Will the four-day week ever be the new norm?
Market Insight 28 November 2022 28 November 2022
UK & Europe
Health & Wellbeing
Up until the 1920s, a six-day working week was considered the norm, before the five-day working week became popular across the West. Now, 100 years on, increasingly there are discussions around whether the five-day working week is the optimum work pattern, with a growing campaign globally to move to a four-day week – indeed pilot programmes have also been rolled out this year in Ireland, North America, Australia and New Zealand.
As we are nearing the end of the four-day week trial in the UK, we look at what this may mean for employers, and key considerations that arise with such a work pattern.
The UK four-day week trial
The “four-day week” is a work pattern which sees employees working their normal contractual hours over four days instead of five days, but with no reduction to their pay. This pattern is intended to improve the efficiency of the workforce by condensing their workload into fewer days, while also giving workers more flexibility and time to rest.
In June 2022, more than 70 companies opted to take part in a four-day week trial in the UK. This trial mirrors the 100:80:100 model of pay:hours:output. This six-month trial includes over 3,300 workers across businesses ranging from large financial firms to a fish and chip shop.
At the halfway point of the six-month trial, of the 41 participating employers which responded to the survey:
- 88% reported that the four-day week is working “well” for their business.
- 86% said that they are likely, or extremely likely, to consider retaining the four-day week after the trial period.
- In terms of productivity, 15% say it “improved significantly”, 34% state that it “improved slightly”, while 46% say it remained at “around the same level”.
Interestingly, when Microsoft tried out a four-day work week in its Japan offices in 2019, it found this led to happier workers, more efficient meetings and productivity jumped by a staggering 40%.
In CIPD’s recent report, The four-day week, although 39% of the 2,000 senior HR practitioners taking part in the survey believed that a permanent move to a four-day week would boost productivity, it seems that productivity/efficiency is a significant concern amongst employers, with 66% admitting that a four-day week is only feasible if productivity/efficiency improves to pay for it which indicates potential financial and employee relations issues with this work model. Indeed, just 1% of these employers are planning to introduce the 100:80:100 model, with employees working reduced hours without reducing their pay, over the next three years.
What are the advantages and disadvantages of the four-day week for employers?
Allowing staff a three-day weekend may enhance their work-life balance and offer them greater flexibility, leading to improved employee wellbeing which would be beneficial for employee relations, and for the business reputationally, as it seeks to champion employee wellbeing. In turn, this may result in increased productivity with staff feeling more energised and incentivised.
Employees may also benefit from reduced work-associated costs, such as commuting and childcare which, particularly at a time of economic downturn, is an important factor for workers – and for employers, could impact positively on recruitment and retention.
In addition, businesses will potentially benefit from both energy savings in the workplace and, at a time when businesses are focussing on their environmental, social and governance credentials, a reduction in their carbon footprint.
However, while adopting this work pattern may have a positive impact on employee wellbeing overall, some employees may experience heightened stress, with managing the same workload in a shorter working week, so the four-day week may lead to issues such as burn-out and increased sickness absence.
What are the key considerations for employers?
As with all new methods of working, there are a number of considerations for employers, including:
- Managing the impact on work and customer demands: Employers will need to assess whether a four-day week would work for them in practice, and how they would distribute the workload throughout the week to ensure customer needs are met.
- Managing the transition: To mitigate legal risks, transitioning to a four-day week would need to be managed carefully and sensitively, and employers should be clear from the outset how the new working pattern will be applied, including whether it is available to the entire workforce. For example, where organisations have part-time employees, being able to differentiate the productivity levels between those receiving full pay and working a four-day week, and part-time employees working a four-day week, may be challenging. There is also a risk that discrimination claims will arise if the employer doesn’t offer the option of fewer hours for the same pay to current part-time employees.
- Changing terms and conditions of employment: A change in hours is likely to require employee consent and full consultation with staff. While reducing hours for the same pay might appear attractive to most employees, some employees may be reluctant to reduce their hours if it means increasing pressure on them to work more quickly.
- The question of holiday: Although working reduced hours won’t reduce the number of weeks’ holiday entitlement, employers may need to revise contracts where an employee’s holiday entitlement is expressed as a number of working days.
- The impact on overtime: Employers may need to reconsider the scope of their overtime policy, such as how to deal with employees who need to work on the fifth non-working day to keep pace with work demands.
- “Switch back” policy: To manage employees’ expectations, employers may wish to implement a “switch-back” policy in case they wish to change back to a five-day week.
What is the future of the four-day week?
Labour MP Peter Dowd has introduced a Bill to the House of Commons, pledging a four-day week that is “good for the economy, good for workers and good for the environment”. It aims to amend the Working Times Regulations by reducing the maximum working week from 48 to 32 hours. Any additional hours worked would be paid at 1.5 times the employee’s hourly pay. It will be interesting to see what happens with this Bill, which will be presented to the Commons again on 9 December 2022 albeit it is unlikely to progress while Labour are in opposition.
So, the future of the four-day week is as yet uncertain, and in any event it wouldn’t be viable across all sectors, such as healthcare where 24/7 cover is often needed. That said, there is much discussion and interest around this working model – and, notably, just 37% of employers responding to the CIPD survey believe that the four-day week won’t materialise in the next ten years.
It will be interesting to see what the final conclusions of the four-day week trial will be, in particular productivity/efficiency issues - and how many of the participating businesses decide to continue with the 100:80:100 model once the trial is over.