During the past few days, the headlines claiming that the new Finland's Prime Minister wants to introduce a four-day workweek flooded the Internet. It was everywhere — newspapers, radio, TV. When I saw a headline from ITV, claiming "Finland PM calls for a four-day working week and six-hour days," I got concerned. I know their PM is left-leaning, but reducing the work hours to just 24 per week? It seemed to me like economic suicide. However, this topic sparked my attention to dig deeper.
As it turned out, real news is not as dramatic as some media depicted in their articles. Finland's PM, Sanna Marin, briefly envisioned the idea of a four-day workweek in a panel discussion in August 2019. At the time, she was the Minister of Transport. According to Marin, a four-day workweek is something we should strive for in the long run.
I believe people deserve to spend more time with their families, loved ones, hobbies, and other aspects of life, such as culture. It could be the next step for us in working life. — Sanna Marin, August 2019
As an alternative, she suggested reducing the standard working day to six hours, down from the current eight. That's interesting; she didn't tell to reduce working days to four and reduce work hours to six. Instead, she envisioned to reduce working days or reduce work hours — a big difference already. Also, remember it's her long-term vision. This agenda is not part of the government program in the current term, as the official Twitter account of the Finnish Government announced in the turn of events.
In the Finnish Government´s program there is no mention about 4-day week. Issue is not on the Finnish Government’s agenda. PM @marinsanna envisioned idea briefly in a panel discussion last August while she was the Minister of Transport, and there hasn’t been any recent activity. January 7, 2020
The fact that many newspapers took the news and didn't do proper fact-checking, is disturbing. Their original articles are still out there, not corrected. However, what's even more alarming is that some politicians mentioned the idea of a 4-day, 6-hour workweek and applauded for it. It tells me that we should watch the work of journalists and especially politicians more closely because they, in fact, often work with misinformation, they don't invest time to verify the information, and they make crucial decisions based on that.
However, let's continue with the discussion. Is a four-week viable? What conditions need to be met to be beneficial for employees and not to ruin employers?
A compressed workweek
This term describes a schedule in which employees work longer hours for fewer days of the week. In other words, they need to work ten hours a day to have a day-off on Friday.
Proponents of such a schedule suggest that it will boost productivity that results from decreased overhead costs, such as not having to keep the lights on when nobody is working. Additionally, employees can save costs by reducing total weekly commuting time. Their salaries are not affected. Also, they should have more time for their leisure activities during their three days off.
The idea is not new. A June 2019 report from the Society for Human Resource Management indicates that compressed workweek offers one-third of US organizations, and the number is slowly increasing. What's important, however, is that it is optional in most cases for an employee; he or she can still decide to work five days a week.
An experiment that failed
While this schedule might work in some organizations, it doesn't mean it will work everywhere. In 2008, Utah's governor enacted a mandatory four-day workweek for all state employees, which began working ten-hour days from Monday to Thursday. By closing state government offices on Fridays, the state expected to save on operating costs such as electricity, heat, air conditioning, and gasoline for state-owned vehicles. In 2011, however, Utah reversed course, saying that savings never materialized.
What are the risks?
According to the professor of Public Health from the Ohio State University, Allard Dembe, working 10-hour shifts for four days is not the same as working 8-hour shifts for five days. The danger is in disregarding the health effects that can occur as a result of fatigue and stress that accumulate over a longer-than-normal working day.
The primary problem with the idea is that whatever work needs to be done, needs to get done in the same amount of total time. Despite wishes to the contrary, there are still only 24 hours in a day. — Allard Dembe, The Ohio State University
Dr. Dembe performed a study showing that the risk of suffering an industrial accident is raised by 37 percent for employees working more than 12 hours in a day. As the hours worked in those schedules increase, the risks grow accordingly. Another study shows that chances of being diagnosed with a chronic disease are quite substantial if you work long hours for many years, especially for women.
Working long hours can also have a significant impact on families. Parents may not have enough opportunities to socialize with their children when they are home from school.
In my opinion, a compressed workweek is not worth it in the long-run. In the past, I worked 12-hour shifts, and after two years, I decided to quit my job because of this schedule. Often, I was tired, and over time I got health complications.
A four-day workweek with a reduced hour count
Let's take a look at a proper four-day workweek with a reduced hour count. According to this report, 15% of US organizations offer four-day workweeks of 32 hours or less — a slight increase from the previous year.
While four-day workweeks are still relatively uncommon, organizations that have implemented them report no decreases to productivity or revenue as a result. — Report from the Society for Human Resource Management, June 2019
Many companies worldwide already adapted or experimented with such a schedule, and their transition was often well documented. We have valuable data to study.
Perpetual Guardian, New Zealand
This trust and estate firm from New Zealand tested the idea for six weeks on its 240-plus employees since March 2018. Each week they had a day-off while still receiving full salaries. The six-week trial, initiated by founder Andrew Barnes, was a big success. Based on the results, the board later made this new schedule permanent.
The trial had some conditions. Employees had one month to create productivity measures, virtually determining how to complete their work within 32-hours a week. "It's about productivity. By doing small bits of process improvement, they made their jobs more efficient," Barnes said. At the end of the trial, Perpetual Guardian's revenue and profits were unchanged. "What that means is the team is 20 percent more productive in the office," he said.
As part of the trial, Barnes asked two researchers to track the impact on employees — Jarrod Haar, a human resources professor at Auckland University of Technology, and Helen Delaney at the University of Auckland Business School. They found out a decline in employee stress levels, improvement in their work-life balance, and higher engagement. Also, the workers maintained a higher level of motivation and were more focused on getting work done.
