Study: Companies Equipped for Remote Work Perform Significantly Better Than Those Who Are Not

Home office

According to an MIT research paper by Sebastian Steffen and other co-authors, companies with established strong work-from-home capabilities performed far better than those without. The study evaluated the effects of the pandemic based on how firms were prepared to handle remote work.

In the study, they paired a University of Chicago report that ranked how effectively different types of jobs could be performed from home with a dataset of roughly 200 million job postings provided by Lightcast (formerly EMSI-Burning Glass). They evaluated data on individual firms’ sales, income, and financial returns. 

The results? Companies that were well-equipped to manage remote work before the pandemic had a better financial performance between the first quartered of 2019 and the third quarter of 2020 compared to poorly equipped companies. Net income was almost 15% higher, sales were 4%, and market performance was better.

Steffen highlighted that they separated companies by sector to make comparisons fair:

“We weren´t comparing a manufacturing firm to firm in the financial sector because we know the financial sector is much more adaptable to remote work. Instead, we compare apples to apples within narrowly defined industries.” 

Secondary results from the study found out that the pandemic seemed to accelerate market concentration by pushing firms that were already ahead technologically even further ahead.

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