The 4-day working week – what does this mean for UK businesses?
Many business owners across the UK will have raised their eyebrows again this week as the 4-day working week is back in the headlines with the start of the global trial bringing this concept closer to reality for some businesses. And it is an exciting concept: full-time employees working four days a week instead of the traditional five, with no reduction in salary.
As one online commentator posted on the subject: ‘I swear to god if you’re a part of this, you better not f*** it up for the rest of us’!
WHAT EXACTLY IS THIS TRIAL?
The UK 4-day week pilot programme, which started on Monday 6 June, is a 6-month trial being coordinated by 4 Day Week Global in partnership with UK think tank Autonomy and the 4 Day Week UK Campaign. It is being run alongside similar pilot schemes in Ireland, the United States, Canada, Australia and New Zealand, making it the world’s largest scheme of this nature. In the UK around 70 companies and over 3000 employees are taking part in the experiment, which will be supported by academic researchers from Oxford and Cambridge universities and Boston College in the US.
And that’s largely what this trial is about at this stage – an academic exercise, to see whether it is possible, on a large-scale basis, for employees to reduce their hours to 80% whilst retaining 100% productivity. During the trial, the researchers will work with each company involved to measure the impact of productivity and performance in the business, as well as interviewing employees to gauge the impact on wellbeing, including levels of stress, job and life satisfaction, health, sleep and other factors. The campaigners plan to compile a report which they can present as a test case to governments and business leaders, with a view to encouraging a change in thinking around the way people work.
A new way forward?
The concept of working a reduced hours week for full-time pay is by no means a new concept. Several countries around the world have trialled similar schemes in recent years, with one of the most comprehensive studies coming out of Iceland. Between 2015 to 2019, researchers in Iceland conducted test cases of a 35-36 hour working week, without reducing pay. The study concluded the trials were an ‘overwhelming success’ with productivity and service provision remaining the same or improving across the majority of trial workplaces. Since then, almost 90% of Iceland’s working population have reduced hours or the option to shorten their hours. This even led to the Labour Party including the implementation of a 4-day working week for UK workers in their manifesto for the 2019 election. They didn’t win.
There are two ways that a 4-day working week can be achieved. The first, which is less radical and already available to many employees in the UK, is to compress working hours over four days instead of five. But on a 40 hour working week this means working 10 hour days, which for many people isn’t practical, sustainable or healthy. Campaigners argue that the detrimental impact on wellbeing and productivity often associated with this type of 4-day week is counterproductive.
Instead, they propose a ‘true’ 4-day week; where the number of hours for a full-time worker drops to 32 hours per week, and employees still hold full-time employee status, with no affect on salary, National Insurance or pension contributions. They argue that better rested staff are generally happier and more motivated, less prone to stress and other sickness absence, leading to a boost in productivity and engagement. According to campaigners this would be good for employees, good for businesses and the economy, and even good for the environment.
Of course, there are two sides to every argument in the for and against camps. From a business perspective it is easy to see the logistical challenges that moving to a 4-day would present. Businesses would need to ensure they have enough staff working throughout the week to maintain their basic operations and in certain industries, such as retail and hospitality, business owners might be forced to choose between employing more staff or reducing their opening hours, neither of which sounds very good for the bottom line. And then of course there are sectors where reducing opening hours is not an option, such as health care and other public services. The result – this could be a very costly transition to implement and in the current economic climate it is difficult to see the appetite for such an overhaul outweighing the practical and financial realities.
However, if we have learnt one thing over the last two years of Covid-led changes to working practices and daily routines, it’s that peoples’ attitude towards work-life balance is changing. In fact, it has changed, considerably. With the accelerated trend to home working arrangements, and the realisation for many people that working long hours in an office is not how they want to spend their lives, the transition is underway. The 4-day week may be the next step in that transition, but for most workers in the UK, it’s probably a little early to get too excited, for now.
If your business is considering a change in working hours, patterns or practices and you would like to discuss how such changes might be implemented for your workforce, contact us to arrange a consultation.