While the majority of employees welcomed the change, not everyone was able to adapt to the new schedule. Some reported increased pressure to complete their work in a shorter time, especially around deadlines. Others said they were bored on their extra day and would instead come to work.
In August 2019, Microsoft tested a four-day workweek in their Japanese branch. Microsoft gave its workers special paid leave on Friday, and also subsidized expenses for taking classes or taking family trips. As a result, productivity rose by 40%, and electricity bills were reduced by 23%.
To achieve such results, employees had to be more efficient, which might be challenging in the Japanese environment. The work culture in Japan emphasizes teamwork from employees across departments and manager approval in almost every decision. Microsoft cut the length of most meetings to half an hour and also limited attendance to five employees. Nevertheless, Microsoft officials in Japan said their data revealed some barriers to implementing a four-day workweek more broadly, including some pushback from managers and uneven results depending on the department.
Aizle restaurant in Edinburgh, United Kingdom
Aizle chef Stuart Ralston decided to cut work hours in January 2018. As the word spread, his competition was hostile to the idea. Many doubted his restaurant would survive the next six months, but it did. Aizle has enjoyed its best financial year ever, staff morale was improved, and it helped to attract new workers.
In 2016, Amazon experimented with a four-day workweek of 30 hours. Several technical teams took part in it; all participants were part-time workers. They had the same benefits as traditional full-time workers with the only difference of receiving 75 percent of the pay full-time workers earn. I was, unfortunately, not able to find out how this experiment turned out.
In 2004, Google initiated a policy where its employees were allowed to pursue whatever projects they wished for 20 percent of their time or one full day. It's not a reduced work time per se, but its employees were allotted to Google projects only four days a week. Nevertheless, the company informally abolished this practice, as some former employees have claimed.
These examples showed that pursuing reduced working hours is, in most cases, beneficial for workers and might bring value to employers if they prepare their firms for such a change. However, what works for one company or one of its branches might not work for different offices, companies, or countries. There is simply not a universal rule to make such transition easy. As the report from the Society for Human Resource Management states, "In general, flexible work benefits are not equally suitable for all industries and job functions, as some organizations rely on workers completing tasks 24-hours a day, or at specific times."
When politicians force the transition
Not just companies are motivated to reduce working hours — our politicians try to achieve the same; if a politician pushes a law to lower working hours, he will gain massive popularity among voters. However, there is one substantial change in their approach. Whereas the company experiments with reducing working hours in their office and later expands to other branches, politicians want to force this change by law, disregarding the needs of different organizations or professions. I believe this top-to-bottom approach is incorrect, and I plan to demonstrate it further.
35-hour workweek, France
France introduced the 35-hour workweek as a part of labor reform. This reform was adopted in two phases: the "Aubry 1" law in June 1998 and the "Aubry 2" law in January 2000. The reform's aim was primarily to lower the unemployment rate. Politicians expected that the reform will stimulate the creation of jobs with work-sharing and that citizens will have more time for non-work activities. Worth noting that if an employee works more than 35 hours per week, all hours over this limit are considered overtime. The legislators assumed that for companies, it would be more cost-effective to hire additional workers than to pay overtime hours to existing ones.
In phase one, implemented in 1998, businesses could make the transition to a 35-hour week voluntarily. In 2000, when the second law passed, the transition was mandatory for all companies with more than 20 employees. The legislation reduced the overtime premium for small firms and increased their annual limit on overtime work compared with large firms to make the change easier for them. This way, small firms could continue operating on a 39-hour basis paying the difference with a reduced overtime premium. For all companies, which signed 35-hour workweek contracts with the unions, the government offered social security rebates. The rebates declined with an employee’s monthly income and were most significant for workers receiving the minimum wage.
Worth noting that the effect of this legislation was not as politicians expected — an increase in recruitment has not occurred. Businesses had overhead costs with each new employee, like training costs and employment taxes. Also, since the socialist government lost the general election in 2002, this legislation was further weakened.
Six-hours days experiment, Sweden
Sweden tested out a 6-hour workday for two years at the Svartedalen old folks' home in Goteburg from 2015 to 2017. From the data, it's evident that employees liked this 30-hour week schedule. They claimed reduced stress levels; they were happier and enjoyed the work more. However, the cost was too high.
To give the roughly 80 workers at the Svartedalen old folks' home more time off, the city government had to hire 17 additional people to cover the shifts. The new hires put a $738,000-sized dent in the payroll — an increase of about 22%. — Business Insider
As I pointed out, reduced workweek can be a reality. However, the decision to cut work hours should be made solely by each company. Firms may experiment with smaller teams, asses and evaluate results, and decide if this change brings them any benefits. Each company is different, and there's not a universal rule to apply. What works for one company won't work elsewhere. Healthcare, service, and the tech industry are most notable for high workload, and I assume this won't change anytime soon.
Still, I believe in the power of the market. Imagine two similar IT companies — one of them introduces four-day weeks and keeps salaries on a competitive level; the other company needs to react to the change; otherwise, it will most likely lose its employees. Passing government laws and applying them to every company is not a viable solution. As a result, the cost per one employee will most likely go higher, and if governments introduce incentives or tax deductions, they will deform the market even more.
Also, don't forget that we're living in the age of the digital revolution. Automation gets better every day, and this gives us more options to save work hours of employees. However, we need to be patient as this transition happens gradually.
If you'd like to experiment with a reduced workweek, read this excellent article first. Also, if you have valuable points to the topic, feel free to leave a comment. Thanks!