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Four-day work week trials have been labelled a ‘resounding success.' But four big questions need answers

Business / opinion
Four-day work week trials have been labelled a ‘resounding success.' But four big questions need answers
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Shutterstock.

By Anthony Veal*

A little more than a century ago, most people in industrialised countries worked 60 hours a week – six ten-hour days. A 40-hour work week of five eight-hour days became the norm, along with increased paid holidays, in the 1950s.

These changes were made possible by massive increases in productivity and hard-fought struggles by workers with bosses for a fair share of the expanding economic pie.

In the 1960s and ‘70s it was expected that this pattern would continue. It was even anticipated that, by the year 2000, there would be a “leisure society”. Instead, the trend towards reduced working hours ground to a halt.

But now there are suggestions we are on the cusp of another great leap forward – a 32-hour, four-day week for the same pay as working five days. This is sometimes referred to as the “100-80-100” model. You will continue to be paid 100% of your wages in return for working 80% of the hours but maintaining 100% production.

In Spain and Scotland, political parties have won elections with the promise of trialling a four-day week, although a similar move in the 2019 UK general election was unsuccessful. In Australia, a Senate committee inquiry has recommended a national trial of the four-day week.

Hopes of the four-day week becoming reality have been buoyed by glowing reports about the success of four-day week trials, in which employers have reported cutting hours but maintaining productivity.

However, impressive as the trial results may appear, it’s still not clear whether the model would work across the economy.

An employer-led movement

Unlike previous campaigns for a shorter work week, the four-day workweek movement is being led by employers in a few, mainly English-speaking, countries. Notable is Andrew Barnes, owner of a New Zealand financial services company, who founded the “4-Day Week Global” organisation.

It has coordinated a program of four-day week trials in six countries (Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States). Almost 100 companies and more than 3,000 employees have been involved. (A highly publicised trial in Iceland was not coordinated by it.)

These trials are being monitored by an “international collaboration” of research teams at three universities: Boston College, Cambridge University, and University College Dublin. The Boston College team is led by work-time/leisure-time guru Juliet Schor, author of the 1991 bestseller The Overworked American.

A number of reports have been published, including one “global” report covering all six countries, and separate reports for the UK and Ireland]. A report on the Australian trial is promised for April.

The latest report from the 4 Day Week Global organisation.
The latest report from the 4 Day Week Global organisation. 4 Day Week Global.

Overall, these reports have declared the trials a “resounding success” – both for employers and employees.

Employees, unsurprisingly, were overwhelmingly positive. They reported less stress, burnout, fatigue and work-family conflict, and better physical and mental health.

More significant were the employers’ responses. They have generally reported improved employee morale and no loss of revenue. Nearly all have committed to, or are considering, continuing with the four-day-week model.

Four big questions

The trials do not, however, answer all the questions about the viability of the four-day week. The four main ones are as follows.

First, are the research results reliable?

Employers and employees were surveyed at the start, halfway through and at the end of the six-month trials. But only about half of the employees and two-thirds of employers completed the vital final round. So there’s some uncertainty about their representativeness.

Second, did the participating firms demonstrate the key productivity proposition: an increase of almost 20% in output per employee per hour worked?

The firms involved were not asked to provide “output” data, just revenue. This may be a reasonable substitute. But it may also have been affected by price movements (inflation was on the march in 2022).

Third, for those firms that achieved the claimed productivity increase, how did it come about? And is it sustainable?

Proponents of the four-day week argue that employees are more productive because they work in a more concentrated way, ignoring distractions. A much longer period than six months will be needed to establish whether this more intense work pattern is sustainable.

Fourth, is the four-day model likely to be applicable across the whole economy?

This is the key question, the answer to which will only emerge over time. The organisations involved in the trials were self-selected and unrepresentative of the economy as a whole. They employed mostly office-based workers. Almost four-fifths were in managerial, professional, IT and clerical occupations. Organisations in other sectors, with different occupational profiles, may find increased productivity through more intensive working difficult to emulate.

Take manufacturing: only three firms from this sector were included in the large UK trial. Since manufacturing has been subject to efficiency studies and labour-saving investment for a century or more, an overall 20% “efficiency gain” to be had across the board seems unlikely.

The productivity gains achieved in office environments may harder to replicate in other settings such as manufacturing.
The productivity gains achieved in office environments may harder to replicate in other settings such as manufacturing. Shutterstock.

Then there are sectors that provide face-to-face services to the public, often seven days a week. They cannot close for a day, and their work intensity is often governed by health and safety concerns. Reduced hours are unlikely to be covered by individual productivity increases. To maintain operating hours, either staff will have to work overtime or more staff would need to be employed.

