The 4 Day Working Week

This white paper is for business owners and managers who want to find out more about the 4 day week. A pilot of the 4 day working week was run over 6 months, and this paper is based on a report by Autonomy who was one of the organisations that ran the pilot, and also some newspaper articles.

A “4 day working week” means people getting paid 5 days’ pay for 4 days of work

At a glance:

  • Pilot of 4 day week over 6 months involved 65 companies and 2900 people, with 66% of companies employing fewer than 25 people.
  • Revenue over the period of the pilot increased by 1.4% and 35% compared to similar period pervious year – an indicator of a big improvement in productivity.
  • No measures on profitability, but significantly less staff turnover and absenteeism indicating reduction in costs.
  • Large improvements in staff efficiency and mental health, and much better work-life balance for staff.
  • 5 different models for a 4 day week
  • Lots to do and consider before setting up a 4 day week
  • Continuing – 56 of the pilot companies are continuing with the pilot, and 18 are making it a permanent policy.

1. Why a 4-day working week is important.

You need to look carefully at what is happening with the 4-day working week because 1 ) regardless of whether you want to “do” 4 days,  it raises important issues for how your company works and improving productivity; and 2) there are political moves across all 4 nations to introduce regulations around shorter working hours – so do you want to get ahead of the game?

Latest news: Sainsburys are implementing their own pilot of a 4 day week across different parts of their business.


2. Who was involved.

The pilot involved 65 companies and 2900 people:

The biggest grouping of participating companies included marketing (18%), Professional Services (16%) and Charities (11%). The remainder were spread pretty evenly at 7-9% for each grouping, including educational services, IT/Telecoms, Finance/Insurance, Health Care, Arts/entertainment, construction/housing and engineering at 2%.

The response rate is pretty impressive, lending legitimacy to the research: some 60 companies and 77% of employees responded. And thinking this does not apply to smaller companies?  66% of companies had 25 or fewer people.

There are some interesting respondent demographics: (you decide what impact these have on the results!)

  • 62% self-identify as women, 37% as men and 1% other.
  • 68% have a degree
  • 49% are professionals
  • 90% are white
  • 70% married or living with a partner
  • Even spread across all ages.

3. The Bottom Line

Revenue increased over the period of the pilot. (1.4% over the pilot, and 35% compared to same period the previous year.)  So productivity  must have increased to get the same result in fewer working hours.

There are no published figures on profitability or costs associated with a shorter working week,  which is a pity, as this is a key indicator.

However, there are two key findings which indicate a direct impact on profitability:

  • 57% less staff leaving (reducing recruitment costs and work disruption)
  • Less absenteeism   (65%, although the report authors says this figure needs to be treated with caution for for statistical reasons)

4. “Soft” measures for better profitability  

It is generally recognised  that mental health is a major factor in company and people’s performance. The pilot showed how a shorter working week can have a dramatic positive affect on mental health. People reported:-

Less stress (39%), burnout (71%) and anxiety (54%); more job satisfaction (48%), feeling better at the job (55%),  a positive attitude to work (64%), and a reduction in fatigue (46%).

People felt an  increased pace of work (67%), but without an increased workload.

Interesting facts:

“intensity” of work for staff –two thirds of respondents said that work was less or similarly intensive  Staff did report an increase the in the “pace” of work (62%), which makes sense if you have more to do in a shorter pace of time.

Men more than doubled their childcare activity, and, hard to tell if this is a direct result, but childcare costs for respondents reduced by 21%. [but, men did not do more housework….]                                p

5. Models for 4 day working

The stereotype for 4 day working is taking Fridays off. Not so. Below are the 5 main categories

1 day off (say Friday)

 Or any day of the week - Wednesday seemed popular in the pilot

Staged

Different groups/departments take different days

De-Centralised

Different departments work to their own plan

Annualised

32 hours per week over a year; for example, a seasonal business

Conditional

Working to KPIs to measure individuals’ and departments' performance to ensure consistency across a business

6. Getting started – things to do

Perhaps stating the obvious, you can’t just introduce a 4 -day working week; there are things to do, but which also provide a useful checklist for how you can improve your business. Listed below are some of the ideas and actions from pilot participants

  • Terms and conditions – getting employment contracts up to date, especially for part time workers (for 4 day week, for example, pro rate holidays). It is good practice anyway to review your employment contracts.
  • Consulting and getting agreement for a 4 day week from staff - do you consult regularly with your team?
  • Auditing work processes and developing new ones – great to do anyway to identify efficiencies
  • Automating work processes where possible – will save time, money and reduce errors.
  • Getting clients’ agreement/notifying them of changes - great to communicate with clients anyway
  • Develop a set of metrics (KPIs) to measure performance – you should have these anyway

Tips from the pilot

  • Reports from the pilot suggest that this is a good way to discard high cost/unwanted clients and focus on those you want – great business practice!
  • Be more disciplined with meetings – time, agenda, keeping to the point.
  • Develop good email etiquette 
  • Better use of time – set plan for following day at end of previous day; and do a time audit - how do you spend your time.


7. Potential Problems.

It is  not all plain sailing. 

  • It remains unclear how profitability is affected. Despite productivity increases, do costs increase? 
  • How are 7-day service or intensive customer-focussed businesses affected?
  • there was a very small participation of engineering companies in the pilot - why was that, and what are the implications?
  • One customer-service enterprise remains very concerned about meeting tough contractual obligations with potential time and resource issues and unknown cost implications to solve these. 
  • A financial services business makes it clear that this will not work in their cut-throat market; "an extra day off could result in permanent holiday....."!
  • Something not really touched on in the pilot report - people's competitiveness! A digital marketing agency, not involved in the pilot, found that some people would try to get a competitive advantage over their colleagues by working secretly on the "5th Day"!  
  • The report does refer to people being concerned about lack of social interaction. When there is strong focus on getting the job done in the time, there is less time for the "water cooler" conversations.
  • And, something that is not touched really in the report, is that some people actually like to go to work
  • Finally, you need properly trained people to work in a more focussed business - there is less time for informal learning.

 8. What next?

Whether a 4-day working week will suit your business will depend on how you see your market, your business culture, your operations, and your people - and you as a business owner.

There are good results for "well-being" of staff, and perhaps this was a contributory factor towards better productivity as indicated by a slight improvement in revenue in the 4 days - the old cliche that work expands to fill time available! But there is no evidence of any effect in profitability. So you need to form a view how you will tackle this.

The large number, different sizes and types of organisations involved and people involved in the pilot show that a 4 day working week can work right across the board. 

And hot news, at time of this white paper, that Sainsbury's is starting a 4-day week trial across its businesses shows there is a groundswell building up.

So, it's up to you!

The full report on the pilot is available here

Please contact me if you want to discuss any aspects of this report.