Four-day working: what have we learned so far?

The case for four-day working is compelling, but so is the case against. Will it prove to be the natural next step in our evolution or a major threat to our economy?

Unless you’ve been hiding away with zero access to media in recent months, you’ll be aware that there is a growing momentum towards four-day working.  And you may have conflicting opinions on whether this is something that should be pursued.

The UK recently saw 61 companies and close to 3,000 employees take part in a six month trial of four-day working.  The headline stats, recently published by Autonomy.work, are pretty positive, with 95% or participants either opting to continue with the trial or make it permanent policy.

Perhaps unsurprisingly, employees are reporting a real desire to continue with the new arrangement, with 72% saying they achieved the same amount of work in less hours and 89% saying they managed to take a full day off.  Additionally, 71% said they experienced less burnout despite needing to be 25% more productive on each of their 4 days worked.

With a good spread of sectors involved, from Professional Services through to Manufacturing and Engineering, the trial insights show that obvious blockers to a reduced working week can and have been overcome.  But what does the trial tell us about the potential for four-day working to become the norm?

A brewing conflict of opinion?

Despite the insights within the report giving a strong indication of opinion and impact for employees, there is still little to objectively state what the impact on productivity and, critically, revenue / profit performance and growth are. 

For those companies who supplied P&L data, it was suggested that revenue grew by 1.4% from the start to the end of the trial with profits being steady.  It’s even indicated that revenue grew by as much as 35% when compared against the same period during 2021.

However, a lack of a robust baseline (due to the lagging effect of the pandemic) or a comparable control group, it’s not surprising that a growing number of critics are starting to voice concerns over this initiative and whether it risks inhibiting output.

Their argument is that, as a developed nation with a struggling economy and an apparently chronic issue with productivity, pursuing an initiative that would see a 20% reduction in output hours would be unwise at best and a serious threat to our economy at worst.  The counter argument is that people with a better work / life balance and more energy will be more productive and more disciplined, subsequently leading to economic growth.

This once in a century shift in mentality when it comes to work is starting to prove divisive and something that clearly requires more testing and analysis. 

So, what have we learned so far?

1. This has been done before.

While four-day working as a concept is relatively new, the idea of reducing worked hours and increasing social / family time is not. 

We need only look back at the second and third industrial revolutions (stretching the 1800s and 1900s) as the catalyst for and driver of what is now regarded as the norm – eight hours a day, five days a week and an economy that is considerably bigger now vs. the past.

In fact the desire for an eight-hour workday vs. the previous norm of 12-14 hour days, 6-7 days per week, was simply coined by Welshman Robert Owens as he attempted to counter errors and safety issues in industry with his vision for ‘Eight hours work, eight hours recreation, eight hours sleep’. 

That demand was made in 1889 but widespread uptake didn’t really happen until 30 years later, driven by the likes of Henry Ford and the rise in mass production (interestingly at the same time as driving major growth in wages).  You can read more about this in our article from 2018 here.

What this shows us is that change, no matter the scale, can and will gain momentum and support as the visions and concepts are proven.  In a bell curve of change (below), the 61 UK trial companies can be regarded as the ‘innovators’. We might well see a much larger group of organisation make the shift as ‘early adopters’.  Through that group, we will likely see much more robust data on impact which, over time, could then lead to a large scale migration of working arrangements to 32 hour and / or four-day working.

2. It’s highly attractive to the workforce

Regardless of sector, early opinion polls of both trial participants and observers suggest very high levels of interest in pursuing four-day working.  In fact, our recent poll saw 88% of respondents state they felt it was the right thing to pursue either now or in the future and only 8% seeing it as a threat.

It seems we’ll struggle to find many people saying they’d prefer to continue working a five day average week rather than reducing to four and still being paid the same amount, though organisation / company leaders, business owners, the self employed and workaholics may be more reserved in their aspiration.

The potential upsides for employees are clear to see, with opportunities for improved mental health and time with family and friends being major hooks.  But there are also clear financial opportunities including reduced childcare and commuting costs meaning more disposable income to spend and, in turn, the potential for broader economic growth. 

