Can Your Business Afford a Four-day Week?
The recent trial of a four-day week by 1,000 employees across over 30 companies has been hailed by many as a resounding success. Companies rated the trial a nine out of 10, expressing extreme satisfaction with their overall productivity and performance. In addition, revenue increased by more than a percentage point each month, with a total rise of 8% during the trial. Compared to the same six months in 2021, it rose by 38%.
Also, employees' experiences were overwhelmingly positive, with 97% saying they wanted to continue with a four-day week. The participants were asked about the value of the exercise, and 70% stated their next job would have to offer similar working structures, which speaks volumes about how recruitment is changing.
A wide range of wellbeing metrics showed significant improvement, including stress levels, burnout, fatigue and work-family conflict. Physical and mental health also improved, alongside satisfaction across multiple domains of life which may be linked to people getting better sleep and more exercise.
With Employee Experience (EX) climbing to the top of the strategic planning agenda, business leaders need to get their working practices right to attract and retain the talent they need to innovate.
Charlotte Lockhart, Co-founder of 4 Day Week Global, believes this is only the beginning. "When our co-founder Andrew Barnes and I first witnessed the benefits of the four-day week in 2018, we knew we had to share our learnings. The results laid out in our report further prove what we already know, and we look forward to expanding this research over the coming months, as other organisations from a range of industries and economies make the switch to reduced-hour, output-focused working. Change is imminent and I commend all involved in this trial for making history happen," she said.
A successful working week can look and feel vastly different for different individuals and businesses. Having trialled a nine-day fortnight (giving everyone a day off each fortnight), and then following assessment and feedback we evolved this into a 4.5-day week (everyone finishes at 1pm on Fridays). Organisations should embrace change but should first examine what will work for them and their people. The answer here lies in interrogating your organisational goals as well as listening to your colleagues. One of the most dangerous things you can do is make fundamental changes based on assumption.
Neo work We spoke to Chantel Emilius, Executive Director of Culture and Engagement at Freedom Services Group. She was responsible for the rollout of their four-day working week in July 2022, which became a permanent fixture this year. The scheme has been hugely successful, showing measurable success and great employee feedback. Some key outcomes of the initiative included the following.
Decrease in staff turnover to 6% from 31% in the period since the trial was implemented.
Out of the Freedom workforce, 80% have now opted into the programme. This is 5% up since inception.
Overall productivity has increased by 12.4% in the operations areas, including improved customer service performance.
In the last quarter, they received 51 new starters, with feedback that the four-day work week and other flexible work arrangements are critical factors for them considering Freedom over other insurance companies.
Is the four-day week inevitable, given the massive shift in how workforces are now organised? “It depends on your business type, but it's inevitable given the positive outcomes shared by businesses who have already rolled this out. Our experience implementing the four-day week has shown that it's switched everyone's focus, increasing motivation and productivity. Starting in July 2022, we piloted a six-month trial of a four-day working week with the same pay level, decreasing our staff turnover rate from 31% to 6%.
“We also saw overall productivity increase by 12.5% in our operational areas! As such, the scheme has become a permanent fixture this January. We operate on a rotational basis, ensuring our customers’ needs are met as someone from each department is available when necessary. Our employees are coming in more refreshed with new creative ideas. In the four days that they are at work, they have more of a strategic focus on their tasks and perhaps more importantly, the empowerment to prioritise their own workload.”
Post-pandemic, workers are paying more attention to their wellbeing. But does this also mean a re-evaluation of their work and how it connects with other aspects of their lives? “Everyone re-evaluated their lives post-pandemic, and employees realised they don't need to be confined to a 9–5 job working from an office and getting stuck in daily commutes. As an organisation, Freedom took this as a learning, and we adopted hybrid working. If people want to come in and work from an office, we have hot-desking to facilitate this. If people want to work from home, they also have the option to do this. But, of course, this is always balanced with commercial needs, so individuals must hit their KPIs. The four-day week enhances the wellbeing of all employees that choose to be part of the scheme, they feel more rested and have time for more self-care.”
A component of the four-day week is more remote working, as workforces take more control. Are businesses prepared for this shift? “As a business, there is always a balance. You can work from wherever and take the four-day week as a benefit if you hit your KPIs. It's about collaboration and trust and employees and employers working together to get the best result. Due to the pandemic, we had already changed our staff to remote work, as I'm sure many businesses did. Therefore, we were already prepared for this shift and didn't reverse it back when restrictions were lifted.”
Is the social aspect of working in central locations a significant loss, as workers reduce their hours and move to more remote working? Is the four-day week impacting business culture? “Covid-19 impacted most business cultures, and as we move out of that post-pandemic, the onus is on the business to adapt and think of new ways to engage employees. At Freedom, we have set up HPTs (health protection teams) from all areas of the business to get feedback, staff surveys on what more we could do and bi-weekly virtual staff lunches so everyone, no matter of location, feels part of Freedom. We also have various engagement pieces across the business to ensure we all remain connected.”
As supporting wellness, mental health and EX, in general, is a focus for businesses, is recruitment also being impacted by these factors? “When recruiting, we have found that people are opting to join Freedom over competitors and have noticed that the four-day week plays a major factor in their decision to join the business. We have a team of trained Mental Health first aiders and have just added a bolt-on to our HR system, which provides every employee access to counselling should they need it. Due to this, recruitment is impacted positively.”
Ultimately will all businesses have to adapt to shorter hours — at least in a central office — to attract and retain the talent they need to innovate and remain sustainable enterprises? “It would depend on each business, but certainly from both a recruitment perspective as I mentioned above, we have seen a positive impact on our talent pipeline. From a customer perspective, our daily operating hours have extended, customers have more time each day to contact us, and we have found our customer service operations have improved in efficiency. Ultimately, we do believe that taking a human-centric approach at Freedom has delivered great results. As the environment we operate in continues to change, staying close to the needs of our people and our customers will be key to the longevity of the business.”
Hybrid workforce A shorter working week seems inevitable, according to research from the Chartered Institute of Personnel and Development (CIPD), which concluded that over a third (34%) of businesses they contacted expect a four-day week to become a reality for them within the next decade.
“There is the potential to boost productivity by raising the quality of people management and development in the UK, particularly among SMEs and through supporting employer investment in technology across the economy,” the CIPD concluded. “This involves focusing on industrial strategy and making changes to skills policy. It will also require a change in the quality and availability of business support, to boost firms’ adoption of technology and build their people management and development capability.”
If a four-day week is to become a reality for most businesses, the transition must be managed to ensure minimum disruption. Companies have already begun to make the switch to mass remote working. Shifting to new patterns of work demanded by their employees must be handled with care. And, of course, a four-day week may not be appropriate or even wanted by everyone. Here, HR has a vital role to play in ushering in this new working structure.
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