The costs and benefits of switching to a 4-day work week

John Yang:

In 1926, Henry Ford instituted a five-day 40 hour workweek, with no loss of pay for having Saturday`s off what`s now the standard in American workplaces. Now there`s a push to consider a four-day 32 hour work week, again with no loss in pay. But how practical is that?

Earlier, I spoke with Daniel Hamermesh, an economist at the University of Texas and Joe O`Connor who helped develop an international pilot program to test a four-day work week. I asked O`Connor about the results of that pilot program.

Joe O`Connor, Work Time Reduction Center Of Excellence:

A four-day week is a good idea, because we`ve seen in the trials that have taken place in the United States, in the United Kingdom, and elsewhere all over the world over the course of the last year that most of the companies participating in those trials have said they plan on making the policy permanent, their revenue has either remained stable or has increased during the trial. And they`ve experienced that their productivity has been able to be maintained, and in many cases even improved.

Unsurprisingly, we saw improvements across a whole range of different wellbeing indicators amongst employees that participated in the trials, but it`s something that can actually be better for business too.

John Yang:

Daniel Hamermesh. Is there a cost to this?

Daniel Hamermesh, Professor Emeritus, University of Texas at Austin: I think there is I can`t believe that if in fact this were applied universally, even fairly broadly, that we wouldn`t see a substantial decline in output and a substantial resulting decline in people`s incomes. If employers could do this, my question is, why haven`t they done this? Everybody would win. I just don`t think they can very broadly.

John Yang:

Joe, what do you say to that? Loss of output and loss of income.

Joe O`Connor:

So I would agree with Daniel that this is very much not a one size fits all model. I`m not arguing that the four-day week, nine to five should become the new normal everywhere because as we know, there are many sectors, many industries many companies that don`t have a five-day nine to five.

What I`m arguing is that most companies today who operate on a five-day nine to five basis could move to a four day week without necessarily needing to increase headcount and without necessarily damaging on their business performance priorities or productivity.

When they attack inefficiencies like overlong and unnecessary meetings, distractions in the workday, processes that are outdated or inefficient and poor use of technology that they can go a long way to offering it shorter workweek to their employees without undermining the bottom line.

John Yang:

What about Daniels other point that if this is such a great idea, why haven`t businesses already done?

Joe O`Connor:

Well, the reason why businesses haven`t done it is that before the pandemic, it wasn`t acceptable in society or in business, this idea that you could run a global company from your kitchen table, this idea that you could be as productive at home as you could be in the office.

And it took a big game changer like the pandemic to dislodge a lot of these cultural and societal norms. I believe the same is true with the shorter working week, this has opened the eyes of leaders and managers that there are different ways of working that are possible.

John Yang:

Dan, you say it`s a trade off? Where do the benefits become so great, that they outweigh the loss of productivity and the loss of income? Or do they?

Daniel Hamermesh:

It depends on people`s preferences, some people might be willing to take a let`s say, five or 8 percent, cut and then come to have an extra 20 percent of leisure time. But the point is that there are a lot of industries as Joe would acknowledge, where this doesn`t work, manufacturing cars on an assembly line, which is the archetypal model we have, I don`t see why working fewer hours is going to get any more. And I think substantially less output.

One other thing to stress, though, and Joe is right, there`s been a huge trend already before the pandemic toward more four-day work. And they went from 1 percent in 1973, to over 6 percent in 2018. And I fully expect it to go up and Joe`s organization flustering that I think it`s a good thing if we can do it.

John Yang:

Joe, there are some models in the United States where it`s a compressed week, it`s four days, but 40 hours. What do you think about that?

Joe O`Connor:

The difficulty I would have with that model, and a lot of cases, particularly when you`re talking about knowledge based or, you know, work that used to be maybe primarily office based now is hybrid or remote. I`m not persuaded or convinced that people are as productive in their ninth or 10th hour on a Wednesday necessarily as they might be in their first or second hour on a Friday.

I`m also not persuaded that, from a burnout perspective that people are likely to be better rested after 14 hour days than they might be after five, eight hour days. So I think the research is not conclusive that this is something that necessarily in lots of job types is good for business and good for people.

And the other point I would make is that it overlooks the power of the incentive, the ability to be able to get some of their time back in exchange for the same pay, that people are incredibly focused and motivated and driven while they`re at work in order to achieve the goals and the targets of the company.

John Yang:

Daniel, what do you say to that, especially his point about efficiency, and productivity actually sort of having diminishing returns?

Daniel Hamermesh:

I think he`s quite correct on that, that it does. On the other hand, even a 10-hour a day, for ninth and 10th hours, people are not doing nothing. So I think this would keep up almost the output we now have.

But the crucial point to note is that people like bunching leisure. In some industries, it`s been very successful in medical hospitals for 12 hour days, three days a week, that`s a full time. And that bunches very well it accords very well with the demands of clients not to have the patient shifted from one nurse or one doctor to the next three times a day.

So I think all of this depends on what is appropriate. I doubt that many industries were in fact, four days, eight hours a day, believe us as well off.

John Yang:

Daniel Hamermesh at the University of Texas and Joe O`Connor, the Work Time Production Center of Excellence. Thank you both very much.

Joe O`Connor:

Thank you.

Daniel Hamermesh:

Thanks for having me.