However, though highly attractive, there are concerns that certain sectors would not be able to implement a reduced work week, including public sector (e.g., health, education and police) and consumer facing sectors such as retail and hospitality.  This means there is a real risk of growing resentment between sector and, potentially longer term, the threat that employees from sectors who cannot (or will not) implement a four-day work week either demanding 25% increases in pay (to reflect the extra day worked) or retrain and seek a move into sectors that are working reduced hours.  This clearly creates a threat of significant turnover and / or salary inflation as sectors seek to keep hold of their employees.

Only time will tell how the attractiveness of employees to four-day working will play out in terms of disruption and change within various sectors, and in a low unemployment economy, it’s the employees not the employers who may be the deciding factor.

3. One size doesn’t fit all

While titled ‘four-day working’ as a trial / concept and often viewed as a Monday to Thursday work week going forward, extending the weekend to Friday through Sunday, the trial participants actually adopted various set ups. 

While certain companies could effectively ‘close’ for one day and give all employees a Friday off, others needed to remain ‘open’ for five (or even seven) days and instead opted for staggered days off for employees. Some had to be even more creative in their approach.

Whichever way this concept goes, it’s unlikely that a defined weekend of Friday through Sunday will become the norm overall as sectors such as Retail and Manufacturing would struggle to implement this.  Instead, the trial participants fell into one of the five below categories with each employer looking to make the transition needing to make a well thought through decision on which format of ‘four-day working’ employer they would be:

Ultimately, the working arrangement adopted needs to balance customer expectations, financial performance, longer term growth and improvement plans and employee wishes, each of which are unique not just to the sector, but to the organisations themselves.

 4. The economics are still unproven

Customer psychology dictates that most purchase decisions are 90% emotional (a desire for a brand, product or a company they connect with), with the rest being a more formal ratification (is the price right, does the spec do what I need it to do, etc). 

The same can be said for the desire and potential decision to move towards a four-day work week.

The upsides and therefore the emotional hooks for both employees and employers are strong, making it a hugely attractive proposition.  But the potential downsides that require formal assessment and ratification must been thoroughly evaluated and tested before a permanent change is pursued.

It’s easy to promise something; it’s harder to renege on that promise.

If a shift to four-day working is adopted and then, over time, it becomes clear that the initial upsides in productivity and performance are not sustainable, returning to a five day working pattern could and likely will result in a disgruntled team. 

In fact, the trial results suggested that 69% of employees would want a 10 – 50% payrise to move back to a five day working arrangement.

With that risk in mind, it’s important that the productivity argument (i.e., the same amount of output can be achieved in 20% less time, resulting in a sustained 25% productivity increase) is fully proven over the long-term.  The available data at this stage falls short of doing that, meaning there is a requirement for an extended trial (size, type and length) and much more attention on objective performance data to satisfy all stakeholders that a four-day work week would not have a detrimental impact on economic growth.

With this in mind, it’s important to consider that, with a major hook / carrot dangled, employee productivity will no doubt increase in the short-term.  But as things normalise and the impact of a 25% productivity increase requirement take its toll, the major question is whether that increase in productivity is sustainable in the long run.

 5. This is a big change

Arguably there hasn’t been such a monumental shift in working arrangements for a century or more.  While the arguments for are compelling, the arguments against are too. 

As such, as is the case with every major change, the pursuit (or not) of four day working at a company and sector level needs to be thoroughly thought through, tested, analysed and methodically implemented.

Perhaps the bigger risk does not sit with those organisations that have an appetite to move towards four-day working (though the transition should be planned thoroughly bearing in mind once the step is made, it might be difficult to reverse), but in fact sits with those organisations and leaders who’s immediate response is that the can’t or won’t make the change themselves. 

As the snowball of change gains traction, the more four-day working might become a standard expectation of the workforce, and not a perk reserved for a special few.  And with this, the perceived laggard and late majority groups who fail to seriously consider it might find themselves facing significant employee turnover or serious salary inflation pressures.  Or both.

At beating hearts we are experts in helping businesses to navigate change in an effective and sustainable way, including the pursuit of four-day working. To find out more, get in touch to set up a call!