One of the pioneers in establishing Saturday and Sunday as days off for workers was the American automaker Henry Ford in 1926, with the idea that rest during the weekend would make them more productive, reducing absenteeism and improving efficiency.
Around the same time, economist John Keynes indicated that eventually society would evolve towards a work week of only 15 hours, considering the speed of technological advances. Almost a century later, that prediction is still far from being fulfilled, although several companies have conducted experiments to reduce it to 32 hours and there is even an organization in New Zealand called “4 day week” that promotes the four-day work week.
“All the businesses we talk to report an increase in productivity,” Charlotte Lockhart, the organization’s executive director, says. Lockhart and Andrew Barnes implemented the four-day work week in 2018 at the firm Perpetual Guardian, dedicated to counseling for family wealth planning and financial investments.
Successful experience
“Our experience has been very successful,” says Lockhart, arguing that absenteeism decreased and increased worker well-being. The idea behind the reduced hours is, as Andrew Barnes puts it in his book “The four day week”, a commitment to flexible work that allows increasing productivity, profitability, well-being, and a more sustainable future.
Taking these factors into account, the giant Unilever consortium will begin in December an experiment that will last for one year with the 81 employees of the firm in New Zealand: it will reduce the work week to four days, without reducing the salary of the employees.
“The old ways of working are obsolete,” Nick Bangs, managing director of Unilever New Zealand, declares. Bangs says they were motivated by the example of companies such as Perpetual Guardian and Microsoft in Japan, and by the ideas of New Zealand Prime Minister Jacinta Ardern on the need to seek more flexible ways of working in the midst of the COVID-19 Pandemic.
The multinational will measure the performance of the workers in relation to their results and, according to the conclusions of the experiment, the company will decide whether to apply the new work system in other countries.
Among the firms that have shortened the working week are Britain’s Nicholson Search, Danish IIh Nordic and American Monograph, which started with the new work model more than four years ago.
Other examples are MRL Consulting, Morrisons, ICE recruitment, Buffer and the local government of the Spanish city of Valencia, which even announced subsidies for companies that adopt this labor regime in October.
According to the Regional Secretary for Employment, Enric Nomdedéu, the aim is to improve the balance between work and private life, reduce the carbon footprint and increase productivity.
Jan-Emmanuel De Neve, director of the Center for Wellbeing Research at the University of Oxford Business School, points out that all the studies that have evaluated the impact of a four-day week have shown positive results in terms of productivity, understood as the amount of work that is done in a defined time.
“For example”, De Neve adds, the Pursuit Marketing company in Scotland saw a 22% increase in productivity when implementing this system. But De Neve says it’s important to consider the effects on employee well-being and work-life balance.
“The welfare angle is the key to understanding why there is a spike in productivity,” he says, explaining that there is causal evidence on the impact of employee well-being on productivity.
“In our study with British Telecom, we found that in the weeks when workers are happiest, there is a 13% increase in sales.”
“It is not realistic”
Until now, experiments that reduce the workweek have been driven by companies that have voluntarily chosen to try that path. However, in countries like the UK, a tough political debate has sparked after trade union organizations and members of the Labor Party proposed a widespread adoption of the shortened working week.
In the midst of the discussion, a report by economic historian Robert Skidelsky and published in September last year found that imposing a four-day work week “is neither realistic nor desirable.”
Skidelsky argued that such policies would not be successful, citing the example of the introduction in France of a weekly limit of 35 hours of work in 1998. “The evidence is that, after a brief impact effect, French legislation was rendered largely ineffective by an accumulation of exceptions and loopholes.”
Jonathan Boys, a labor market economist with the Chartered Institute for Personnel and Development (CIPD), argues that it is not the best alternative. “It has been suggested that it can increase productivity and provide a better balance between work and personal life, but the evidence for this is scarce and self-selected,” Boys said.
The economist explains that during the last decade, productivity growth has been flat and that the fall in business investment during the Pandemic suggests that this trend will continue. From this perspective, the current economic context shows that “economic forces are not working in favor of the four-day work week,” says the expert.
However, Boys argues that there may be changes in work systems in the wake of the Pandemic, since preliminary evidence suggests that teleworking could boost productivity. In addition, many people plan to continue working from home after the Pandemic, something that is transforming the traditional work system. “If we can’t cut down on our working hours, we should at least be able to cut back on commutes,” says Boys.
What to do about overworked people
Another topic that is part of the global discussion is that not all types of companies can reduce the week to four days, given the nature of their business. What about firms that operate on a shift basis, such as a hospital, restaurant, or mining firm? And another point that questions the effectiveness of the proposal is how employees who already have a great work overload are going to adapt to the idea that they should do the same, but in fewer days. In those cases where a person does the work of two and usually leaves the office late, it is likely that a four-day week ends up being a trap that forces you to work from home so as not to lower your productivity.
Even researchers who are in favor of a shortened workweek, such as Auckland University of Technology Human Resource Management Professor Jarrod Harr, have warned that it is very difficult for an overworked worker to adjust to the four-day week. However, Harr believes that despite the potential downsides, the experiments are worth doing.
The experiment in Sweden
And among the experiments that have been carried out in different countries, there are different results. For example, in the city of Gothenburg, Sweden, an experiment was conducted by reducing the work done by employees of state-run nursing homes to six hours a day.
Although productivity and absenteeism did indeed improve, costs skyrocketed because they had to hire more employees to cover shifts. The result is that the experience was financially unviable.
There is also the case of some startups that tried the system, but ended up returning to the traditional work week. That happened to Treehouse, an American firm that helps recruit and train tech talent. Its founder, Ryan Carson, implemented the system for almost a decade. But in 2016, he had to tell his workers that they had to come back in 5 business days because the competition had become very tough.
The Shake Shack Restaurant Chain Experience
Others have had a good experience, such as the American fast food chain Shake Shack, which reduced the weekly hours to 32 and kept the salary of its employees. The company expanded the experiment earlier this year to a third of its 164 locations, before COVID-19 turned into a Pandemic.
But this experience has been more of an exception than the rule in the United States, a country where workload reduction has not gained ground because it goes against the notions of work ethic and capitalism that exist in the country, according to Peter Cappelli, a professor at the Wharton School of the University of Pennsylvania. And because companies are often focused on responding to shareholders, he explains, they tend to prioritize profits over employee benefits.
Movement is growing
Back in New Zealand, the “4 day week” organization claims that the interest of larger firms in doing experiments to reduce the working week has grown. Not only is Unilever one of the multinationals interested in testing new flexible working systems, but there are other multinational corporations that have shown interest in testing.
What is not clear is if these experiments will be isolated experiences or if they will end up becoming the first steps of a growing trend. What labor researchers do agree on is that the Pandemic has forced companies to adapt to new working conditions that include more flexible schemes, with telework options. And that opening to more flexible systems together with technological changes, could give a turn to labor systems as we have known them until now.
