Why a Four Day Work Week Delivers Productivity Improvement

Opponents claim that paying employees for five days when they only work four is a giveaway.

But from a productivity standpoint, if the output - and outcomes - of those workers improves significantly during the four days while reducing ancillary costs like electricity or the cost of parking, it may actually improve margins.

In the digital era, the issue is not a traditional labor-vs-management battle but how to work smarter in order to optimize the impact of technology. JL


Charlotte Graham-McLay reports in the New York Times:

A firm that let its employees work four days a week while being paid for five says the experiment was so successful it hoped to make the change permanent. The firm found the change boosted productivity. “Supervisors said staff were more creative, attendance was better, they were on time and didn’t leave early or take long breaks. Job performance didn’t change when doing it over four days instead of five.” Noting the company had seen lower electricity bills with 20% less staff in the office each day, the change could have wider implications if more companies adopted such a strategy.

A New Zealand firm that let its employees work four days a week while being paid for five says the experiment was so successful that it hoped to make the change permanent.

The firm, Perpetual Guardian, which manages trusts, wills and estates, found the change actually boosted productivity among its 240 employees, who said they spent more time with their families, exercising, cooking, and working in their gardens.

The firm ran the experiment — which reduced the workweek to 32 hours from 40 — in March and April this year, and asked two researchers to study the effects on staff.

Jarrod Haar, a human resources professor at Auckland University of Technology, said employees reported a 24 percent improvement in work-life balance, and came back to work energized after their days off.

“Supervisors said staff were more creative, their attendance was better, they were on time, and they didn’t leave early or take long breaks,” Mr. Haar said. “Their actual job performance didn’t change when doing it over four days instead of five.”

Similar experiments in other countries have tested the concept of reducing work hours as a way of improving individual productivity. In Sweden, a trial in the city of Gothenburg mandated a six-hour day, and officials found employees completed the same amount of work or even more. But when France mandated a 35-hour workweek in 2000, businesses complained of reduced competitiveness and increased hiring costs.

In Perpetual Guardian’s case, workers said the change motivated them to find ways of increasing their productivity while in the office. Meetings were reduced from two hours to 30 minutes, and employees created signals for their colleagues that they needed time to work without distraction.

“They worked out where they were wasting time and worked smarter, not harder,” Mr. Haar said.

Andrew Barnes, the company’s founder, said he believed his was the first business in the world to pay staff for 40 hours when working 32; other firms have allowed employees to work shorter weeks by compressing the standard 40 hours into fewer days, or allowed people to work part-time for a reduced salary.

Mr. Barnes said he came up with the idea for a four-day workweek after reading a report that suggested people spent less than three hours of their work day productively employed, and another that said distractions at work could have effects on staff akin to losing a night’s sleep or smoking marijuana.

He said the results of Perpetual Guardian’s trial showed that when hiring staff, supervisors should negotiate tasks to be performed, rather than basing contracts on hours new employees spent in the office.

“Otherwise you’re saying, ‘I’m too lazy to figure out what I want from you, so I’m just going to pay you for showing up,’” Mr. Barnes said.

“A contract should be about an agreed level of productivity,” he added. “If you deliver that in less time, why should I cut your pay?”

He said working mothers stood to benefit most from the policy, since those returning to work from maternity leave often negotiated part-time hours, but performed the equivalent of full-time work.

Tammy Barker, a senior client manager with the firm, agreed with Mr. Barnes’s assessment.

Ms. Barker, a mother of two who lives in Auckland, said she spent her day off each week running personal errands, attending appointments and shopping for groceries, which allowed her to spend more time with her family on weekends.

She had realized during the trial how often she jumped between tasks at work as her concentration waned.

“Because there was a focus on our productivity, I made a point of doing one thing at a time, and turning myself back to it when I felt I was drifting off,” she said. “At the end of each day, I felt I had got a lot more done.”

Noting that the company had seen lower electricity bills with 20 percent less staff in the office each day, Mr. Barnes said the change in work hours could have wider implications if more companies adopted such a strategy.

“You’ve got 20 percent of cars off the road in rush hour; there are implications for urban design, such as smaller offices,” he said.

Perpetual Guardian’s board will now consider making the change permanent.

The government’s workplace relations minister, Iain Lees-Galloway, said too many New Zealanders worked overly long hours, and it was “great to see a company finding a better way.”

“I applaud this instance of working smarter and encourage more businesses to take it up,” he said.