You might be wondering if it’s worthwhile looking for remote work stocks as an investment strategy in the long term, given how we’ve seen a significant rise in remote work opportunities over the past few years. Now that the COVID-19 pandemic accelerated the move to working from home in many industries, this question is becoming more urgent than ever.
It’s safe to say that remote work is here to stay. Therefore, as investors, we should be looking for companies that will capitalize on this trend. Given the potential growth of remote work in the future, what companies out there provide the best services at this time? What are some remote work stocks worth considering for investment?
But first, let’s look at what data has to say about trends in working from home and whether this trend is bound to continue in the long term.
Remote Work Is a Growing Trend
The expectation is that remote work will continue to increase in popularity:
By 2025, an estimated 70% of the workforce will work remotely at least five days in a month.
As reported by FYI
In the near future, more companies will be willing to enable remote work:
43% of US employers said they plan to allow their employees to have more remote working opportunities in the next year.
As reported by FYI
As we’ve seen with the Coronavirus, remote work can be a great solution to keeping businesses working through turbulent times and minimizing disruption.
Furthermore, a lot of great books have been written on this subject. Basecamp’s founders have been particularly vocal about the benefits of remote work and have written one of my favorite books on this subject.
This trend opens up the need to have better tools to support remote workers. If we look at white-collar workers, they need access to tools and services in many areas to work remotely successfully. They need productivity tools, communication tools, project management tools, cloud storage solutions, cloud-based identity providers, cloud-based HR tools, and much, much more.
Benefits of Remote Work
If you’re not yet convinced that remote work is sustainable, let’s go over some recent statistics on its benefits to businesses and employees alike. Hopefully, this will convince you that this is a trend worth keeping an eye on.
Employee Retention
There are three key reasons people feel happier when working remotely: flexibility, no commute, and increased productivity. If employers can guarantee that, employees will stay with the company for longer than they would otherwise:
Remote workers are 13% more likely than on-site workers to say that they will stay in their current job for the next 5 years.
As reported by FYI’s remote work statistics
In a different survey, we see similar results:
54% of US companies surveyed said they offer their employees remote work to increase employee retention.
As reported by FYI’s remote work statistics
And this all results in happier employees:
Remote workers are happiest when they spend more than 76% of their time working remotely.
As seen in Buffer’s State of Remote Work report in 2020
Talent
When looking for talent, it’s no longer viable to stick to certain locations. Talent is global, so companies must adapt to it. Thus, hiring managers increasingly look at skill over location:
Managers favor skills over being in the office together. Two times as many hiring managers cite employees having the right skills as being more important than working in the same location as the rest of the team.
As reported by FYI’s remote work statistics
Productivity
There are a number of studies supporting this thesis: remote workers are more productive.
Employers of companies with remote policies believe that remote makes workers more productive. 72% of companies with remote work policies believe that remote work makes workers more productive.
As reported by FYI’s remote work statistics
Employees also feel the same too:
When asked “would you like to work remotely, at least some of the time, for the rest of your career?” 99% said they would.
As reported by FYI’s remote work statistics
Costs
It is also possible for companies to reduce fixed costs by allowing employees to work remotely:
Dell’s flexible program has saved it an average of $12 million annually since 2014 due to reduced office space requirements.
As reported by FYI’s remote work statistics
Remote Work Stocks for the Next Decade
By now, you should be convinced that remote work will become an even bigger part of our society in the future. This means that the demand for remote working tools will be even higher than it is now.
What remote work stocks will make the most out of this transition? Let’s look at some public companies whose services and products cater to remote workers.
Zoom (ZM)
Zoom is a video-first communication platform. It enables remote video, voice, chat, and content-charing between people. It’s one of the best communication platforms out there, and it ranks number 1 in customer reviews.
Slack (CRM)
Slack provides real-time collaboration applications and platforms. It provides engineering, sales, marketing, IT, project management and human resources solutions. It’s basically an ecosystem of applications centered around its chat platform, meant to replace email.
Dropbox (DBX)
At its core, Dropbox provides cloud storage. However, there’s a lot more to it than just file storage solutions. Dropbox is a collaboration platform that’s transforming the way people and teams work together. It allows people to work and collaborate on files stored in the cloud seamlessly.
Box (BOX)
Box is a platform for secure content management, workflow, and collaboration. It enables organizations to securely manage enterprise content while allowing easy, secure access and sharing of this content from anywhere, on any device.
Atlassian (TEAM)
There are many services and tools provided by Atlassian, that are at the core of many teams working remotely. They own products like:
- Jira for project management;
- Confluence for team documentation;
- Trello for team collaboration;
- Bitbucket for engineering teams to host and collaborate on their software;
- and many others.
Microsoft (MSFT)
Even though it’s not at the core of Microsoft’s value proposition, it does offer great tools for remote workers. Examples of those tools are Teams, Office 365, GitHub for engineering teams and Skype for video and voice calls.
Google (GOOGL)
Similarly to Microsoft, Google does have a few important tools for remote workers. Amongst the most important ones are Google Hangouts for video communication, Google Drive for cloud storage and Google Docs for document collaboration.
Adobe (ADBE)
The digital media segment at Adobe offers lots of cloud-based tools in the design and photography space. Tools such as Photoshop and Illustrator are very popular and enable remote collaboration.
Okta (OKTA)
Okta provides an enterprise-grade identity management service that enables cloud-based single sign-on and multi-factor authentication for employees. This way, there’s no need to rely on private networks in order to protect internal systems.
Cisco (CSCO)
Cisco Systems designs and sells technologies across networking, security, collaboration applications, and the cloud. Among their products is WebEx, which is an enterprise solution for video conferencing, online meetings, screen share, and webinars.
DocuSign (DOCU)
DocuSign automates manual, paper-based processes allowing users to manage all aspects of documented business transactions include identity management, authentication, digital signature, forms and data collection, collaboration, workflow automation, and storage.
Private Companies to Keep an Eye On
Remote work is still a relatively new trend. That means there are still a lot of privately owned, venture-backed companies out there creating great products for remote workers.
Not all of those companies will want to go public, but some might become remote work stocks. Therefore, it’s important to keep an eye on them in case they will in the future.
Some might offer a chance for early-stage investing via equity crowdfunding campaigns or private equity funds. Take a look at those options if you like early-stage investing.
Here is a small list of potential remote work stocks to take into account once their stock becomes available:
- Whereby, which also provides an easy to use video communication system;
- Evernote, a note-taking app that works on multiple devices;
- Notion, a popular all-in-one workspace for teams to collaborate;
- Todoist, a great task management system that focuses on clarity and calmness;
- Basecamp, one of the best project management tools out there.
There are many other tools and services out there, but I think those are worth mentioning, given they are industry-agnostic and therefore more likely to be used by more people.
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Conclusion
I hope this blog post gives you something to think about.
In the next 5 to 10 years, remote work will play a crucial role in how we work. Therefore, I think it’s a great opportunity to consider buying remote work stocks that will be the key enablers of remote work in the future.
