The four-day week: a no-brainer for business?

Looking for a healthy, happy, loyal workforce? Your search could end with a four-day week. By INDIA BURGESS, below, Head of Advocacy, Autonomy Research Limited

In recent years, the call to reduce working hours for no loss of pay has become increasingly strong from civil society campaigns and a growing body of research. This has culminated, to date, in the launch of the United Kingdom trial of the four-day week. Managed by the UK’s 4 Day Week Campaign, the think tank Autonomy, 4 Day Week Global and researchers from several universities, the six-month trial began in June and involves over 70 domestic businesses. Internationally, shorter working weeks have been successfully trialled (and in some cases implemented) in Iceland, Spain and Japan. Portugal is reviewing options for working time reduction, and national trials are under consideration in Scotland and Wales.

So what’s the fuss about a four-day week, and how is it relevant to SMEs? In brief, a four-day week can offer a win-win opportunity for employers and employees.

The standard format of a four-day week is a reduction to between 28 and 32 hours per week with no loss of pay, accompanied by a commitment from the employee to maintain their output in these shorter hours. This is also called the 100-80-100 system: 100% of pay at 80% of the hours with a commitment to 100% output.

Alongside a range of broader societal, environmental and economic benefits, a four-day week can increase rates of productivity within businesses and improve the mental and physical wellbeing of staff.

An unhealthy work-life balance and occupational stress is a leading cause of work-related illness in the UK. Not only is this untenable for employees’ wellbeing, it has an effect on businesses. In 2020/21, 1.7 million working people suffered from a work-related illness in Great Britain. Over 50% of these workers suffered from work-related stress, depression or anxiety. Of the 32.5 million working days lost caused by work-related ill health in 2019/2020, 17.9 million of these were due to stress, depression or anxiety. On average, a person suffering from work-related mental distress took 21.6 days off work in this period. That’s nearly 10% of annual days worked. Needless to say, this is bad for employers and also leads to high staff turnover.

A four-day week has been shown to reduce work-related stress across organisations and countries. Research completed by Henley Business School in 2021 found that 78% of employers who had a four-day week policy in place reported that employees were less stressed at work. In 2016 for 18 months, a trial was run in Sweden in 33 workplaces across four sectors including care and welfare and technical services. Across 17 randomly selected workplaces, the work day was reduced from 8 to 6 hours (equivalent to a 32-hour week). In all of the workplaces whose hours were reduced, employees experienced reduced stress, lower daytime tiredness and improved sleep.

Improved employee wellbeing will have a beneficial effect on staff retention, reducing recruitment costs and facilitating the delivery of higher quality work. Staff have a greater sense of loyalty to an organisation when there’s a standout perk that they don’t want to give up. What’s more, within sectors that cannot offer high rates of pay, or that are competing for staff in an innovative sector, a four-day week can be a great selling point to attract top talent.

Out of the eight trials we have delivered outside of the UK-wide pilot, six reported increased rates of productivity and three found overall output increased. Overseas, a trial in Iceland involving 2,500 public sector employees led to 86% of the workforce working or being eligible to work shorter hours. The trial city’s accountancy department saw a 6.5% increase in the absolute number of invoices entered to the accounting system during the trial, whilst a public sector call centre answered on average 93% calls during the trial, compared to 85% in another, non-participating, centre.

If the senior management or board of an organisation are looking to justify the introduction of a four-day week with an assurance that productivity will increase and output remain (at least) the same, this will be most achievable for those companies working in office- or home-based sectors. This includes finance, research, sales and design. The productive elasticity of computer and task-based work facilitates the opportunity for more efficient working, and therefore productivity increases, in these sectors.

In sectors such as hospitality, leisure, manufacturing, agriculture and construction, it is less likely that an employee would be able to work 20% faster serving customers at a till or laying tiles on a roof thanks to working time reduction. That said, aforementioned effects such as reduced absenteeism and greater staff retention would lower operational costs to a degree. Shorter working hours could also be an important tool in enabling longer, healthier careers in the context of an ageing population and workforce. To ensure the equitable introduction of a four-day week across the whole economy, it is likely that trade union or government involvement would be required.

Of all UK businesses, 99.6% are classified as micro-, small- and medium-sized enterprises. The professional, scientific and technical and business administration industry groups consist of 16.4% of these, which could stand to benefit from the introduction of a four-day week. This is particularly true in this early stage of the initiative – companies can make a name as trailblazers in their industries. In the UK pilot, all bar one organisation are SMEs, housing providers, financial service firms, creative agencies and not-for-profits who have all committed to improving employee wellbeing and taking a chance.

So what are you waiting for?

Autonomy