Is Your Business Ready for the Four Day Working Week?

The UK government is looking to introduce a new “right to request a four-day week” as part of a wider employment law overhaul.

This follows other recent proposals on flexible working, zero-hour contracts and enhanced union rights.

Many see these as progressive, but business leaders are right to ask what the impact will be on productivity, operations and employee morale.

At Park City Consulting we know how big an impact this could be.

As HR Service providers and employment law experts we will be helping businesses through 2024 and beyond.

The Four Day Working Week: A Growing Trend

The five day week has been the norm for over a century but changing employee expectations and technological advancements have led businesses to ask whether a compressed four-day week could be the better option.

Other countries have already trialed the four day working week with many companies reporting increased productivity, higher employee satisfaction and better work life balance.

Recent four day week trials have shown that most businesses involved have found lasting benefits, including improved staff morale and efficiency.

But not all businesses have adopted the practice after trials and there are concerns about how it can be applied across different industries.

Working fewer hours can lead to increased happiness, improved productivity, and better mental health for employees.

Some businesses may benefit from reduced hours and increased efficiency, but others fear a loss of output or difficulty in covering shifts.

What does a Four Day Working Week look like?

There are a few ways businesses can implement a four-day week while working fewer hours:

80% of hours for 80% of pay: Reducing hours and pay proportionally, common among part time employees or working parents.

80% of hours for 100% of pay: The more controversial model where full pay is maintained despite reduced hours and relies on increased productivity to offset the reduction in working time.

100% of hours over four days: Known as a “compressed” working week, employees work longer days (e.g. 10 hours instead of 8) to maintain full time hours over four days instead of five.

Employers have flexibility in how they implement a four-day week but the government’s proposed legislation is focused on the compressed model where employees work their full contracted hours over fewer days.

This gives employees more flexibility but still requires them to meet their contracted hours.

A shorter working week can lead to improved work-life balance, increased productivity, and enhanced employee wellbeing.

Guidance for Employers

As the right to request a four-day week becomes a reality employers need to consider the benefits and challenges.

Implementing a trial period, as seen in companies like Microsoft Japan, can help assess the feasibility and benefits of shorter work weeks.

Here’s what you need to know:

Who will these changes apply to?

The government has said not all sectors will have to accommodate four-day week requests.

Industries like education where a compressed schedule is difficult to implement will be exempt. But the scope of the legislation is still unclear.

It’s likely the rules will mirror the existing “right to request flexible working” legislation so while employees can request the change employers can refuse if they have a legitimate business reason to do so.

This means businesses need to be able to justify refusals and have transparent and fair processes in place for handling such requests.

Will employers have to approve requests?

Employers won’t have to approve every four-day week request, but they may have to show they’ve given it serious consideration.

Refusing without reason could be open to legal challenge.

While they won’t have to grant these requests, they should prepare for an increase in such requests and have solid policies and processes in place to manage them.

Successful Trials and Implementations

The four-day working week has been successfully implemented in various businesses and countries, resulting in improved work-life balance, increased productivity, and reduced costs.

One notable example is the trial conducted by Perpetual Guardian in New Zealand, which saw a 24% increase in productivity and a significant improvement in employee well-being.

Similarly, the UK’s largest four-day working week trial, involving 61 businesses, resulted in 89% of participating organisations making the policy permanent.

In Iceland, a trial involving 2,500 workers found that a four-day working week led to “dramatically increased” well-being, improved work-life balance, and reduced stress levels. The trial also found that productivity remained the same or improved across most workplaces.

These successful trials and implementations demonstrate the potential benefits of a four-day working week and provide valuable insights for businesses considering adopting this model.

Achieving Better Work Life Balance

Achieving a better work-life balance is a key benefit of a four-day working week. With an extra day off, employees can pursue hobbies, spend time with family and friends, and recharge their batteries.

This can lead to improved mental and physical health, increased job satisfaction, and reduced turnover rates.

In fact, a survey by the Chartered Institute for Personnel and Development found that 82% of employees reported a positive impact on their work-life balance after adopting a four-day working week.

To achieve better work-life balance, businesses can consider implementing flexible working arrangements, such as compressed hours or telecommuting.

This can help employees manage their workload and personal responsibilities more effectively, leading to improved productivity and job satisfaction.

Additionally, businesses can promote a culture of work-life balance by encouraging employees to take breaks, use their vacation time, and prioritise self-care.

Four Day Working Week benefits and improved work life balance

While some businesses may be wary of the four day week, others will find benefits, including more free leisure time for employees. The advantages are:

Improved Employee Wellbeing: Many businesses that have trialed four day weeks have reported staff are happier, less stressed and more engaged.

In a UK study 82% of companies that took part in a trial reported better employee wellbeing.

Higher Retention Rates: The same UK study found turnover rates dropped by up to 50% as employees were more satisfied with their work-life balance.

Increased Productivity: Companies like Microsoft in Japan have seen productivity increase by 40% when they switched to a four-day week.

The world’s largest trial of a four-day workweek in the UK, involving 61 companies, showed significant improvements in employee wellbeing and productivity.