Organizations Mar 24, 2022
Is a Four-Day Workweek Right for Your Company?
There’s a reason more and more organizations are considering this option.
Clocking in five days a week may be a long-standing business norm, but it doesn’t have to be, says Benjamin Friedrich, an associate professor of Strategy at the Kellogg School who researches labor and personnel economics.
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While talk of a four-day workweek is not new, it has picked up steam during the last two years, as the pandemic realigned the employer–employee dynamic and leaders have responded by offering flexibility as an employee incentive.
“The bargaining power is shifting towards workers,” Friedrich says.
In a competitive labor market rocked by the Great Resignation, the option to provide employees a four-day workweek—either because the same number of hours are condensed into four days or because fewer hours are worked overall—has become increasingly appealing to employers.
“If your company is a first mover, you’re putting yourself on the map as an employer who is trying something creative and new that benefits employees’ mental and physical health,” Friedrich says. “This is a way for companies to show that they want to be a leader in improving employee well-being.”
Is a four-day workweek right for your organization? And if so, what can you do to increase the odds of making a successful transition? Here, Friedrich offers advice for leaders considering a change.
Momentum for the Four-Day Workweek
Momentum for the four-day workweek has been greatest in the European public sector. Iceland made headlines pre-pandemic for the success of two trials in which more than 2,500 public-sector employees worked fewer hours while being paid full-time, maintaining productivity, and experiencing increased well-being. Since then, Belgium passed labor reform that allows employees the right to condense their workweek into four days by working longer hours, while Scotland and Spain have launched pilots.
In the private sector, Unilever New Zealand is wrapping up its one-year trial, 30 companies in the U.K. are preparing a trial, and the nonprofit 4 Day Week Global is leading a global campaign for a six-month pilot project that commences in April. Here in the U.S., tech companies like Kickstarter and Bolt are ahead of the adoption curve, having recently made the four-day workweek permanent after successful trials.
With every successful pilot, the potential payoffs for organizations are becoming clearer. “Added flexibility makes many employees more productive per hour of work,” Friedrich says.
He points out that a four-day workweek can also help companies address talent problems. “The evidence is quite positive for employees,” Friedrich observes. “Workers are less stressed, they’re potentially in better shape mentally and physically, and they’re more fulfilled because they have time to do other things.”
Still, it’s important to acknowledge that not all industries, organizations, or functions will benefit equally from a four-day workweek. Friedrich points out that most of the benefits in terms of employee productivity, satisfaction, and well-being do not come when the workweek is crammed into four ten-hour days. “The goal is to genuinely reduce the number of hours,” says Friedrich.
“The shorter week works best for knowledge and white-collar workers for whom productivity is not tied to fixed hours,” Friedrich says. This is especially true for creative or strategic roles where taking breaks to pause and reflect helps employees return to work with new energy and focus. “So even though total hours are fewer, companies can do better over time.”
This means that a four-day week—while appreciated by employees—might not actually make sense for a restaurant or call center, where employee output is tied to serving a fixed number of customers within a set timeframe.
Still, Friedrich points out that, even though low-skill workers may find it harder to increase productivity enough to make up for the fewer hours worked, many of these jobs feature high turnover rates. So a four-day work schedule could still be an attractive strategy for a company if increased retention means lower recruiting, onboarding, and training costs.
Get the Rollout Right
For companies that do decide to move forward on a four-day week, there are still many important decisions to consider. Organizations will need to evaluate whether participation is mandatory or optional (and for which roles), weigh any legal constraints from regulation or collective bargaining agreements, and determine if compensation will remain equal or be adjusted slightly to account for any unavoidable productivity changes. For instance, even a ten percent pay cut could be attractive to workers if it is accompanied by a twenty percent reduction in working hours. Or perhaps firms could begin with a trial period during which pay isn’t cut at all to see if productivity is maintained.
“This is a way for companies to show that they want to be a leader in improving employee well-being.”
— Benjamin Friedrich
A successful rollout will also require leaders to be clear on the initiative’s goals, its definition of success, and how progress will be tracked and measured. For instance, goals such as employee retention, satisfaction, and productivity can measured through employee engagement surveys, employee turnover rates, and specific performance targets.
“There are quantitative aspects to productivity and retention, so companies need to have a system in place that allows them to do this properly,” Friedrich says.
Companies that are already skilled at collecting and analyzing data could experiment with a four-day week and quickly see results. And the very best companies will measure progress with an eye toward not just benchmarking but finding new opportunities. For instance, a team’s productivity may not be evenly distributed across the workweek: this insight could be used to optimize schedules that work for employees and for the company.
When rolling out a four-day workweek, many companies begin with a trial period of at least six months—long enough to capture data on the effects of the shift.
Friedrich also advises that companies consider starting small. A smaller-scale pilot allows for the opportunity to recognize and fix issues before broader implementation. It also provides the organizations with the flexibility to target the shift to specific roles—or even to revert back if things don’t go so well.
Addressing Customer and Employee Concerns
Despite the many benefits, organizations transitioning to a four-day workweek will also need to keep a few potential pitfalls in mind. The first is the impact on customers and partners. “You don’t want to disappoint your clients and customers with a day when the office is shut down and you’re not reachable at all,” he says. “So set up a staggered schedule in which employees take off different days rather than implementing a universal day off.” Fortunately, many of the scheduling and communication tools in which companies invested during the pandemic can help employees coordinate their efforts.
There are also concerns that a four-day workweek may exacerbate inequalities among workers, especially if the benefit is optional for individuals. This is a harder nut to crack.
Leaving the choice of a four-day week to the individual—as Panasonic recently announced—risks leaving team members wondering whether saying yes—or no—could put them at a career disadvantage. Just as part-time work hinders women’s career growth and increases wage gaps, the four-day workweek might deter career progressions if companies don’t implement safeguards, Friedrich says.
“Is there going to be some signaling or stigma in who chooses this option? What does this mean for the speed and even opportunity to move up in your career?” Friedrich asks. “This is especially important if the company finds that employees who land in one group or the other are from groups that they’re worried about in terms of inclusion and equity.”
To minimize inequities, Friedrich advises companies to build “accountability systems” which track who decides project assignments and promotions as well as who benefits. The goal is to ensure that employees who work four-days have the same access to career-advancing opportunities as others.
“A lot of companies worry about diversity and inclusion, and what’s often missing is better accountability and tracking efforts and somehow creating metrics to better measure the success of these initiatives.”
With appropriate monitoring, organizations will, over time, determine if a four-day workweek impacts professional development. In some cases, people working at different speeds will impact their productivity, Friedrich admits.
“It might mean slower career progression if you make one choice or the other, so it’s important for companies to be transparent.”
Susan Margolin is a writer based in Boston.
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