Is working less the way ahead? 4-day working week trials in the UK and Ireland

In the UK, more than 30 companies are trialling a four-day working week as part of an international study on how flexible working can improve productivity. The trial, which will start in June 2022, is being coordinated by 4 Day Week Global in partnership with the UK think tank Autonomy, the 4 Day Week Campaign and researchers at Cambridge University, Boston College and Oxford University. In Scotland, a trial is due to start in 2023 and Wales is also considering a trial.

In Ireland, 20 companies are taking part in a similar trial, which started in February 2022.

For six months the employees in participating companies will work 80% of their usual hours. They will not receive any loss in pay but will be expected to maintain the same levels of productivity as when they were working a full five-day week. During the trial, researchers will work with each participating company to measure the impact on productivity in the business and the wellbeing of its workers, as well as the impact on the environment and gender equality.

Similar schemes are taking place in the United States, Canada, Australia and New Zealand. Spain has also signed up to run similar trials this year.

Is this a change to embrace?

The 4-day working week

The four-day working week for full-time pay is not a new concept. In recent years, trials have begun to pop up all over the world. Perhaps the most notable is the four-year trial by Iceland between 2015 – 2019, which has been called an ‘overwhelming success’. It is reported that, since completion, 86% of the country’s workforce are now working shorter hours or gaining the right to shorten their hours.

Some businesses in the UK have already moved to implement this model permanently, with approximately 45 companies accredited under the 4 Day Week Campaign as offering a permanent 32 hour (or less) four-day week, with no loss of pay. Atom bank, the mobile app based bank, adopted the four-day working week in November 2021 for all of its 430 employees, becoming the largest company in the UK to do so.

The future of work

In his Eight Drivers of Change report for the Future of Work Hub, Employment Partner, James Davies explains how the Covid-19 pandemic, alongside seven other drivers for change, has shone a light on employee wellbeing, flexibility, sustainability and shifting values, stimulating an increased focus on the future of work. The world of work is certainly very different to how it was in the early 1960s when it was based on gender-stereotypical occupations and a lack of diversity, typified by white men employed in factories 9am to 5pm for five days a week. James includes ‘working less’ as one of his eight future of work predictions. He says “as a result of evolving values, growing awareness of the health implications of a long-hours culture and increased flexibility…average working hours will continue to decline. Many more people will look to work only part of the week and during hours that fit with their family or other commitments”.

The Covid-19 pandemic has certainly accelerated changes in working practices including an increase in alternative working models and policies that focus on employee wellbeing and flexibility. Hybrid and remote working are now widely considered the ‘norm’. UK research from the CIPD shows that 40% of employers now expect their workforce to work regularly from home after the pandemic has ended – an increase of around 35%. Businesses offering this as an option is on the rise too, with the number of employers that did not offer regular remote working as an option set to fall from 67% to 37%.

Home working during the pandemic also highlighted increasing concern about workers’ need to switch off from a feeling of permanent connection with work, with Ireland, France and Spain introducing right to disconnect legislation, establishing hours when employees should not send or answer emails.

Benefits of the 4-day working week

• Improved productivity is the main motivation behind the four-day working week campaign; basically, how flexible working can improve productivity. Increased productivity is already a proven outcome of previous trials - for example, one undertaken by Microsoft in Japan in 2019 was reported to have boosted employee productivity by 40%. The UK in particular is known for its poor productivity, with the largest ‘productivity puzzle’ out of all of the G7 nations. The people behind the trials are confident that reducing working time in this way will enable businesses to move away from simply measuring time spent ‘at work’, to a better model which places more focus on the output being produced. Joe O’Connor, pilot programme manager at 4 Day Week Global has gone so far as to say that 2022 “will be the year that heralds in this bold new future of work”.

• The 4 Day Week Campaign lists reduced sickness absence, retention, innovation and recruitment as benefits, stating, in relation to recruitment, that “a four-day makes your organisation stand out from others in the field and more attractive for talent”. 4 Day Week Global states that “63% of business found it easier to attract and retain talent with a four-day work week”.

• Corporate brand: The 4 Day Week Campaign states that a four-day working week “is a great way to create a brand that shows your customers that you are a forward-thinking, ethical and socially responsible company”. Sustainability is included in this in terms of reducing “the ecological footprint of your organisation by reducing commuting, and carbon-intensive consumption patterns like buying packaged sandwiches and take away coffees.” In relation to this, a recent UK study has found that a shift to a four-day week by 2025 would shrink UK emissions by 127 tonnes.

