Is A 4-Day Workweek In Our Near Future? Maybe

FORECASTS & TRENDS E-LETTER
by Gary D. Halbert
March 7, 2023

IN THIS ISSUE:

1. Is A 4-Day Workweek Coming Soon? Could Be

2. UK’s 4-Day Workweek Pilot Was Very Successful

3. 4-Day Workweek Increased Productivity, Job Satisfaction

4. How The 5-Day Workweek Became The Norm In US

5. Countries Which Have Or Are Testing 4-Day Workweek

6. Conclusions: Is A 4-Day Workweek Coming To America?

Overview: Is A 4-Day Workweek Coming Soon? Could Be

Various advocacy groups have been pushing for a 4-day workweek for decades, and while some companies have adopted a shortened workweek, it has never been widely implemented in the US. Last week, however, the findings of a recent study out of Great Britain have brought the issue back to the forefront, and the idea is getting a lot more attention today.

This renewed interest in the 4-day workweek actually began with the Covid-19 pandemic. Covid-19 called into question long-held views about the structure and nature of work, including — for many — the tradition of the five-day, 40-hour week. Remote arrangements, including working from home, freed many employees of some constraints in 2020.

The recent British study looked at a large number of people who switched to a 4-day workweek for six months and the findings were surprising. Not only did overall worker productivity increase somewhat, companies’ profitability remained steady and worker attrition rates plummeted. These findings put the 4-day workweek back in the spotlight.

Today we’ll look at the pros and cons of a 4-day workweek and how likely it is to be widely adopted in the US. We’ll also look at the genesis of the 5-day workweek and ponder whether or not it should be shortened. While most Americans say they favor a shortened workweek, there are some issues to consider. That’s what we’ll talk about today, and you can decide what you think.

UK’s 4-Day Workweek Pilot Was Very Successful

If the idea of working four days a week for the same pay as a 5-day workweek sounds like music to your ears, the results of a recent pilot program from the United Kingdom may give you cause for hope.

Dozens of companies there took part in the world’s largest trial of the four-day workweek — and a majority of supervisors and employees liked it so much they’ve decided to keep the arrangement. In fact, 15% of the employees who participated said “no amount of money” would convince them to go back to working five days a week.

Nearly 3,000 employees from more than 60 companies took part in the pilot, which was organized by the advocacy group 4 Day Week Global, in collaboration with researchers at the University of Cambridge and Boston College. The UK study took place in June through December 2022.

Companies that participated could adopt different methods to meaningfully shorten their employees’ workweeks — with most giving them one extra day a week off to reduce their working days in a year to average out to 32 hours per week instead of the typical 40 hours — but had to ensure the employees still received 100% of their pay for working five days.

The UK pilot program involved twice as many companies and nearly three times as many employees as earlier studies and was the largest of its kind. The benefits to participants extended beyond the office and into employees’ personal lives.

4-Day Workweek Increased Productivity, Job Satisfaction

To the surprise of many companies that participated in the 4-day workweek pilot, worker productivity actually went up overall. Several companies reported productivity increases of 20% or more, with few reporting any drop-offs.

At the end of the experiment, employees reported a variety of benefits related to their sleep, stress levels, personal lives, mental health, etc. according to results published in February. Companies’ revenue “stayed broadly the same” during the six-month trial, while resignations decreased significantly.

Those who took part were less likely to report that they did not have enough time in the week to take care of their children, grandchildren or older people in their lives. Interestingly, the time men spent looking after children increased by more than double that of women, pointing to positive effects of a shorter workweek on gender equality.

A majority of employees who experienced the four-day workweek didn’t want to go back. At the end of the pilot, they were asked how much money they would have to receive from their next employer to go back to a five-day week. Nearly a third said they would require a 26% to 50% increase in compensation and 8% said they would want at least 50% higher pay.

In addition to working fewer hours, participants reported a significant decrease in childcare costs, as they were able to stay home more and reduce daycare costs. So, in addition to increasing quality time with their children, the 4-day workweek also saved them a significant amount of money.

