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Could a 4-Day Workweek Really Work?

Posted on 25th February 2020 by Alisa Wilson

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There will be six long weekends this year unless you work for New Zealand financial services firm, Perpetual Guardian. In that case, you will have a lot more.

After Andrew Barnes discovered that his 240 employees were only productive for one and a half to three hours of a typical eight-hour workday, he set out to find a way to get that time back without damaging productivity. And he did – in the form of a four-day workweek.

The question remains though, how viable is a four-day workweek for most employers?

What benefits are there in reduced working?

There is no question that Perpetual Guardian benefited as a result of permanently introducing a four-day work-week. Barnes did not just gift everyone with a day off though. His policy is to pay for five days but let them work for four. His decision led to a 6% increase in productivity, a 13% increase in profitability and a significant increase in employee engagement.

Research from the University of Auckland and University of Technology found that the Perpetual Guardian’s employees also benefited from the trial:

“The results show that employees’ perceptions of support changed across the trial. Employees felt that the four-day week (with five days’ pay) showed how much their employer cared about their well-being. This type of perception helps organisations because their employees work harder, are more satisfied and want to stay in their jobs longer. They also perform better.”

Whilst a medium-sized business saw a tangible impact from a four-day work-week, what impact would it have on larger companies? Well, Microsoft decided to test a shorter work-week out on its Japanese employees in August last year and found it had a significant and positive impact.

The project, dubbed “Work-Life Choice Challenge Summer 2019”, gave 2,300 employees five Fridays off in a row without decreasing their pay. According to the tech giant, the project led to more efficient meetings, happier workers and boosted productivity by 40%.

What challenges will businesses face when introducing a four-day workweek?

Whilst some have welcomed the idea of greater flexibility in more organisations, such as Finland’s Prime Minister Sanna Marin, our neighbours have been skeptical. Australian Industry Group Chief, Innes Willox, stated that “any reduction to the standard 38-hour workweek in Australia without a commensurate increase in productivity or a matching reduction in weekly pay would be very damaging for jobs, investment, and productivity.”

Willox had a point. Whilst Barnes was doing his math on how many hours staff at Perpetual Guardian had to work to maintain the same output in four days as five, he calculated that each employee would need to be productive for an extra 40 minutes a day. This would mean improving how people managed their time at work and got more from each day to make up for a lack of 8 hours at the end of the week.

University of Sydney’s Professor of Gender & Employment Relations, Marian Biard, also commented that a four-day workweek could be used to get five days of work in four and lead to many doing unpaid hours at home. In turn, this could cause greater levels of stress and issues around work demands.

The findings from the University of Auckland’s & University of Technology’s research into Perpetual Guardian’s trial, however, showed that staff simply adapted. “The employees reported better job satisfaction and engagement. They felt their teams had become more cohesive and skilled at doing their work together. This likely reflects the team focus at the start of the trial when they spent time developing the new four-day approach.”

The report went on to state that employees reported a small but significant decrease in work demand. This was attributed to other research that shows that having greater control over one’s job can enhance psychological well-being and, in turn, improve efficiency.

What if it isn’t practical for my business to move to a four-day work-week?

One other major problem with reduced working arrangements is practicality. There will be many businesses that work in industries or sectors that need to be reachable five or even seven days a week. If this applies to your company, then it may be worth exploring alternatives like reducing working days to seven or six hours instead of eight.

Barnes also provided several recommendations for businesses looking into reducing working hours without negatively impacting their business. One such suggestion was to ensure that any policies in place should include a degree of flexibility to appropriately react to seasonal workflow conditions and busy periods.

Summary: Could a 4-Day Workweek Really Work?

Whether your company could move to a 4-day workweek largely depends on your business model, services and customer base. But both a medium and large-sized organisation have shown significant success after testing 4-day work-weeks. If you’re thinking about introducing a four-day work-week, here are some points for consideration from Perpetual Guardian’s founder, Andrew Barnes:

  • Give employees plenty of time to think about how they can work differently and encourage them to come up with their own measure of productivity.
  • Encourage staff to consider how they can organise time off within teams while still meeting customer and business imperatives.
  • Begin with a trial and engage outside consultants/academics to evaluate qualitative and quantitative measures of success.
  • Consider introducing an opt-in policy for employees/departments on an annualised basis. An opt-in form can keep track of an employee’s productivity measures and roster information, as well as linking it to company values.
  • Establish clear personal and team business goals and objectives.
  • Consider seasonal workflow differences and ensure the policy can flex appropriately.
  • Be clear that the aim of the initiative is to improve things not just in the context of the company but also as regards the wider social obligations.

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