Does remote work lead to higher revenue growth for companies?

I typically write each edition of Forbes Edge from the comfort of my home office, with my cats, Ziggy and Spike, by my side along with a steaming hot cup of tea. So yeah, I fully enjoy the perks of working remotely. 

I don’t deny that working in an office has its benefits, though. I do miss having non-feline coworkers to chat with in-person, and a fully stocked snack room always hits the spot during a long workday. 

For CEOs, the question of whether to employ fully remote, hybrid, or 100% in-office workers will continue to be a matter of debate. This week, we have a look at one study that the big bosses will definitely want to take a look at. The report, released by Scoop, indicates that companies with more flexible work arrangements have outperformed more restrictive companies in terms of revenue growth over the past three years. 

Read on below for how Scoop carried out the study, then stick around for an interview with Drybar founder Alli Webb, as well as a cornucopia of articles that will help you find success this week, from using ChatGPT to help with your résumé to tips for navigating a layoff.

I hope you have a relaxing Thanksgiving holiday, and I’ll be back next week with more career advice and insight in the next edition of Forbes Edge.

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Featured story of the week: Companies with flexible remote work policies outperform on revenue growth

The debate over return-to-office vs. work-from-home policies is likely to continue for years to come. After the Covid-19 pandemic forced many of us to rearrange our homes to maximize our workspace productivity, many CEOs believe it’s time to call workers back to their old desks.

But a new study argues that remote work could lead to something bosses won’t be able to ignore: higher revenue growth.

The report released last week by Scoop, a hybrid work management startup, includes an analysis of remote work policies and revenue growth at 554 public companies. It found that the average public company that gives employees flexibility on whether to come into the office outperformed on revenue growth over the past three years by 16 percentage points, compared to companies with more restrictive policies.

“That gap was really surprising to us—and larger than expected,” says Rob Sadow, CEO and cofounder of Scoop. The analysis tracked revenue growth between 2020 and 2022, first normalizing the data for industry performance to eliminate differences between high- and low-growth sectors.

The report shows that the three-year industry-adjusted revenue growth rate of companies that have what Scoop calls a “fully flexible” policy—meaning they allow employees or teams to choose when or whether they come to the office, or are fully remote—is 21%. 

Companies in the data set with more restrictive policies—say, those that have corporate mandates for a couple days per week or those that require full-time work in the office—had only a 5% industry-adjusted revenue growth rate, the analysis found. When excluding the tech industry over the same period, public companies that were “fully flexible” outperformed by 13 percentage points.

Debbie Lovich, a senior partner at Boston Consulting Group focused on the future of work, says the report doesn’t yet show that flexible policies cause higher revenue growth. Rather, she says flexible policies are one likely “symptom” of a culture that trusts workers, has other employee-friendly benefits and values forward-thinking strategies, technology and ideas. 

In Her Words: “If they’re less restrictive on [remote] work policies, they’re probably more pro-innovation, more purposeful and more engaging. … I doubt those companies would be taking attendance and measuring badge swipes,” says Lovich.

Sadow thinks that even if the results don’t show a causal relationship, they do help counter an increasingly common argument. “The argument a lot of execs and board members have is they believe companies that offer flexibility are going to underperform because they’re not together,” he says. “That they’re not going to allow for water cooler conversations and relationships to develop. The data suggests not only is that not true in terms of underperformance, but you might actually outperform.”

Read the full story from Forbes’ Jena McGregor for more information on this study.

Driving success: From Stay-At-Home Mom To Multimillion Dollar Businesswoman: Meet Drybar's Founder, Alli Webb

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• Is OpenAI 'Dead To Businesses Building With It'? Altman Ouster Has Customers Seeking Alternatives
• More Than 700 OpenAI Employees Threaten To Quit—And Join Microsoft—Unless Board Resigns
• 8 Simple Steps To Help You Navigate A Layoff
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Thank you for reading! We'll be next week with another edition of Forbes Edge. 

This edition of Forbes Edge was written and curated by associate editor Chris Dobstaff.