In a labor market where employees are increasingly quitting their jobs and employers are competing for top talent, the benefit of a shorter week is already a recruitment tool for an increasing number of employers.

Widespread adoption of a 4-day workweek, however, faces a number of hurdles in the US. While many smaller, privately held American companies have experimented with shorter work weeks since the pandemic’s onset, many large companies have not embraced the concept. In 2019, Microsoft Corp. discontinued a temporary four-day week in Japan after five weeks. The company did not say why.

It could also be a tough sell for hourly workers who live from paycheck to paycheck, said Jackie Reinberg, who heads the absence management and leave consulting work at Willis Towers Watson. “If we go to a four-day workweek and you’re paid for four days, that won’t work for many Americans.”

As a result, many companies which have gone to a 4-day workweek continued to pay their employees what they were paying them for five days. Some increased the amount of hours worked in the four days to what they were working previously in the 5-day workweek. Most workers favored this change as opposed to being paid less.

The idea of a three-day weekend is very appealing to most employees. Some companies have given employees Fridays off, while others have elected to give Mondays off. Still others have staggered the day off, with some workers off on Friday and others on Monday to ensure they still have employees on the job five days a week.

How The 5-Day Workweek Became The Norm In US

Prior to 1929, many US companies required employees to work six days a week, with only Sundays off. In 1929, however, Henry Ford decided that advances in worker productivity, such as the assembly line and others, had reached the point where the workweek could be reduced from six days to five. He implemented the 5-day workweek at Ford Motor Company, and many other large employers followed in the years thereafter.

In 1938, Congress codified the 40-hour workweek and required companies to pay workers overtime for hours worked over 40 per week. To comply, most companies started paying workers time and a half for hours worked over 40 in a week.

Countries Which Have Or Are Testing 4-Day Workweek

The concept of a four-day workweek is gaining popularity in many places around the world. The following countries have a four-day workweek or are at least testing it.

Chart showing a list of countries testing a four day work week

Of the countries where the 4-day workweek is in place, or is being tested, most say they want it to continue. Companies rated their overall experience well, saying business performance and productivity remained high, revenue increased and turnover dropped.

In the UK pilot noted above, 92% of participating companies said they wanted the policy continued, according to 4 Day Week Global which coordinated the study.

On the employee side, 90% said they definitely want to continue with a four-day week, with over half reporting an increase in their productivity at work, and 15% said no amount of money would make them go back to a five-day schedule.

4 Day Week Global notes that its findings are consistent across different sample groups: men versus women, small versus big companies and generally across industries.

Some of the positive results were even greater for women, in particular around reduced burnout, increased life and job satisfaction, improved mental health and reduced commuting.

Conclusions: Is A 4-Day Workweek Coming To America?

At this point, I think the answer to this question is: It depends. While 90% or more of companies and employers in the UK pilot said they want the 4-day workweek to continue, there are questions we have to ask.

For example, the UK pilot has received so much attention recently mainly because the health of most employees improved due to working fewer days and productivity actually increased. Yet the big question is: Will this increase in productivity continue if the 4-day workweek is adopted permanently?

The UK experiment lasted only six months and included just over 60 companies and 3,000 workers. Most researchers agree this is not a large sample and six months is probably not reliable as a long-term indicator.

What if productivity reverts to its old norms in the 5-day workweek? This would not be good for the economy. The fact is, we just don’t know. What we do know is if we formally adopt a 4-day workweek in America, it will be difficult if not impossible to change it.

And finally, I personally have mixed feelings about going to a 4-day workweek. Like most workers surveyed, I “think” I would like a three-day weekend on a permanent basis, but I don’t know for sure. Maybe that’s because I love my job.

I also wonder if we’ll really like the fact that many of the businesses we frequent will only be open four days a week. While most large retailers will continue to be open seven days a week, what will a 4-day workweek mean for doctors, healthcare providers, service businesses and many others? Will we really like the fact that these companies are only open four days a week?

There are a lot of unanswered questions. Maybe we should be careful what we wish for.

Very best regards,

Gary D. Halbert

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