Corporate Flexibility in a Time of Crisis

We survey CFOs throughout the COVID-19 crisis to learn how multiple dimensions of corporate flexibility affect their short- and long-term business plans. We find that i) workplace flexibility, namely the ability for employees to work remotely, plays a central role in modulating firms’ employment plans during the health crisis; ii) investment flexibility allows firms to increase or decrease capital spending based on their business prospects in the crisis, with effects shaped by workplace flexibility; and iii) financial flexibility contributes to stronger employment and investment, with effects shaped by the firm’s cost structure. While the role of workplace flexibility is new to the COVID crisis, CFOs expect lasting effects on employment and investment as low workplace flexibility firms adopt automation to replace labor