To date much of the research on remote work has focused on its effects on jobs, productivity, and employees. Less clear is which firms are likely to adopt this novel, though contentious, organizational practice. We take a strategic perspective and argue that remote work may be viewed as a complex compensating differential, offering benefits to employees but at the expense of heightened organizational complexity. We argue that firms in competitively weaker labor market positions are more likely to offer remote friendly jobs to attract employees who might otherwise not be interested or not affordable. We examine this using proprietary data from a leading hiring platform for technology startups. Supporting our arguments, we find that startups that have raised fewer rounds of funding and have fewer employees are more likely to pursue employees working remotely. We also find that the salary ranges for remote friendly positions are on average lower. Overall, we contribute a more strategic perspective to the growing literature on remote work, while also highlighting how startups and other disadvantaged firms may use such complex compensating differentials as a strategic tool.
