Does a 4-day work week help or hinder
Australian business?
Participating companies, along with business, economics
and law experts share their critical insights
Burnt out, stressed, disengaged and unproductive. Employees and organisations alike acknowledge there is a steady swell of discontent with work-life imbalance across many industries and workplaces. While the COVID-19 pandemic brought challenges to the business sector, it also illuminated new ways of working beyond the traditional 9-to-5 office grind.
Lessons learnt in that time have increased the willingness of workers and progressive employers to explore alternative options, including the idea of a 4-day work week. Companies in Australia, New Zealand and around the globe are putting this theory into practice, commencing the 4 Day Week Global six-month pilot in August, which reduced the work week by one day without reducing pay.
According to 4 Day Week Global – the not-for-profit organisation running the study, 63 per cent of businesses found it easier to attract and retain talent with a 4-day week, and 78 per cent of employees are happier and less stressed on their new reduced hours’ arrangement.
As the trial reaches its halfway mark, participating companies and experts from The University of Queensland’s Faculty of Business, Economics and Law weigh in on the model touted as a potential answer to societal challenges, including unemployment, physical and mental health and environmental sustainability.
Industry insights: The Walk Agency and Momentum Mental Health
Australian businesses The Walk Agency and Momentum Mental Health are two of the 20 organisations participating in 4 Day Week Global’s trial.
Momentum Mental Health
Co-Founder and Creative Director for The Walk Agency Jo Edwards, and CEO of Momentum Mental Health Debbie Bailey both say they had followed the 4-day work week movement for years and were intrigued to explore the model and gauge its impact on their teams’ productivity. The two leaders share their experiences so far:
What has been the staff and management response to the 4-day working week?
Debbie: Our staff love it, and it’s working for us so far! We worked together as a team to set up our own “Rules of Engagement”. For example, if we don’t maintain 100 per cent outputs, an individual or the full team can be required to return to a 5-day week pattern.
Jo: Our response has been mixed, but that’s why the pilot is so important. We knew this wouldn’t be easy and that to realise the benefits, we had to commit to a period of trial and error. The personal benefits have been great, though the benefits appear to have varied according to how well people have used the time off.
Have you seen a reduction in productivity?
Debbie: No. In fact, we’ve seen productivity maintained and, in some areas, our output has increased. We’ve also seen a decrease in the number of personal leave days taken, and our staff measures show an increase in work-life balance, happiness at work, sleep per night, and a reduction in stress.
Jo: We’re two-and-a-half months in, and we’ve spent that time learning and refining. Some people are delivering at around the 100 per cent productivity level, while others are still learning how to identify, resolve and then measure improvements.
Given the opportunity, will you continue the arrangement past the trial?
Debbie: We hope so. It will be up to us to demonstrate we can maintain productivity and customer satisfaction during the trial and deliver our programs in line with the service standards we’ve set for ourselves. So far, that is happening.
Jo: Those that can make it work, absolutely. This arrangement isn’t for everyone, though. It’s hard. It requires something special.
Why has the 4-day work week model gained popularity in Australia?
Its popularity may be related to the findings from previous work done in this area by European countries such as in Scandinavia and our neighbour, New Zealand. Australian organisations are looking over other countries’ shoulders to see what they might learn and to ensure they don’t miss out.
The Great Resignation problems prompted by the pandemic may also be another reason the concept is being trialled and getting more popular in Australia.
What are the advantages of a 4-day working week?
Advantages for employees and employers include:
- reduced transportation costs
- reduced carbon footprint and a more sustainable environment
- reduced running costs like energy bills for employers
- improved employee well-being
- greater work-life balance
- better staff recruitment and retention.
Who will the 4-day work week benefit most?
Working parents with a young family will benefit the most. However, other industries with shift work, like health care, may have to revisit this to experience any benefits.
What are the disadvantages of a 4-day work week?
The disadvantages include:
- intensified work: condensing workloads into 4 days will put a lot of pressure on workers
- potentially increased monitoring, surveillance, and micro-managing of employees to ensure they complete workloads.
The 4-day work week doesn’t suit every business model, and the extent of gains may depend on the tasks being performed.
Will the current trial lead to more businesses implementing this arrangement?
Employees have been looking for more flexibility since the pandemic. I believe the trial will take the “mask off” the 4-day work week, provide insights about how the concept works in practice, and lead to organisations being more open to exploring and maybe even adopting it. Particularly given what we know about the Great Resignation, organisations may feel pressured to adopt the concept to attract and retain great talent as this becomes more challenging and competitive.
How will a 4-day work week change the way Australians live, work and do business in the future?
