Four-day week becomes reality

It could be a worker’s dream and a manager’s nightmare, but the concept of a four-day week is moving high up the boardroom agenda. Crucially, however, this is not about reducing working hours with an equal reduction of pay; it is about improving productivity and working practices so that the same amount is achieved in less time but for the same salary.

Now, as organisations come to terms with a very different working world as a result of the global pandemic, businesses are being invited to join a study organised by 4 Day Week Global across the UK, Ireland, the US, Canada, Australia and New Zealand.

‘Pre-Covid, there were organisations that considered the four-day week and abandoned it, but it is a concept that is now definitely being discussed and explored, even at FTSE 100 level,’ says Alastair Woods, a partner in PwC’s People and Organisation practice in the UK.

‘It started with tech companies and start-ups, where they have a greater degree of flexibility and tend to have a more empowered workforce focused on outputs. But for other sectors, such as retailers, consumer businesses or professional services with rosters and customers with an expected level of service, it becomes harder.’

The right balance

To make it work, organisations need to think in terms of a 100:80:100 ratio: 100% of the work completed in 80% of the previous time, but for 100% of the reward. A number of studies have been carried out recently to see whether such a ratio can work in practice.

In 2018, Perpetual Guardian, a corporate trustee company based in New Zealand, carried out a trial where staff worked 30 hours a week but were paid for 37.5 hours while being asked to deliver the same outputs.

The study revealed that job performance was maintained, staff stress levels were lowered and work/life balance improved significantly. There was also a measurable increase in team engagement levels.

Between 2015 and 2019, Iceland experimented with two large-scale trials of shorter working hours, in which public sector workers moved from a 40 hours to a 35- or 36-hour week without reduced pay. The results found that participating workers took on fewer hours and enjoyed greater wellbeing, improved work-life balance and a better cooperative spirit in the workplace, all while maintaining existing standards of performance and productivity. The trials also remained revenue neutral.

As a result, by June 2021, 86% of Iceland’s working population were on contracts that have either moved them to shorter working hours or give them the right to do so in the future.

And in 2022, in a variation on the theme, Belgian employees are now able to work a four-day week, but workers need to work up to 10 hours a day instead of a maximum of eight hours in order to work one day less a week for the same pay. The argument here is more about flexibility than actual time worked.

Retention tool

Talking about the UK pilot, Richard Jeffery, CEO at ActiveOps, a management process automation company, says: ‘The trial is an important milestone. Working fewer hours can lead to an increase in productivity levels. By spending more time away from their workplace, employees can avoid burnout. Consequently, the time they do spend at work will be more fulfilling.’

Jeffery adds that organisations that create a better environment for their team members’ wellbeing will see additional business benefits beyond productivity, such as a high retention rate, which lowers recruitment costs.

‘It’s no secret that investing in your employees’ health and wellbeing can reduce sickness rates, improve work motivation and encourage a better sense of team morale,’ he says.

But he warns that businesses need to be aware that a four-day week will only improve productivity if appropriately managed. ‘Business leaders must focus on the wellbeing of teams through real-time performance measurement,’ he says.

Results orientated

Woods agrees. ‘Rather than measuring inputs, there is a shift towards outcomes. It is about the rethinking of performance management and looking at how we help people to succeed more.’ He is seeing more investment in manager capabilities, where team coach positions are being created to ensure that the maximum benefit is gained from flexible working arrangements.

Jeffery adds: ‘There will be a growing need to reskill managers to support the four-day working week. Managers need support to align and deploy their front lines. This will mean equipping them with the right tools, processes and skills to train and certify managers.’

Ultimately, much will come down to flexibility and choice. As Woods says: ‘Businesses are being pushed to be more flexible and agile, while people will want different things. But customisation of employee benefits and working patterns can unlock productivity, so we need to think about what works for individuals.’