New study finds that companies with work-from-home options are more likely to enjoy higher stock prices
A study by financial experts found that companies that ranked highly for flexible working arrangements, including telecommuting, saw their stock prices rise at a higher rate than their industry peers, highlighting another benefit of flexible working arrangements.
Does the Stock Market Fully Value Alternative Work Arrangements? Work From Home and Equity Prices
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WFH-flexible companies have higher stock returns, new study reveals | Fortune
https://fortune.com/2024/10/30/work-from-home-rto-debate-better-stock-returns/
Gabriele Lattanzio of the University of Melbourne tracked the stock prices of companies that made it onto the list of the 100 best companies for remote work published by FlexJobs, a job search site that lists companies that offer flexible working hours or work-from-home options.
As a result, it was found that companies on the list tend to achieve sales that exceed analyst expectations and report favorable financial results that betray market expectations more than competitors of the same size and industry. Since such trends are generally a factor in rising stock prices, Lattanzio concluded, 'This study is the first to demonstrate that a company's reliance on flextime is associated with long-term stock price returns.'
Since 2019, the COVID-19 pandemic has led to an increase in the number of companies, primarily technology companies such as Amazon and Apple, moving to remote work systems. However, some companies have begun to return to in-person work after the spread of the virus subsided.
Amazon changes policy to '5 days a week in the office' - GIGAZINE
Mark Ma, an associate professor at the University of Pittsburgh who studies the relationship between remote work and corporate performance, conducted a similar survey to Lattanzio, and pointed out, 'Companies like Nike and UPS that switched from remote work to working in the office four or five days a week have lower profitability than their competitors like Adidas and FedEx after the switch. I believe this difference in performance is because companies with strict policies are losing talent to competitors, or because the introduction of mandatory attendance has lowered employee morale and led to poor performance.' He said that as more research linking remote work and stocks emerge, he is likely to encourage management to switch to more flexible working styles.
A survey of the top 100 executives at companies with annual sales of $500 million (approximately 76 billion yen) by consulting firm KPMG also revealed that three in ten CEOs are considering introducing a four-day work week or a four-and-a-half-day work week. Furthermore, research firm Gartner reports that roughly 70% of job seekers rank a four-day work week without impacting pay as the top perk they are looking for. Work styles have been gradually changing in recent years.
The four-day work week may become established sooner than you think - GIGAZINE
'Flexible working has a positive impact on stock prices in both the short and long term as companies respond positively to their reputation for offering flexible working,' Lattanzio said.
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