I remember when the government introduced Sunday as a trading day, a lot of people complained that it would take time away from family life. A 4-day work week will give back some of that family time and contribute to a healthy society.
A reduced work week may also lead to increased levels of work engagement, higher productivity and creativity. Australian organisations that aspire to improve their employees’ well-being and mental health while minimising absenteeism and burnout should be thinking seriously about the 4-day work week.
I also think a 3-day weekend will boost tourism in Australia, as many workers will be able to get away for a quick break locally or even internationally to nearby countries like New Zealand, Indonesia and Singapore.
Why has the 4-day work week model become more popular?
The experience we faced during the pandemic showed that very different ways of working are possible. Employers seeking a rapid return to pre-COVID ‘normal’ have faced employee resistance, including staff turnover and ‘quiet quitting’ – that is, an unwillingness to do more work than is achievable in standard hours at a stress-free pace.
What are the advantages of a 4-day work week from an economics perspective?
Real wages have increased significantly over the last 40 years, whereas standard working hours have remained unchanged, and the pace of work has generally increased. This outcome is inefficient, reflected in widespread complaints of burnout, ‘time poverty’ and stress. The big benefit of a 4-day work week will go to full-time workers with family responsibilities or other demands on their time. Other workers will benefit from higher hourly wages.
What are the disadvantages of a 4-day work week from an economics perspective?
A minority of workers prefer longer work hours, which will depend on the availability of overtime. Also, some existing arrangements, based on the assumption of a 5-day week/2-day weekend, might need to be adjusted.
Based on current evidence, is a 4-day work week economically feasible?
The evidence so far suggests that a shift to a 4-day week will result in improved hourly productivity and staff retention. These benefits will partly offset reductions in output associated with shorter hours. Even if a 4-day week increases labour costs for employers, it will still be affordable. Profits have risen faster than wages over the last two decades. The shift to a 4-day week would only partially offset this.
As a member of the research team examining the experience of workers and employers in the Australian 4-day work week trial, can you tell us anything about the results so far?
The Australian trial has yet to produce interim results, but the UK trial has reached the halfway point. An interim survey of employers has produced very positive outcomes. For example, 88 per cent of respondents said they would be 'extremely likely' or 'likely' to continue with the 4-day week arrangement after the trial period.
What are the advantages of a 4-day work week from a legal perspective?
The advantages include less stress for those employees and families juggling complex, often multiple-job, households and modern lives. Indirectly, society may benefit from better long-term health and more community work that’s currently marginalised as it’s unpaid.
What are the disadvantages of a 4-day work week from a legal perspective?
One disadvantage is higher business costs, even allowing for fresher workers being more productive in their core hours. Higher costs to employers may lead to inflation but will also correct the long-term imbalance of profits over wages. There may be an existential risk to some less profitable businesses and sectors, and pressure to replace ‘full-time’ workers with technology or cheaper casuals to avoid overtime payments.
Is a 4-day work week feasible from an employment and labour law standpoint?
It is for employees currently limited to a 38-hour week. It would be hard to police for ‘professional’ employees on an annual salary who are currently expected to work ‘reasonable’ extra hours without overtime.
What are the potential legal ramifications of a 4-day work week for government and individual businesses?
Employees, in theory, cannot be forced to work overtime. Those with paid overtime would be better off financially and timewise. Entitlements are either based on pay (e.g. super) or pro rata to whatever a full-time week is. Some sectors may have room to trade a shorter working week for less leave – that is, to experiment with shorter weeks but lower maximum leave entitlements in suitable industries through enterprise or industry agreements rather than a big-bang legislated 4-day week for all.
If a 4-day work week is written into legislation, what legal protections would we need to ensure employers and employees aren’t worse off?
No law can guarantee that some employers and their employees won’t be worse off in practice. It depends on how profitable those employers are or whether extra costs not captured by higher hourly productivity can be passed on.
What's next for the 4-day work week
The Australasian six-month trial is nearing its halfway mark, but results look promising.
John pointed to positive outcomes from a similar trial in the UK.
“Forty-six per cent of participating employers said their business productivity had remained roughly the same, while 34 per cent said it had improved slightly and 15 per cent said it had improved significantly,” he says.
Remi cautions organisations to investigate the model’s suitability before adopting a 4-day work week.
“Ultimately, the 4-day work week calls for new work design and job crafting for it to work for organisations and employees,” Remi adds.
Jo says his marketing agency is keen to share its learnings to help evolve modern workplaces.
“If we can help deliver better work distribution, better wealth distribution, less stress on the healthcare system, improved mental health, improved relationships and overall sense of well-being, we’ll be proud to be a part of it,” he says.