• Gender equality is stated as another benefit. The 4 Day Week Campaign states that “women are far more likely to take an unequal share of caring responsibilities, often locking them out of full time, secure, well-paid work. A four-day week creates time for all workers to take on their fair share of caring.” The World Economic Forum has also reported that a four-day week enables care givers to share responsibilities.

Potential drawbacks

• Stress/burnout: Some experts and businesses are concerned that trying to fit five days’ worth of working into four, while expecting the same levels of productivity, (or arguably increased productivity in those four days) could cause more stress and lead to employee burnout. Others query whether staff would genuinely refrain from looking at their work phones or calendars on the fifth day they gain to themselves. There may also be a risk that other wellbeing initiatives are forgotten if employers assume that a reduction in working days is enough.

• Two-tier workforce: Concern has been expressed as to whether certain sectors like banking, media and telecommunications will find it easier to move to a four-day working week than sectors such as healthcare, education and manufacturing, potentially creating a ‘two-tier’ labour force.

• Change management: in the UK the Wellcome Trust dropped its plans to roll out a four-day week when a consultation showed that the reduction in hours would have been harder for some of its employees to manage than others (back-office and support function staff including IT, finance and HR finding the change more difficult than individuals with roles that allowed more flexibility over how they worked).

• Decreased output and profitability: While this could be a concern of employers, as mentioned above, increased productivity is already a proven outcome of previous trials.

Other considerations relating to the 4-day working week

• Changing contracts: making changes to contractual terms and conditions can only be done with the agreement of employees. It is likely that most employers will trial the change before moving to a permanent four-day working week. In this situation, employers should be clear that the contractual change is temporary and, at the end of the trial, will revert to normal unless otherwise confirmed in writing. Employers should be careful not to allow a trial to over-run as this may inadvertently create a contractual entitlement to the four-day working week.

• Part-time employees: many employees already work four days a week, with their pay adjusted to reflect their working days. On the basis that the trials discussed above involve no reduction in pay, part-time employees may request a reduction in their work week from four days to three days (with no change to their pay). Employers may find this difficult to manage, particularly if this results in reduced workforce availability potentially affecting the organisation's output and profit. This leads to the question of part-time employees’ hours and salary when the rest of the organisation is moving to a four-day week. The 4 Day Week Campaign proposes four options:

• Increase the pay of staff on part-time hours to adjust for hourly increases in pay that the reduction in working time would result in;

• Reduce the hours of people working part-time in line with reductions everyone else is going through (without a commensurate reduction in pay);

• Adjust annual leave entitlement to recognise the large uplift created by a four-day week; and/or

• A combination of the above.

Employers will need to carefully navigate this issue and in particular the output/productivity of part-time employees, versus those on the four-day week formal trial, whose productivity and pay will not change.

• Holiday entitlement: The 4 Day Week Campaign anticipates that holiday allowances will remain the same during the trial but employers may be unwilling to sustain this should the four-day working week be implemented permanently. The campaign suggests that holiday allowances would need to be reduced in line with the overall reduction in working hours. For those who now work five-days a week, this would mean a 20% reduction in their holiday allowance. Employees may decide this is a fair trade-off for an extra day off each week with no impact on their pay.

Implications for employers

There has been a rise in recent years of new innovative policies aimed at increasing employee wellbeing as employers reflect on their practices. Good examples of this include the increase in businesses around the world offering ‘unlimited holidays’ (offered by companies such as Netflix) and ‘mental health days’.

Employers may wish to consider whether offering a four-day working week is another step in a more flexible direction, potentially positioning them as an employer of choice, particularly in competitive environments where attracting and retaining talent is key. Joe Ryle, the director of the 4 Day Week Campaign has said “In the wake of the great resignation, organisations should embrace the four-day week as a way of retaining staff and attracting new talent.” If more companies embrace the four-day working week, others may feel they need to follow suit, particularly if they are in the same industry.

Ultimately, however, employers have to consider what is right for their business. Implementing a four-day working week in some sectors could be challenging and the experience of Wellcome may suggest that organisations with workers carrying out a wide range of functions could find it harder to switch their business to the shorter week.

Whether or not a four-day working week will become the norm for the majority of businesses in the UK and Ireland is still unknown (and likely, some way off). In the meantime, we await the results of the trials with interest.