A study of 54,000 firms supports shorter work weeks
What if the economy moved to a four-day workweek tomorrow, with no preparation, no guiding policies, and no government subsidies? Would businesses remain profitable, or would whole industries collapse?
That is what researchers at Autonomy, a UK-based think tank campaigning for a shorter work week and better work-life balance sought to find out.
The findings
By analyzing profitability statistics from 54,000 companies, Autonomy found that under a best-case scenario, a reduction in hours would be completely offset by increases in productivity.
However, their findings also concluded that companies whose labor costs are highly correlated to their revenue would struggle to adapt if a four-day workweek was implemented too quickly. The authors argue two main conclusions can be drawn from their findings:
1) A four-day workweek with no loss in pay is affordable for most companies
2) Some labor-intensive companies could experience cash flow problems if a four-day workweek was implemented too quickly
The five-day week is a social construct
It’s easy to forget that the five-day workweek is simply a social construct. Up to the late 1800s, workers were expected to work 12–14 hours a day six days a week. The idea of a five-day week didn’t enter the mainstream until May 1926, when Ford Motor Company issued a press release, announcing that its automotive workers were moving to a five-day 40 hour week, theorizing it would make its staff more productive and provide for a better work-life balance.
To effectively implement a four-day workweek would require a massive cultural shift.
Autonomy suggests that this could be achieved through the creation of additional national holidays. If two additional holiday days were added to the months of June, July, August, and September, this would bring the total number of UK national holidays up to 15 days, still less than countries like India who have 18 national holidays per year, but more than countries like the US, who only have 10.
To ensure mass adoption by the public, new national holiday days could be linked to specific events in national history or religions, and people could vote on what the events and people the holidays should be used to celebrate.
Role of the public sector
The authors further argue public sector organizations should be the first to implement a four-day workweek. This is in part because the public sector is a major employer in many countries, accounting for 20.2 million people in the US (approximately 14.5% of the workforce) and 5.56 million people in the UK (approximately 20% of the workforce). Implementing a four-day workweek in the public sector first, at such a scale, could demonstrate its validity to the private sector resulting in wide-spread changes in expected hours of work.
Has the time come for a four-day workweek?
The Autonomy report certainly makes for interesting reading. While I’m not convinced I fully agree with their argument that there would be minimal implications for cash-flow in the immediate term, the report demonstrates a growing desire among knowledge workers to explore new, more flexible ways of working as technology and automation continue to disrupt our working lives.
The shift to remote working during the pandemic has provided fresh insight into how remote working could realistically operate in the future. For many, working from home has been a positive experience, offering more flexibility and a positive impact on work-life balance. A recent survey of employees found that 60% would like to continue to work from home, at least part-time, after the pandemic.
Governments across the world increasingly appear to be recognizing the four-day workweek as a way to stimulate economies post-pandemic. There have been positive trials in Finland and Iceland, and the Valencian government in Spain has recently backed a four-day week.
Jacinda Ardern, the prime minister of New Zealand, has recently spoken about the four-day week as a way in which New Zealand’s economy can recover from the Covid-19 crisis. She suggested that the four-day week could be used as a way to encourage domestic tourism — with people spending more money in their local areas on their extra day off.
While a four-day week is unlikely to work for everyone, the pandemic has created the world’s largest work from home experiment. Policymakers and business leaders should be proactive in learning from this experiment and exploring how technological advances and automation could lead to a healthier, happier workforce