As for the public sector, in Australia and other countries “efficiency savings” involving budget cuts of about 2% a year have been common for decades. Any “slack” is likely to have been already squeezed out of the system. Again, reducing standard hours would result in the need to pay overtime rates or recruit extra staff, at extra cost.

So what now?

This does not mean the four-day week could not spread through the economy.

One scenario is that it could spread in those workplaces and sectors where productivity gains are achievable.

Those employers and sectors not offering reduced hours would find it harder to recruit staff. They would need to reduce hours, perhaps by stages, to compete. In the absence of productivity gains, they would be forced to absorb the extra costs or pass them on in increased prices.

The pace at which such change takes place would depend, as it always has, on the level of economic growth, productivity trends and labour market conditions.

But it is unlikely to happen overnight. And, as always, it will be accompanied by many employers and their representatives claiming the sky is about to fall in.The Conversation


*Anthony Veal, Adjunct Professor, Business School, University of Technology Sydney. This article is republished from The Conversation under a Creative Commons license. Read the original article.

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28 Comments

This and AI will likely render 1/3 of current jobs obsolete by the end of the decade.

End of the day everything I do is based on materialising volume and 4 days means 20% less revenue.

I spose I could just raise prices that much and sit home.

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As far back as I can remember, I keep hearing how all the jobs will be obsolete in 10 years. I have been hopeful to live this so called leasure life for the last 30 years.

Yet here we are, record employment with a workforce almost twice that of the 80s, worker shortages, and people clammering to lift the retirement age.

With all these technological marvels, retirement is still but a dream for many of the younger generation, who fully expect to work until they die.

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Not jobs in perpetuity as a human mean to support themselves, just current jobs.

Neoliberalism promised exciting high paid jobs to replace the icky yucky manufacturing jobs. Instead we got a bunch of low paid retail and service jobs paid for by credit cards.

AI will see mass layoffs in white collar jobs requiring brainpower. There will be increases in GDP, and some higher paid jobs will arise that profit from AI. But for most, it's more likely menial jobs machines can't replace yet, coupled with some sort of state breadcrumbs.

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Given our population demographic decline, that would bring jobs in line with workers.

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The problem with that argument is our workforce isn't ready to deploy advanced tools such as AI due to lack of training and poor educational outcomes.

Hard to use migration as a workaround for much longer since our ability to attract talent by outbidding more successful economies continues to rapidly diminish.

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I was associated with negotiating, and working, a four-day week. In Australia, in 1979/80. It was a factory situation; the quid pro quo was to work staggered smoko's, keeping everything running. 44% increase in output (a 10 minute smoko never is 10 minutes) (yes, that could have been done over 5 days). Interestingly, most folk then wanted to work Friday overtime; not capable of using leisure time constructively and craving more money...

Otherwise, this article is - as usual from an economic-type - flawed. Labour is currently being asked to take the place of a reducing net energy supply, a phenomenon which is global. This suggest MORE work required per head, not less. Also, the reduction in net energy foreshadows the demise of our consumption-based system; it will collapse, my guess is well within 10 years. Hard as it is for folk to get their heads around the implications of that, 'working week' is a concept which will be in the rear-view mirror. I suspect we will be working to fit nature; making hay when the sun shines....

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 I suspect we will be working to fit nature; making hay when the sun shines...

It could turn out that way, but my gut tells me that human nature will get in the way of that. Traits such as greed, fear, exploitation etc, while not prevalent in  all, are always present. All we have to do is look at the level of lobbying to parliament

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I spent most of my working career in 24/7 multishift operations, in a mix of NZ SMEs & multinationals, ethnicities & genders. Over that time I experienced & managed many alternatives.

Peoples overwhelming preference is for fixed shifts, not rotating. This is for reasons of managing their domestic lives (partners on different shifts to manage childcare) as well as their biorythyms (some people function best during “day” or “night”). Split shifts of 4/5 hours in the evening were also extremely popular, particularly for women with families & students.

By far the most popular shift pattern we introduced was a fixed shift, 37.5hour 3day week. 3x12.5hour shifts 6am to 6.30pm & 6pm to 6.30am (30 minute shift handover). 4 shift teams to cover the 7day week (the 7th day is always the next rostered team so the days worked go through a cycle over several weeks).

