towards employers.

The expected weakening in the labour market comes as many big businesses last year raised the pressure on staff to return to offices, with Origin Energy, ANZ Bank and Suncorp linking bonuses to physical attendance at the workplace.

The cooling labour market could make it harder for young aspiring workers looking to work from home.

Data from job site Seek shows the proportion of job ads that included flexible working conditions or indicated the role could be done from home peaked last April at 11 per cent, and has since fallen to 9.4 per cent in December. This is still much higher than the proportion of job ads that said roles could be performed from home before COVID-19.

SEEK’s senior economist Matt Cowgill said the proportion of jobs advertised with flexible conditions may continue to fall as the market weakens, but he expected flexible working conditions to remain in some form.

He also said it was likely employers would become more choosy in demanding more experienced staff, which could make it harder for those seeking entry-level positions.

“For job-seekers trying to enter the market it’s likely it will become harder. If the market keeps getting cooler I would also expect the number of employers happy for their employees to work from home to continue to reduce,” Cowgill said.

A report from Deloitte Access Economics last year also predicted that employers may push to exert more influence over “workplace norms” in 2024, but it said this would not spell the end of flexible working.

“While we are yet to see how much the bargaining power will shift, more flexible working practices are here to stay to some extent,” the Deloitte report said.

Cowgill said the industry with the highest reduction in jobs offering flexible working arrangements was human resources and recruitment, while other white-collar sectors including consulting have remained far closer to the April peak.

There are far fewer white-collar jobs available than there were this time last year, with the finance, IT and media sectors experiencing the biggest falls.

The number of job advertisements in hospitality and tourism has increased since this time last year, but employment conditions in the sector remain uncertain because it is still adjusting to long-term changes caused by the COVID-19 pandemic.

APAC economist at another jobs site Indeed, Callum Pickering, pointed to a big fall in the participation rate – the share of the population who are in jobs or looking for work – during December. Pickering said the figure had been volatile in recent months, and said overall the labour market appeared to be in good shape.

“It appears as though seasonal hiring patterns have shifted, which has led to stronger-than-anticipated employment growth in both October and November and weaker-than-expected growth in December. View these months collectively though and it becomes apparent that the labour market is still performing very well.”

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