A Double-Edged Sword: Digitalization of Listed Companies and Employee Overtime

Why It Matters

The research uncovers hidden labor costs of digital transformation, signaling that investors and policymakers must weigh productivity gains against employee well‑being.

Key Takeaways

• Digitalization increases employee overtime hours.
• Overtime driven by market expansion and innovation mechanisms.
• Higher revenue and wages partially compensate overtime.
• Pro‑digital corporate attitudes mitigate overtime growth.
• Balancing efficiency with worker rights ensures sustainable transformation.

Pulse Analysis

Digitalization has become a cornerstone of corporate strategy, promising faster processes, broader market reach, and data‑driven decision‑making. Researchers now leverage unconventional metrics—like nighttime satellite illumination—to gauge a firm’s digital footprint, offering a macro‑level view that sidesteps self‑reported biases. This novel approach provides a clearer picture of how pervasive technology adoption reshapes operational intensity across entire industries, especially among publicly listed companies that are often at the forefront of innovation.

The study’s findings reveal a double‑edged sword: as firms digitize, employees log more overtime, driven primarily by two mechanisms. First, market expansion enabled by digital platforms pushes firms to meet heightened demand, extending work hours. Second, rapid technological innovation accelerates product cycles, compelling staff to adapt and implement new systems quickly. However, the same digital push lifts overall revenue and raises average wages, delivering a modest compensation buffer for the extra hours. Notably, firms that cultivate a proactive, supportive attitude toward digital tools—providing training and clear expectations—can blunt the overtime effect, suggesting that corporate culture plays a pivotal role in moderating labor impacts.

For executives, investors, and regulators, these insights stress the need for balanced digital strategies. Companies should pair efficiency‑driven technologies with robust workforce policies, such as flexible scheduling, transparent overtime compensation, and continuous skill development. Investors may factor labor sustainability into valuation models, while policymakers could consider guidelines that protect workers amid rapid tech adoption. Ultimately, aligning digital ambition with employee well‑being will determine whether transformation yields lasting competitive advantage or fuels burnout cycles.