The operation ran continuously so we also empowered our teams to manage their breaks, however while nominally a 10 minute break for smoko & 30 minutes for meals (paid meal breaks in shifts) we weren’t anal about timekeeping as long as the work continued. Peer pressure from the team kept it tight. This empowered team approach was also used for training, meetings etc

There were many advantages seen: for eg with taking a 3d “week” leave up to 9 days break could be had. From an employers perspective the lengthy rest period resulted in additional cover always being available for sickness & leave (our teams were empowered to manage their own leave within boundaries).

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12.5hr shift sounds like absolute hell... surely productivity wouldn't be high after say 6-8hrs...

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We used a lot of technology in the manufacturing processes (because labour was the biggest cost), the physical side was therefore limited & people rotated around on those tasks within the teams. Average service was ~20years so people were both experienced & conditioned. Fixed, non rotating shifts make a huge difference.

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Most people in the company I work for want a six day working week so they can pay the mortgage and buy food for their family. But lets just ignore that and focus on the ridiculous ideal of "the four day work week". If the govt actually wants to help these people they should adjust the income tax brackets. Nothing else will work.

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Oh dear, the ideology is strong in that one.

Not sure we can discuss, I am being....

Donny, think of your activities as being on, say, C-deck of the Titanic. The water seeping into your carpets, is actually a symptom of a bigger-picture problem. Here's some homework:

https://www.amazon.com/Overshoot-Ecological-Basis-Revolutionary-Change/…

https://www.goodreads.com/book/show/331227.A_Short_History_of_Progress

https://www.penguin.co.nz/books/a-banquet-of-consequences-9781760141714

Identifying driven vs driver; inevitable vs changeable, is getting ever-more important; good luck however you play it. I put food on the table by growing it, largely - just a thought.

 

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Talks about someone being hooked into ideology.

Instantly devolves into their own circular ideological thought pattern.

Too bad we can't run a car on irony.

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Just pointing out that the paradigm we will be 'working' in, will be different. And that that has to be kept in mind.

A classic example of not keeping it in mind, is the Green assertion that we just need to go to work in public transport, or walk or bike, and everything will be hunky-dory. Got to what, why? is the question they fail to ask, and in failing to ask, they invalidate their assertion.

In a powerdown world, local will be the key word; less movement of people and stuff. And in a world of lower supplies of surplus energy, most of the so-called 'jobs'  in cities, won't be in demand. They'll have been triaged. Which would suggest a lot of leisure time, except that the fact that labour will increasingly attempt to displace the reducing FF energy (more workers per acre in food production being an obvious one)  and so we will likely be ' working harder' - just on more essential stuff.

Context...

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What does this look like long term as the article mentions. employees that have never worked 5 days and are used to the 4 day work week. No gains from them as 4 days is normal and they don’t feel rewarded for squeezing more into the 4 days or being any less distracted. It only work for people who are used to working 5 days before and then drop down to 4 days 

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Yeah I was hoping the article would pose exactly this question.

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4d/w @ 10h/d? Many people simply can't when you realise days are only 24h long and you need to:

- sleep 7 to 8h

- get ready for the day (shower, etc.)

- eat 3 meals

- take care of the family (dropping off/picking up kids, spending time with them)

- commute

- do house chores

- exercise

- etc.

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There are wider issues as well.

No good me dropping to 4*10 hours days if schools, daycares, and other "Support" infrastructure aren't open those hours.

That is beside the point though. We are meant to drop from 40-32 hours and keep the same pay.

But most employer trials I have seen in NZ either pro rata the pay down as well or same hours but over less days. i.e. Employers want both productivity increases, and cost reductions.

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Our team is made up of a number of specialists and support staff. We've had 4/11 members of our team trialing 4-day weeks for a while, with mixed results.

They are on different days off, so overall team attendance looked good.

Those who took Monday or Friday off didn't have a big impact on the team, and that has continued.

Those who took middle-days caused significant disruption by being consistently absent on our typically most productive days. It was also noticeable that they no longer had those super-productive days that happen when you've got yourself into the swing of things.

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I'm LMAO as I read this. 'You will continue to be paid 100% of your wages in return for working 80% of the hours but maintaining 100% production'. Such ideas may hold currency in corporate, academia, government, and other rareified ivory tower venues where your revenue accountability is disconnected from reality. The reality is that most businesses in New Zealand are SMBs, who cannot afford to pay people for being permanently absent. So when the phone rings, or a customer turns up at the counter to be served, how is the absent employee that I am paying meant to be 100% productive? - do I as the business owner make up the 20% of their missing time from all that spare time of my own that I have, and handle the customer myself while the employee hugs the duvet closer at home and I pay them to snore?  The whole idea is laughable. Businesses will pay people for 4 days of work if thats what employees want to do. We are a very flexible employer and allow people time off for all sorts of personal and family needs, with no cost to them, but the idea that we would pay people to not be there by right doesn't hold economic water and is just another holdover from the Covid belief in magic money raining down from the 'benevolent with other people's money while your house shoots up in value making you wealthy by producing nothing'. Dose of reality needed here.

