By Joanna Powis & Alison Heaton of Reed Smith
The idea of a four-day working week is gaining momentum in the UK. Last month, the not-for-profit organisation, 4 Day Week Global, reported the results of its six-month UK trial. With 92% of reporting companies confirming they will continue with the four-day week, the trial has been reported as a resounding success. In this article, we review where the four-day working week movement may go from here and what employers should be thinking about now.
What is a four-day working week?
The UK trial typically involved working hours being reduced to 80% (or full time employees working 4 out of 5 days a week) crucially without any drop in pay. The expectation is that productivity matches or even exceeds usual standards.
There are numerous ways to structure a four-day working week depending on what best suits a particular business, including a whole business shut down on one day, staggered days off or different sets ups for different teams or times of the year (e.g. to meet seasonal demand).
Why is a four-day working week becoming increasingly popular?
Coming out of the pandemic there has been an increased focus on work life balance, mental health and wellbeing, and employers’ roles in supporting employees on these fronts. Employers in some industries have also seen a talent war emerge as they find it harder to recruit and retain the best talent.
These conditions have arguably assisted the four-day working week in gaining momentum. Happy employees enjoying a healthy work life balance are less likely to fly the nest and join the so-called “great resignation”. For the moment at least, offering a four-day working week is also sufficiently unusual that it is likely to give a competitive advantage when recruiting new talent.
If it is correct that productivity is not negatively impacted, a four-day working week provides a way to recruit and retain without the cost burden of increasing salaries. It also offers cost savings in terms of recruitment costs and, potentially office running costs and, for some employees, potentially childcare costs. Of course, the more companies that make the move, the more pressure other employers in the same industries may feel to do the same.
Other benefits include reducing carbon footprint due to less frequent commuting and a potential social impact if employers use their time off for voluntary work. There is also a view that a four-day working week could improve equality by better enabling employees with caring responsibilities to manage those responsibilities around work and therefore remain in the workforce.
What were the conclusions of the trial?
The UK trial involved just under 3000 employees across 61 organisations. The headline results were as follows:
Company revenue stayed broadly the same over the trial period, rising by 1.4% on average
There was a 57% drop in staff leaving over the trial period
There was a 65% reduction in absenteeism (i.e. sick and personal (non-holiday) days)
54% of employees said it was easier to balance work with household jobs
39% of employees were less stressed
60% of employees found an increased ability to combine paid work with care responsibilities
62% of employees reported it was easier to combine work with social life
However, it is important to note that these statistics are based on a relatively small pool. The survey response rate from the participating employees was only 58% by the end of the trial and in some cases, the no/negative change was greater than the positive story. For example, whilst 39% of employees reported being less stressed by working a four-day week, 48% reported no change in their stress levels and 13% reported increased stress. The retention and absenteeism statistics may also be skewed by the small populations involved.
What is the likely impact of the trial?
Whilst there is certainly support for the four-day working week and some early adopters, our expectation is that we are unlikely to see a mainstream shift to four-day working by UK employers, at least in the short term.
Participants in the UK trial tended to be smaller sized businesses, particularly from creative industries, and not for profit organisations. For example, 66% of trial participants had fewer than 25 employees and only 12% had over 100 employees. No ‘big name’ employers took part and we have not yet seen larger, more traditional companies adopting a four-day working week in the UK.
The reality is that moving to a four-day working week amounts to a seismic cultural and operational change for many businesses. It is difficult to see how some industries could actually make the change based on current structures. For example, shift based industries, such as retail and restaurants, may find it very difficult to reduce shifts without reducing pay. A four-day working week could be administratively difficult to manage in organisations such as schools and arguably would not work, at least without a major re-think, for industries that operate on a time rather than output basis (e.g. some professional services).
There are also a number of practical and legal considerations for employers to grapple with regarding implementation – please see our previous article for more information. A sensible employer will operate a trial period and consult with employees on operational details before making a permanent change. Measures will need to be put in place (if they do not exist already) to measure productivity so the business can assess the impact of the change on the business. Retaining the right to revert to a full working week is also a good idea.
What is next for the four-day working week?
In reality, the pace of change will likely be slow. However, the world of work looks very different now to how it did pre-pandemic, so employers would probably be unwise to ignore the four-day working week movement completely. It may be that in the shorter term we see organic growth, starting with small businesses and those in particularly agile and output driven sectors, with the momentum possibly building over time.
The four-day working week movement may also encourage employers to look at other ways of improving flexibility and work/life balance, for example, by moving away from the traditional ‘9 to 5’ in favour of genuinely flexible working patterns, or introducing no meeting days or rules on contact with colleagues outside of certain hours.
It will also be interesting to see what impact the political situation has on working hours. The current government has announced reforms to the flexible working legislation, and a 32 hour working week formed part of Labour’s 2019 election manifesto, so we may see this area receiving greater focus as we move closer to a general election by January 2025.