The Covid-19 pandemic changes how people perceive work, allowing companies and employees to experience a flexible working model. Many employees are seeking more flexible hours and workplaces, and companies are looking for ways to attract and retain talent in a tight labor market. Reducing working hours not only benefits employees but also brings environmental and social benefits, which can be one of the measures for companies to improve their ESG rating.
Several countries have started experiments on a four-day workweek. One of the examples is the pilot program conducted by Reykjavík City Council and Iceland's national government. It recruited 2,500 workers, accounting for 1% of Iceland’s working population, and covered more than 100 workplaces, including offices, kindergartens, hospitals, and social services. The result showed almost all groups of workers experienced less stress and burnout, which improved their health and work-life balance. As a result, in most cases, productivity remains unchanged, and some even exhibit an increase.
A survey conducted by Henley Business School at the University of Reading in late 2021 interviewed 500 senior executives and business owners and over 2000 employees. Of those, 65% responded that they have some level of four-day working arrangements, an increase from 50% in 2019. Among companies that have implemented a four-day workweek, 66% of employers said it has resulted in cost savings. Over two-thirds of executives believed flexible workweek helped them attract more talent, and 64% said the quality of work and output of employees has improved. From workers’ perspective, 66% believed a four-day workweek had improved their happiness. Overall, both employers and employees have a favorable view of the four-day workweek.
Although various pilot programs have been initiated across the borders, more evidence is needed to convince companies to alter the working models. Beginning in June this year, the U.K recently launched a major four-day workweek trial involving 70 U.K companies and over 3,300 employees. The trial is based on a “100:80:100” model, in which employees work for 80% of the time, for 100% of their salary, with a commitment to maintaining 100% productivity. The program is coordinated between advocacy groups for a four-day workweek and researchers from Cambridge University, Oxford University, and Boston College.
Reducing working days or working hours is closely associated with ESG targets. More day-off and leisure activities increase employees’ well-being, which improves human resources. It also promotes gender equality in the workplace. On average, women spend triple more time than men on unpaid childcare. By reducing the workweek to approximately 32 hours per week, both men and women would have more time to spend on childcare and family care without leaving the workforce.
For companies, reducing working hours will reduce energy consumption in the workplace and reduce carbon emissions from transportation. A study conducted by British researchers in 2019 estimated that working four days a week would reduce U.K’s carbon emissions by nearly 20%. Giving employees an extra day off would increase the number of low-carbon activities such as rest, exercise, community involvement, and family gatherings, increasing overall consumption.
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