At a glance:
A handful of businesses underwent a four-day workweek trial to see if it would benefit them.
Organisations that experimented with the four-day workweek found that it was a success.
Considerations for other employers pondering the idea.
Why the personal finances of employees pose a business risk.
How the movement could shape the future of the typical working week.
The experiment:
Dubbed ‘the world’s largest trial of the four-day workweek’, over 60 UK-based organisations of varying industries and sizes piloted the working model with positive results. 56 have opted to continue their newfound way of working. Employees taking part in the experiment were offered a shorter workweek whilst maintaining their full pay.
Put into practice, it was important that it didn’t feel like a rigid ‘one rule for all’, but rather businesses could tailor the policy to suit the needs of the organisation and its workers. Some industries chose to adopt a four-day week structure of ‘Friday or Monday off’. Others found it more suitable to follow a ‘staggered’ and ‘decentralised’ model.
The idea originated from a 2015 trial in Iceland, whereby 2,500 employees worked decreased hours for the same amount of pay, resulting in positive outcomes for both employee wellbeing and business objectives. Following that, a New Zealand-based company undertook a similar model and made the change permanent. Their Managing Director at the time, Andrew Barnes, then established the not-for-profit known as 4 Day Week Global to spearhead change for a four-day workweek on a global scale.
The Australian government is also considering a trial of the four-day workweek scheme. An article by SmartCompany reports that the Senate Select Committee on Work and Care has conducted a report with 23 recommendations.
The government will assess if the 100:80:100 model is viable and beneficial to Australian workers, businesses, and the economy. The theory behind 100:80:100 is 100% of an employee’s salary, 80% of a five-day workweek, and 100% productivity for businesses. In other countries this model has been found to improve both employee well-being and business productivity.
The report by the committee also suggested that a four-day workweek could contribute to gender equality, and bring about a workplace cultural change that would redistribute the balance between gender roles and pay. The committee did also raise some concerns over how a four-day workweek would affect small businesses, however, the report recommends the Australian Government partners with an Australian university to measure the success of a national trial and provide guidance for businesses on how to tailor a setup that suits their needs.
What the data reveals:
Research from Autonomy and 4 Day Week Global shared a snaptshot of the four-day workweek’s success on a global scale:
92% of the companies will continue with the four-day workweek, and 18 have said this is a permanent policy change for their organisation.
39% of employees felt less stressed.
71% had reduced levels of burnout.
60% found they were able to establish a better balance of care responsibilities.
A significant drop in staff leaving – as much as 57%.
Following the trial 15% of employees claimed that no amount of money could persuade them to return to a five-day workweek.
Are employers not yet convinced?
More companies are intrigued by the prospect of a four-day workweek, but there’s still reluctance. There’s much to weigh up for businesses and for those that need persuading, the following might be enough to compel them to join the movement:
Improved business productivity despite the reduced working hours as employees are less stressed and able to give their time more fairly to work and other commitments, meaning less presenteeism and absenteeism. (opens a new window)
A better work-life balance helps boost overall health and well-being both physically and mentally - reducing stress, burnout, (opens a new window) and poor posture which can lead to back and neck pains.
Looking at the model from a holistic point of view it also reduces commute time and the use of transport modes typically used for commuting to the workplace which is a step in the right direction for organisations hoping to achieve better carbon outputs. This also means reduced costs in expenses.
Increased staff attraction and retention as employees feel they have sufficient rest time, leaving them energised to complete their work duties.
Morale is lifted as employees will have more time to do the things they love outside of work and will feel valued by their employer. Many studies have found that happier employees are more productive. According to the University of Oxford, their research indicated workers are 13% more productive when happy.
The link between poor financial health and presenteeism:
With the continued spike in the cost of living, further interest rate rises, and whispers of a possible recession, it’s not surprising that money is top of mind for most people. People are anxious about their job security and income. Financial worries have a negative impact on employees, and it often leads to increased presenteeism (opens a new window) and absenteeism (opens a new window), stress, burnout, (opens a new window) anxiety, and low morale.
In an article by the UK publication Raconteur, research found in the Money and Mental Health Policy Institute’s Report documents that two-thirds of employees grappling with financial distress often show one or more signs of poor mental health such as a lack of concentration which hinders their ability to work to their full capacity.
Given the impact financial well-being has, it’s important that employers address it in the workplace. This will not only have a positive impact on the health of the workforce but the organisation overall, as improved financial health is linked to better productivity. Data recorded in AMP’s 2022 Financial Wellness Report reveals:
21% of employees are unable to work productively due to financial stress.
An average of 10.8 work hours per employee is spent dealing with financial matters.
Over 12 hours a week are lost from stress-related absenteeism (opens a new window) and presenteeism. (opens a new window)
Lockton’s Waking up to Absence Report (opens a new window) also notes how presenteeism (opens a new window)can contribute to increased accidents and injuries which adds further costs to businesses from workers’ compensation claims, further burdening a workforce.
How does a four-day workweek help?
As already established earlier, there is a myriad of benefits both to the employer and employee for implementing a four-day workweek. This could be the financial alleviation that employers are crying out for. Some examples of how this can help are:
Working reduced hours for the same pay makes childcare and pet care cost more affordable.
More pocket money leftover from not having to top up petrol or public transport expenses.
Save on the cost of lunches and beverages.
During these financially turbulent times, employers need to take necessary action to help their employees who are feeling the ‘penny pinch’. It’s a win-win for both parties, as it helps to promote engagement and loyalty whilst strengthening business productivity, resilience, and profitability. The four-day workweek or a similar working model should be part of the 2023 boardroom agenda as a top employee benefit that encompasses many existing offerings – including help with financial pressures.
How else can employers support financial wellbeing in 2023?
Employees who feel valued and happy at work are more likely to remain loyal to their employer and be more motivated to perform well. So how can employers support financial well-being at a time when budgets are tight, and salary rises are likely to be scarce?
To help alleviate mounting cost pressures on budgets, and individuals, there are various cost-effective funding models that employers can best align with their employee benefits philosophy.
1. Consider corporate private health insurance (opens a new window) which includes financial support tips. For employers who are not in a position to provide private health cover, they should not underestimate the value of providing a voluntary (employee-funded) corporate health plan. A voluntary program can provide employees with discounted private health insurance, dedicated corporate products, and most importantly health and well-being and mental health support at both an employee and organisational level. In Lockton’s Private Health Trends Report, (opens a new window) it shows that corporate private health insurance is ranked as ‘the most highly valued employee benefit.’
2. Financial coaching is an offering that gives employees one on one access to financial coaches who can lend guidance on their personal financial matters.
3. Organisations should analyse employee data to consider how different demographics might be impacted by financial strain. For example, those close to retirement age might need assistance with late-career planning and superannuation advice.
A glimpse of the future workweek:
With such success coming from the piloted four-day workweek model, it’s a possibility that more companies will follow suit. For those organisations perhaps more limited by their type of work, they can incorporate different policies that help reduce working hours. It’s likely that the traditional working week will diminish over time with more flexibility, reduced hours, and less time in the office – but could the expectation of the same output in less time add more strain, and see employees asking for their five-day work weeks back?
Whilst this is all speculation, what is clear, is that employees require a range of needs for them to feel motivated and work effectively. Employers should listen to their needs, and respond accordingly in a way that supports business goals.