80% work for 100% pay: what you need to know about the four-day working week
Three-quarters of UK recruiters say a four-day week will be the norm by 2030, according to research commissioned by NatWest on the future of work. 70% of the SME employers surveyed agreed that reducing the amount of time people were at work, without reducing their pay, was a good idea. And recruiters predict that this is how the market is moving.
The idea of working fewer hours for the same pay isn't entirely new. Between 2015 and 2019, Iceland conducted trials to understand the impact working fewer hours had on employee productivity and wellbeing. Trials involved 1% of the population and took place in schools, the police-force, government departments and in some aspects of the health sector. It's important to recognise though, that these involved reducing hours (in some cases by only an hour or two each week) rather than a four-day working week.
Last month, the UK launched its own six month trial of the four-day working week which involves 70 organisations and is the largest ever trial of its type anywhere in the world. UK employers and workers engaging in the pilot have access to workshops, mentoring, networking, wellbeing and productivity assessments to support and assess the impact of the trial.
However we're already seeing an interest in exploring adopting a four-day working week for employers who aren't involved in the trial - including some from unlikely sectors, such as education.
So what's the appeal for employers?
The challenging job market
Many employers are struggling to fill vacancies. Unemployment is at record low and competition for talent at an all-time high. And, employees whose skills are in demand are becoming increasingly choosy about which offer to accept, with many opting to work for those organisations with strong environmental, social, and governance (ESG) credentials.
Many employees want to work flexibly and it's becoming common to see many roles advertised as hybrid. But it's not just about being able to work from home; increasingly employees want employers to take active steps to support their health and wellbeing. Reducing the amount of time they are required to work without reducing their pay is likely to score highly on most people's wish list (what's not to like from an employee perspective?) and make it easier for you to attract and retain staff.
We are also in the middle of a cost of living crisis and employers are being asked to make make significant pay increases to offset inflationary price increases. Adopting a four-day working week model will give staff a real terms pay increase (working fewer hours means that their hourly rates will increase), plus they will save money if they ordinarily travel to work.
Can the four-day week really work?
The Icelandic study found that shift workers benefitted slightly more than office workers during the trials but all groups saw an improvement in their overall wellbeing. They found it easier to balance their work alongside their domestic responsibilities and had more time to spend on exercising, hobbies and seeing friends and family. But the big reveal was that productivity wasn't impacted, regardless of the type of work involved and, the reason for this, according to the co-author of the report, is that people "unquestionably waste hours at work".
But there are drawbacks too:
1. Allowing staff to work shorter working hours without reducing their workloads, could increase the pressure and stress on employees that already work productively and efficiently. A particular challenge may be reducing the working time of part-timers workers when the hours available to fulfil their role are already tight.
2. You may have to manage a more complex array of working patterns, if you can't simply shut down your workplace one day a week, or employ other staff to cover this (which will increase your overheads unless you raise productivity too). This happened in the Icelandic study where the government had to hire more healthcare workers to provide cover due to shorter working hours.
3. What will you do if you can't maintain the productivity you need to remain profitable, or otherwise meet customer demand?
Alternatives to the four-day working week
It's clearly not going to easy for all employers to adopt a four-day working week. But there are other alternatives which should still improve employee wellbeing without having a negative impact on the service being delivered.
For example, your business may:
- implement a working pattern of nine out of ten days, or working half a day rather than a full day one day each week
- reduce all employees’ daily working hours - even if only by an hour or two
- introduce flexible working policies that move employees from their rigid working patterns and give them the freedom to get their job done at a time that works for both you and them.
An insight into the trial
Our client Charity Bank is the first UK bank to reduce its work week from a standard 35 hours to 28 hours for the same pay and benefits as part of the national trial.
Driven by its socially conscious mission, Charity Bank explains that its participation in the pilot is “based on a whole host of positive benefits that arise from shortening the work week that will improve the welfare of our co-workers in the first instance, and our customers by extension.”
“By valuing productivity over time spent, we aim to bridge the gap often felt between full-time and part-time staff, removing any possible barriers to promotion and progression. We anticipate that the shorter working week will also help us attract a more diverse workforce and encourage people who would previously have been unable to commit to the standard five-day working week to join us. As well as benefitting colleagues, the shorter work week will help us to reduce our carbon footprint through a reduction in the frequency of commuting and by eliminating unnecessary meetings and travel.
The 20th-century concept of a five-day working week is no longer the best fit for 21st-century business. We firmly believe that a four-day week with no change to salary or benefits will create a happier workforce and will have an equally positive impact on business productivity, customer experience and our social mission.”
Charity Bank is piloting the 100:80:100 model, which means that employees receive 100 percent of their pay while working 80 percent of their contracted hours, in exchange for a commitment to maintain at least 100 percent productivity.
Three tips to help you reduce working time without impacting performance
1. Communicate with your staff
If you are going to trial reducing employees' working hours, you'll need to get your staff on-board and discuss with them how you envisage it working, what your expectations are, and how you will determine if the trial has been a success. Clear and honest communication is key. You'll need to consider what model you want to trial and then ask staff for their feedback and suggestions about how to make it work.
If you are not going to offer a shorter working week to all staff you will also need to think about how it's likely to go down with those who aren't involved who will be working more hours than their colleagues on less pay. Will you pay them an additional allowance to compensate them or rotate the trial so that everyone experiences it, albeit at different times?
You may also need to review and make changes to your working practices. Talk to your staff as they may be able to identify easy time savings that you can implement quickly and easily.
If you recognise a union for collective bargaining, you will need to consult with them to try and agree the changes you propose.
2. Implement trial periods and get the contract right
There is no guarantee that the four-day working week will work for your organisation. You must reserve the right to require staff to revert to their usual working pattern after the trial so that if productivity significantly falls (or the trial fails on any other metrics you intend to use) you can do just that.
This requires a temporary change to your employee's terms and conditions of employment. You don't have to issue a new s1 statement or contract of employment, but you must explain in writing to each employee, how long the trial will last, how much the employee will be paid and any other relevant information.
3. Work out how to maintain or increase productivity
There are a number of measures that can be put in place to increase employee productivity including:
- encouraging employees to switch off e-mail or other notifications when working on a large task and setting aside certain times when they can be disturbed
- supporting employees to be more productive by identifying their individual working style. For example, the Pomodoro Technique encourages staff to deeply focus for 25 minutes and then take a five minute break. But that won't work for everyone. There is a very useful (and free) tool to help staff identify their ideal productivity model which you can access here
- having a ‘no meetings’ day once a week to allow employees to focus on the work they have in front of them and more generally to keep meetings to a minimum
- ditching routine tasks that provide little benefit
- encouraging staff to get together at lunch time and during any other scheduled breaks rather than at the "water cooler"
Please contact senior associate Charlotte Sloan if you'd like to discuss how to implement a shorter working week in your organisation. Charlotte has been speaking to many diverse businesses about this issue including some in the FE sector.
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*updated on 7 October to include details of our client, Charity Bank's trial.