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Yep. The whole idea is ridiculous. Another go woke go broke idea

It may work for some select industries where you have a fixed set of tasks and you can squeeze more work into less time, as example a company that makes cardboard boxes or has fixed orders of certain sizes.

But, it does not work for service industries, like construction for example, as that industry is so completely disorganized and reliant on different companies completing one task before someone else does the next that the four-day week would be a non-starter.

Similarly for industries that require 24x7 support for their clients. You cannot anticipate what people will need outside of the four days so you cannot do all the work within 4 days, because what happens if your customer requires service on day 5. The only thing to do is then hire 20% more staff to provide capacity for those services and pay the other 80% of staff 20% more money. If your competitors don't do the same woke rubbish then you lose your customers due to your services costing more money and eventually you lose your business.

So, unless everyone does it, the whole thing is pointless.

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Point taken. SMBs in NZ often dominate economic sectors with low capital penetration, i.e., businesses require labour inputs to drive output. Even larger corporations and public agencies use lower-paid workers/contractors to do much of their grunt work as the go-to instead of deploying capital-saving technologies.

Check out INZ's long-term skill shortage list: other than the obvious IT workers and engineers, I believe most occupations fall under the boots-on-ground category - doctors, nurses, surgeons, construction workers, teachers, etc.

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Studies have shown that the average office worker spends 2.5 hours of their day doing actual work. a 20% increase in productivity isn't that much really. 

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It does work though for some workplaces, especially those where you have to engage your brain a LOT.  I work in one of those industries and I tell you, I could easily drop a day and be just as productive, cos by the end of the week my brain is pretty fried.  So instead, while at work, I work at 80%, knowing I have to keep some in reserve for the last day.  If I dropped to 8h a day, 32h a week (like the French seem to have done for a decade or so), I would likely be at 100% all of the time at work instead and take the extra day off.  Or what I might do, is work a physical job for that last day (maybe in the same company) to mix things up a bit and get a better understanding of what happens on the frontline.  Or I could volunteer in the community, building bike tracks or planting trees or similar.

That's why businesses are reporting successful trails in those professions (I know a few people in them).  The people I chat to doing it are saying exactly what I have above, they are just as productive in 4 days, but they are now also SUPER loyal to their workplace and have arranged their lives around it.  For instance, a guy I know has Fridays off now, so does school drop off/pickup, cooks dinner, exercises and manages to volunteer a couple of hours on the day too.  He is both fitter/healthier has a better relationship with his family so mentally less stressed, more engaged with the community too.  He has no idea how he would go back to doing 5 day weeks.   Another woman I know in the same workplace does similar and also now volunteers to teach coding to kids as a result of less hours and gets immense satisfaction from it. 

Hard to know if we all went 4 day weeks though, whether it would bring the same benefits overall. As these people are outliers at the moment, if all of society was arranged around a 4 day week, everything might go back to being like it is now.  But remember productivity is all that matters in the long run, so a huge improvement in it, even if its forced, probably isn't a bad thing.

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This should be a decision for the employer and employee. 

We don't need the govt involved here. 

 

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Meanwhile in China it's 996. We are in dream land. Employees of the public sector and the oligopolists who live off our taxes directly or indirectly. Telling us they want to keep their already overcooked salaries but to work even less than they do now. Half of the 700 back office staff of the Warehouse Group in Auckland will be getting a don't come Monday email soon. Let that be a lesson on the impacts of recession. 2022 was last year.

I pity the department manager that raises this in the next meeting. Basically you are telling the shareholders you could run with 20% fewer staff and not impact the business.

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You do realise that Henry Ford pioneered the 40hr work week because it INCREASED productivity over the 60-odd hour one that was in place. 

In jobs that require lots of thinking or relationship building to achieve outcomes, less time quality time over quantity often results in better outcomes. Shareholders should follow productivity outcomes and leave the methods to management. 

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1: I work front line health care. Sure, the upcoming wave of AI will help with some of the thinking, but I just cannot see how I will do 40 hours of Healthcare delivery in 32 hours.

2: If this is adopted, in about 10 years workers'  incomes will have slipped by about 25% as employers just adjust what they pay to the new normal.

3. If admin and management effectively get a 20% $/hour pay rise, what about those people in occupations where the 4 day week doesn't work. Those occupations become very unattractive. 

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