The Future of Work - is four the magic number for the Vaccine Economy's working week?

Profile picture for user catheverett By Cath Everett August 26, 2021 Audio mode
Summary:
Moving to a four-day week isn’t as simple as it sounds, but here are two digital companies that are already seeing the benefits.

fingers

Why do we work five days a week? Henry Ford is credited with creating today’s standard of a five-day, 40-hour week after introducing the idea across all his automotive factories in 1926, cutting the average working week by a full day in the process.

By the 1970s though, a number of employers had taken his progressive approach a step further by implementing a four-day week instead. Since then, the concept has drifted in and out of the headlines, making its latest resurgence during the early days of the pandemic.

New Zealand’s Prime Minister Jacinda Ardern was the first to put it firmly back on the agenda in May 2020  when she suggested local employers should consider the move as a way to boost tourism and help staff address persistent work-life balance challenges.

Other advocates have since joined the debate, ranging from Iceland through to Spain, now the concept’s latest backer. It is planning to introduce a three-year, €50 million ($58.9 million) pilot project in September, which will be financed through the European Union’s Coronavirus Recovery Fund.

The aim is to have up to 400 companies volunteering to reduce the working week of all or part of their workforce to 32 hours, with the government picking up any spike in admin costs. Telecoms giant Telefonica has already signed up to a three-month trial, starting from October, in which staff can get involved on a voluntary and role-dependent basis in exchange for a 15% pay cut.

The rebirth of the four-day week

So why is the idea experiencing such a renaissance right now and what benefits can it offer? According to Kelly Perry, Senior HR Business Partner at global affiliate marketing network Awin, it all relates to the increasing importance employers are attaching to employee wellbeing:

Over the years, there’s been an increasing shift in both work and society to focus on issues around mental health, physical wellbeing and work-life balance, and that conversation’s been at the forefront in a COVID context. Lots of people having to work from home has challenged the perception that we all need to be in the same building to be productive. So people are now feeling more comfortable with not being in the office, and the four-day week is a natural progression of that.

Pre-COVID, the digital business had trialled remote working in various different formats, but during the pandemic last year decided to shut the office from lunchtime each Friday in order to give staff time to “decompress”. After discovering the move had no impact on productivity or client satisfaction, a six-month trial of four-day working followed at the start of January, with the support of various taskforces and a volunteer team of 150 out of a total workforce of around 1,200. The project’s formal roll out began in July.

The idea, says Perry, was to take a bottom-up approach to the initiative, but at the same time develop a consistent framework of operational guidelines across all territories. These guidelines are “flexible as possible within legal boundaries” rather than being based on a range of complex and restricting policies and procedures.

For example, staff are expected to work 30 hours over four days without any reduction in salary or benefits, such as annual or sick leave, and are given the option of taking either a whole or two half additional days off per week – which also covers public holidays. Line managers are expected to set expectations and negotiate with individuals over what works best for them, the team and the wider department.

Performance, on the other hand, is measured by means of competency frameworks, regular reviews and the use of clear KPIs, such as revenue growth and client satisfaction and retention. Qualitative feedback, ranging from employee engagement surveys to all-hands meetings, is another important part of the mix in order to provide a more rounded picture of attitudes and outcomes.

How to get it right

Key contributors to success when going down this route though consist of upfront thinking and planning, having the right culture in place and supporting line managers in making the transition, Perry believes. Also important is ensuring that individual workers are accountable for their own actions and for improving the efficiency of how they work. She explains:

I don’t think this approach would be very successful if there was a micro-management culture and the senior management team was the sole decision-maker. It’s about giving people the power to make their own decisions and pave their own way to success. The focus of the HR strategy may be on development, wellbeing, engagement and providing opportunities, but employees have to take them and meet you halfway.

Another important consideration is being able to adapt as an organisation:

You can only plan so much as you don’t 100% know how things will work out until you’re up-and-running. But having plans to test different scenarios helps, and being flexible and agile is super-important.

So far the move has brought about no falls in productivity at Awin, with most measures showing it has stayed the same and even improved in some instances. The reason for this situation, Perry believes, is that:

Giving people back time helps them de-stress, which according to the research makes them more productive on the days they do work. If you’re tired, your brain works more slowly, but if you’ve got lots of energy, it works more quickly. So the extra time off means people are less tired and so get more done.

Attracting top talent

Legal software supplier Arken.legal, meanwhile, introduced its approach to the four-day week at the start of October last year, following a nine-month trial. The pandemic had acted as a catalyst for change at the company too, although the key driver in its case was a desire to attract top talent. As CEO Dave Newick says:

As a smaller organization, it’s important to find ways of hiring and keeping great people and if you look at it through that lens, the four-day week is a powerful part of that, but you need to be an early adopter. It’s about offering attractive propositions when you’re competing with high salaries, equity and big benefits, but the underlying premise is that you’re either a company that believes people are your best assets or you’re not.

As a result of the move, all full-time employees now take Friday off - apart from two support staff who have Monday as their extra day instead - while still receiving their full five-day-a-week salary and benefits. Newick explains the rationale behind the approach:

A fully-flexible model didn’t work for us as we consider culture and collaboration important and want people to feel connected to the company purpose. So we want people to be able to come into the office to collaborate and if one person was taking a Tuesday off and the other a Wednesday, it wouldn’t really work.

Productivity is measured in terms of outcomes rather than a maximum or minimum number of hours, although, as Newick says, most people would “struggle to do less than 32 hours” and get everything done. As a result, he acknowledges, it is all about working “at pace and with focus to achieve that”:

To this end, the company has implemented a “more agile process for measurement to help staff understand what productivity means”. A system has been created in the company’s CRM suite, which allocates points to tasks based on the anticipated time it should take to complete them. Each staff member is expected to get through 40 points in four days. Newick says:

It’s not an exact science and there are ‘gotchas!' because things happen, but we try to minimize those as much as possible as it’s where we get efficiency gains.

Reaping the benefits

Other important means of boosting productivity include minimising time-wasting on activities, such as superfluous meetings, and accelerating the firm’s existing investment in automating low value tasks. The aim here is to ensure “time is spent on the stuff that matters”. Examples include an increased focus on automating DevOps activities and payment and reporting processes.

As for how best to ensure a successful four-day week implementation, Newick advises including employees in the process from the outset:

Put together a working group with staff members from across the business and review often so you can tweak and change things. It’s important to listen to people’s concerns and give them time to adapt, and also share personal stories. For example, after six weeks, my managers came to me and said: ‘Are you engaging with this yourself as you’re still sending people emails on a Friday?’ That was me adjusting to the idea that we don’t have to work for five days, and they were right to challenge me as it can take time to adjust.

He acknowledges though that the need to “work at pace and do five days work in four” is not for everyone and a couple of employees have left as a result because the approach was not for them:

If you’re the kind of worker that’s more methodical and likes to do one thing at a time and completely finish something 100% of the time, you’ll struggle - and some people did find it hard to adjust to. But that’s more about ensuring you have the right people in the business.

Nonetheless, over the next three to five years, Newick expects the four-day week to become the default working structure, particularly in tech:

You give your staff the opportunity to take more of their life back. It’s the best and biggest gift you can give and the real benefit to the company is you get a very deep connection as it really matters to people.

My take

The four-day week experiment is still very much in its early days. But it is now being seriously considered for knowledge workers in a much more extensive fashion than it ever was pre-pandemic as part of a wider shift to more flexible ways of working, including hybrid. Reactionary voices and talk of it being a flash in the pan are mounting, however, so its future in mass adoption terms is far from assured. And as to how it might go down in corporate America...