Incoming: the 4-Day Workweek. Are You Ready?

Posted by Mai Hoai Thu on

If you think organisations that embrace the "work from anywhere" arrangement are progressive enough, think again!

While deciding whether to employ a four-day work model or a completely virtual or hybrid workforce will give those involved a massive headache, this could be the key to unlocking productivity that we have never imagined before.

Incoming: the 4-Day Workweek. Are You Ready?

What is a four-day work week?

A four-day workweek is exactly what it sounds like - employees work for four days per week instead of the usual five or six and enjoy a three-day long weekend instead of two.

Many trial runs have yielded positive results, and employees have experienced significant productivity increases and lower burnout. This flexibility has become a hard selling point and helps attract talent, especially women and those with personal commitments.

If you search for successful examples of the four-day workweek model, you will see that Microsoft Japan and Perpetual Guardian in New Zealand got the most attention. In fact, much of the widespread success was thanks to Andrew Barnes, CEO of Perpetual Guardian, New Zealand's largest estate planning company.

As a firm believer in "longer working hours are better for business," the driver that pushed Barnes to rethink the strategy for his teams was the heavy toll due to long hours.

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"Core to this is that people are not productive for every hour, every minute of the day that they're in the office," Barnes says, which means there was lots of distraction and wasted time that could be cut.

Today, the four-day workweek model has been adopted by more than 100 companies worldwide. Some are in pilot phases, but the majority are doing it on a seasonal to permanent basis1.

In addition to Japan and New Zealand, Belgium, Iceland, Spain, Scotland, and the United Arab Emirates (UAE) have all tried the four-day workweek and found it to be successful.

However, the method implemented varies from one country to another. For instance, in Belgium, work hours are condensed into fewer days, whereas in Iceland, work hours are reduced, but pay levels remain unchanged.

Like other work arrangements, there is no "one size fits all" when it comes to how the four-day workweek should be laid out. Each method is unique, and employers should carefully consider the pros and cons of each and get buy-in from employees before making the switch.

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Weighing the impact of a four-day work week

Statistically speaking, employees’ productivity has steadily increased in tandem with compensation over time. According to data collected from 183 industries between 1987 and 20152, the productivity level can reach up to 5% annually and those that leveraged technological advancements experienced the highest spike.

However, compensation levels have yet to match up with productivity, only increasing 2% annually. The lagging has led to a widening gap between productivity and compensation, depicting a picture that employees have been able to get more work done in much less time, yet they are still unfairly compensated.

The four-day workweek can remedy the issue and provide employees with the much-needed work-life balance. However, the practice is not without its flaws.

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Let’s take a closer look at the good and bad sides of this concept.

Pros

Cons

  • Better work-life balance
  • Increased productivity
  • A new competitive advantage
  • Save costs
  • Complex
  • Increased pressures to meet deadlines
  • Not applicable to all industries

Benefits of adopting a four-day workweek

Better work-life balance

Have you ever experienced the feeling that the weekend passes by so fast, and before you get comfortable and enjoy some time off, Monday comes? Having an extra day means individuals will have more time to work on their personal projects, hobbies, or simply valuable time to be with their families.

This can lessen negative health effects on workers, and improved well-being can elevate the employee’s productivity level.

Increased productivity

When employees are provided with ample time to rest and relax, output levels spike.

After the trial, the productivity of 2,500 participants in Iceland is reported to have increased or, at the very least, remained unchanged. Additionally, their well-being improves significantly, processes are optimised, and better collaboration is achieved overall.

Participants in Microsoft Japan’s trial saw a significant boost of 40% in productivity, nearly double the result reported in the study of Perpetual Guardian in New Zealand.

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Competitive advantage for hiring

Allowing employees to choose how, when, and where they carry out work is definitely a great competitive advantage when it comes to attracting potential talents. It shows that companies care about employee well-being, and in today’s increasingly fierce war for quality talents, a sustainable people strategy can make companies stand out.

The US fast-casual restaurant chain, Shake Shack, experimented with the four-day workweek practice at selected stores, starting by shortening managers’ schedules to four days per week. The shift led to a spike in recruitment, especially among women.

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Cost-saving

Statistics suggest that even when employers allow employees to work remotely just 50 per cent of the time, they can already save approximately $11,000 per employee per year3.

Though the costs saved with the four-day workweek practice might not be as eye-opening, similar effects can still be achieved. Employees save time and money by not having to commute to work, while employers save money by using less electricity and utilities. Other resources such as paper and custodial services are also not used when employees are off.

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Disadvantages of adopting a four-day workweek

These benefits all sound amazing, but the reality is that implementation is not an easy task. Policies have to be adjusted, schedules have to be changed, staff have to be prepared, etc.

One thing to consider is that the new work model will affect all business functions, and thus, any external stakeholders, from suppliers to vendors and clients, must be informed of the change.

In other words, if clients contact the customer service department for an urgent matter on an off day outside of the usual Saturday and Sunday, the customer service reps might not respond until the next working day.

Moreover, the staff needs to cramp five days' worth of work into four, thus increasing pressure to meet deadlines.

More important, this radical model does not work for every industry, such as in the case of the customer service department mentioned above. Other customer-facing sectors might also face challenges when adopting the four-day workweek. Customers want retailers to stay open every day, and giving doctors and nurses an extra day off can cause severe consequences.

Read more: Are Deskless Workers a Blind Spot In Your Remote Working Strategy?

Employees matter and choices matter

Today, progressive practices like hybrid working or four-day workweek are becoming common, signalling an increasingly flexible workplace where employees’ health and well-being are put at the forefront.

Realistically speaking, the four-day workweek is better for some, not all. But when companies around the world are struggling to fill vacant positions, flexibility in how, where, and when the employees can work and with whom is a competitive advantage that is impossible to ignore.

Flexibility should not be limited to just a couple of options where one must choose either A or B. Instead of force choosing, companies can consider blending different options to create a solution that truly suits the unique nature of each company.

Moreover, work is a team sport; each employee is part of a bigger squad, and that sometimes requires people to compromise for the greater good. Underlying it all is a company culture that fosters collaboration, integrity, kaizen, etc., and leaders and managers who focus on what people are delivering, not where, when, or how they do it.

Today’s work is not confined to the four walls of the office. It has grown beyond that.

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Sources:

1. https://himalayas.app/advice/companies-with-4-day-workweeks

2. https://www.bls.gov/opub/btn/volume-6/pdf/understanding-the-labor-productivity-and-compensation-gap.pdf

3. https://globalworkplaceanalytics.com/telecommuting-statistics

Topics: Talent Management

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 Rick Yvanovich
 /Founder & CEO/

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