The four-day workweek: pathway to productivity or unpaid work?

When he first raised the idea with his human resources manager, she dismissed it as a joke, before realising he was serious.

In his soon-to-be-released book, The 4 Day Week, Barnes chronicles what started as an eight-week experiment at his New Zealand firm Perpetual Guardian, which manages trusts, wills and estates. Written with Stephanie Jones, the book will be released on January 14 by Hachette Australia.

Speaking from the US, where he is promoting the book, Barnes says his decision to pay employees for five days while letting them work four, has resulted in a 6 per cent increase in productivity and a 12.5 per cent increase in profitability in the year since he permanently introduced the new rule in October 2018. This followed a successful trial earlier in the year.

“We found there is no adverse impact on profitability or income,” he says.

“This wasn’t something that went up and then dropped. This is something that has maintained growth and profitability. That is the evidence of sustainability.”

But Barnes’ optimism and his conclusion that the five-day week has become obsolete in the 21st century has been met with scepticism by Australian business.

Earlier this week, Australian Industry Group chief Innes Willox dismissed the idea of employees effectively working part time for a full-time wage as having “no merit”. His comments came as foreign media reported on comments Finland’s new Prime Minister Sanna Marin, 34, made last year in support of more flexible working hours. She has reportedly welcomed debate on the four-day week.

“Any reduction to the standard 38-hour work week in Australia without a commensurate increase in productivity or a matching reduction in weekly pay would be very damaging for jobs, investment and productivity,” Willox says.

Economist and director of the Australia Institute’s Centre for Future Work Jim Stanford also expressed doubts about whether the benefits of the four-day week, including increased productivity, would be enough to pay for itself in the eyes of employers.

“I don’t think many will think that is a profit-enhancing shift,” he says.

Some academics, including professor of gender and employment relations at the University of Sydney Marian Baird, also worry that the four-day week can be used to get five days of work in four. As many women who return to work from maternity leave have learned, the trade-off for getting more flexibility can often mean doing many hours of unpaid work at home.

But Barnes insists that his model – based on “100 per cent compensation for 80 per cent time at work on the condition that 100 per cent of agreed productivity is achieved” – does not compromise business.

“Had we not been able to prove the four-day week made the business more efficient and more profitable, it would not have been a viable proposition,” he says.

“The assumption that if you drop the time worked by a day, productivity will drop 20 per cent is factually incorrect. It assumes that people are 100 per cent productive 100 per cent of the time.”

And the potential extends beyond just improving productivity and the work-life balance of employees; a shorter week can also help narrow the gender pay gap and the environment by reducing the number of commutes to work.

If everyone worked fewer hours, this would allow men to take on more unpaid domestic labour, which would help women work more paid hours.

Eating food at an office desk is against the rules, as is having a meeting there, to avoid disturbing colleagues.

“We are increasingly allowing work to intrude into people’s lives, having emails arrive any time of the day or night and not recognising the environment in the way we work,” Barnes says.

At Perpetual Guardian, the “prize” of getting a free day off has been enough to motivate staff to make big efforts to remove distractions, including mobile phones, which are now stored in lockers.

Eating food at an office desk is against the rules, as is having a meeting there, to avoid disturbing colleagues. Barnes says getting distracted at work is equivalent to a significant drop in IQ.

“We want time to socialise, but there is also a time of day when you put your head down and concentrate,” he says.

“Staff cry when they talk about what they do on their day off. You can’t put a price on having more time with your grandchildren and your family. We are giving people the gift of time.”

Even in work-obsessed Japan, Microsoft found the four-day week improved productivity by 40 per cent after running a one month trial last year.

A 2019 research paper from the Henley Business School at the University of Reading in the UK found that 250 businesses operating on a four-day week on full pay made an estimated annual saving of $175 billion (£92 billion). Almost two-thirds of employers offering a four-day week reported an increase in staff productivity and an improvement in the quality of work produced.

The researchers say the benefits included higher job satisfaction, less stress and a drop in absences related to sickness. The research highlights positive impacts on family life, mental health, physical fitness – and the environment.

“Fewer journeys to and from work provides a potentially large ‘green’ dividends with less fuel consumption and a reduction in pollution.”

But a four-day week may not work for all, according to the researchers, who found some businesses were concerned about the practicalities of ensuring they are available to customers across five days.

Keith Pitt, founder and chief technology officer at software design company Buildkite, has a mix of staff working five days and four days, ensuring customers get service on any day. Pitt, based in Perth and his Melbourne-based business partner employ 17 staff who develop software in Sydney, Adelaide, the UK and Canada.

“You have to think about your customers who are working five days a week,” he says.

Unlike the New Zealand example, staff are paid for four, not five days of work. It has to be that way in fairness to staff who work five days.

The constraints of a four-day week on computer programmers have eliminated a lot of wasted time and produce a different response to creative problem solving says Pitt, who built his own business while working four days for an employer and the fifth day for himself.

“I was more productive for those four days a week and on the one day a week I spent building up the business,” he says.

Michael Honey, from Australian digital design business Icelab, has allowed staff to opt into a four-day week for a decade. Honey, who previously worked in the advertising industry, known for long hours and burn-out, says each work day at Icelab is eight hours, not 10.

“We don’t think people should come to work on a Friday. We’ve got enough productivity to make it possible,” Honey says.

“We are fresher and have more opportunity to think about things and can have better lives.

“It can’t be done for everybody. Our particular business model makes it possible.”

Emma Dawson, executive director of the think tank Per Capita, has reviewed a range of research studies that support the view that the four-day week generally does not result in a decline in productivity.

In response to coal industry strikes in 1974, the UK government under Edward Heath enforced a three-day workweek from January to March, which had the unexpected result of boosting productivity. Economic reports from HM Treasury for the first quarter of 1974 showed Britain’s industries experienced a much lower downturn in productivity than feared.

“Against a predicted productivity fall of 40 per cent, the actual drop was just over 10 per cent,” Dawson says. “Managers reported that the unexpectedly high level of output was due to a significant increase in labor productivity which meant they were getting the equivalent of 4.5 days of work out of three.”

Dawson believes a four-day week could potentially spread available work more evenly through the economy. A quarter of Australian workers want to work fewer hours, and one in five are underemployed and would like more.

“By reducing the standard full-time week, the number of productive hours could be shared more evenly among workers,” she says.

Despite improvements in productivity, workers have been unable to bargain for a fairer share of capital and labour. Wages growth is stagnating and technology, while making us more productive, has equipped us to work longer hours from home.

“It is 90 years since John Maynard Kaines predicted that we would all be working 15 hours per week by the end of the century,” Dawson says.

“We are a lot more productive and standards of living have increased, but we are still working really long hours and the share of profit has been split unevenly. Profits have increased for shareholders much more than has the return to labour in wages.

“The ability of workers to bargain to say we deserve a greater share of productivity gains and fewer working hours has diminished. It now takes two incomes to live a comfortable middle-class life.”