Australia is on the brink of a wellbeing recession

Lockdowns and border closures may (hopefully) be a thing of the past, but the legacy of COVID looms large over our ways of working. One of the lasting impacts of COVID is that many Australians are working more hours and feeling more burnt out than before the pandemic.

We surveyed more than 2000 Australian workers as part of a joint Deloitte and Swinburne University of Technology study, and we found that one in three people are working more hours since the pandemic. Many are also working outside their “standard” hours.

Remarkably, more than 90 per cent of workers now say their physical and mental wellbeing is just as important as their pay – and that’s during a cost-of-living crisis. Simply put, Australia is in danger of tipping into a wellbeing recession.

The good news is that this wellbeing recession can be avoided. But we must act now and truly embrace one of the most revolutionary workplace innovations of the COVID era: flexible working.

“Flexwork” is a key enabler of wellbeing through better work-life balance. Having choice about both where and when we work is not just a nice-to-have: it has become a must-have.

For more than two in five workers – both those working onsite and those working remotely – flexibility is more important than a pay rise, as it promotes benefits like better mental health. Almost two in three said they’d forgo a pay rise to lock in flexible working arrangements.

Australian workers are at risk of burnout and demand better wellbeing outcomes.

There are four implications for employers arising from flexible working. The first is that a failure to offer genuinely flexible working options could make it harder to attract and retain talent in what is already a very tight labour market. Pay, learning opportunities and career progression are still important. But flexible work options are non-negotiable.

Second, there is the potential of a flexibility divide emerging in companies across Australia. On one side are workers who can do their job remotely and are empowered to work from home. On the other side are onsite workers – whose jobs are location-dependent – yet want more flexibility as well, such as the ability to set their own hours. They may increasingly look to other jobs to gain the flexibility others enjoy.

The third implication for employers is that the full benefits of flexible work may not be realised unless it is formalised in workplace policies, employee contracts or enterprise agreements. A failure to formalise policy also presents wage compliance and health and safety risks.

Not only are remote workers more likely to work more than a full-time week than their onsite counterparts, almost a quarter of them told us they worked outside of standard hours every day. Worryingly, 28 per cent of flexible workers said they weren’t compensated for working these non-standard hours through overtime, time off in lieu, or through a salary agreement.

While workload was the lead reason for working early mornings or late into the evening, encouragingly, some workers are choosing to work during these times. This indicates some workers are doing life activities during the day – going to the gym, caring responsibilities – and realising the work-life balance benefits of flexible work.

Finally, we suspect that much work being done out of hours is not being tracked or recorded by employers. Not only is there a risk to employee wellbeing – especially when paired with longer hours overall – but it also suggests that many workers may be underpaid.

Australia’s workplace relations laws were not created with flexible work in mind, and do not distinguish the reason an employee might work non-standard hours. Employers are responsible for having systems that pay their employees correctly. Deloitte’s wage remediation experience suggests that underpayments are commonly caused by employees not being paid for all the hours they work.

Our research suggests that workers covered by an enterprise agreement (EA), tailored to the workplace, are more likely to have choice over where and when they work, be willing to forgo a percentage of that pay to achieve that flexibility, and be working for an employer with a formal remote working policy.

Enterprise bargaining can be a laborious process and has been in decline. But we must get this right, and these survey results suggest employers might need to reconsider the option of bargaining to facilitate more flexibility for their employees while managing compliance risks.

Australian workers are at risk of burnout and demand better wellbeingoutcomes.

Flexible work is the remedy that can be codified into employment agreements. Wellbeing cannot.

Natalie James is a Deloitte Australia Partner, leader of its Workplace Integrity Practice, Adjunct Professor at Swinburne University of Technology, and former Fair Work Ombudsman. Sean Gallagher is Director of the Centre for the New Workforce, Swinburne University of Technology. 

This opinion piece was originally published in The Age.