The traditional working landscape is changing. Companies are exploring 4 day work weeks to increase the happiness of incumbent staff members and to attract new ones. Because, over the last 12 months, global views about life – and what matters – have shifted dramatically.
Global blue-chips, including Twitter, have announced they’ll allow staff to permanently work from home. And recently sanctioned legislation from governments – including the Irish one – gives employees the right to request home-working. So behind every public announcement, there are private conversations taking place. The pandemic – proving, almost overnight, that most office-based work can be done from home – has undoubtedly accelerated this.
The wide-scale shift towards home-working is challenging assumptions about where ‘home’ needs to be. Proximity to your employers’ HQ, for example, is no longer a necessity. Even when life returns to something closer to normal, I believe we’ll see more companies allowing staff to work predominantly remotely with trips to the office just a few times each month.
People employed by international companies headquartered in principal or capital cities are realizing a city wage goes much further when you relocate away from them. Urban renters – who’ve been saving hard for years for a house deposit – are seriously considering their options. Being able to earn a large corporate salary while working remotely – relocating, perhaps, to a picturesque rural or coastal area where there’s a lower cost of living or moving back to your hometown where there’s extended family to lean on for childcare – is an appealing combination.
Many entrepreneurs are drawn to large or capital cities but I was determined to set up my company in my hometown. Quality of life was a primary motivator for me. I wanted to be home ten minutes after I’d finished work! But another key motivator was cost. The cost of hiring staff in the capital was exponentially more expensive. And although the town where we’re based is relatively small – with a population of just 20,000 – there are 300,000 people living within a 60km radius. Finding excellent staff was never a problem for us and we were able to offer them a regionally competitive wage.
But now companies like ours – with 25 employees and a small-town location – must compete, on a local level, with the blue-chip benefits of large corporations like Google and Amazon. It is concerning. But the 4-day week – that, being nimble, we were able to implement rapidly – is how we do it at 3D Issue.
1: Offer staff the option of a 4-day week
“What would you prefer, a 20% pay rise or a 4-day working week?”
I asked my entire team the same question, thinking that I’d let the majority’s vote influence my decision-making. I had an inkling that more people would choose a shorter working week but I was surprised by the unanimity: not a single staff member opted for more money.
I guess this illustrates that, when you’re already paying staff the market rate, the power of money to influence employee satisfaction becomes less important than other factors.
Although having said that, by moving to a 4-day week, each staff member’s intrinsic market value automatically increased. If you’re being paid $48,000 for a 4-day-week, for example, your rate for a 5-day-week would be $60,000. A nice little benefit when bundled with getting an extra day off!
2: Why I launched our four-day week
I introduced our 4-day work week for two reasons. Primarily, it was a thank you to the team for working hard to get our new product, Experios, market-ready. But I also did it for reasons of self-interest: the shorter week boosts staff satisfaction making them less open to being poached!
A peripheral benefit to the change was that it raised our profile amongst jobseekers and the number of applicants, for each new position advertised, surged.
3: Loyalty boost from the sustainable work environment
Creating an environment that prioritizes employee happiness builds greater loyalty, improving employee retention. Employees who are enjoying a good work-life balance are less likely to be swayed by approaches – indirect or direct – from recruiters.
We’re a small business and, at the end of the day, we need to protect all the investments we make including those into recruitment and employee development.
Based on gut-feel, there aren’t enough companies doing this to provide a solid data stream, I imagine that the churn-rate for employees on a 4-day-week would be lower than the industry average.
4: Productivity gains of a 4 day week
Our 4-day-week output matches that of our 5-day-week. So productivity at an individual and team level, for the amount of time worked, has increased.
We aren’t exceeding our 5-day-week levels of productivity but then I wasn’t expecting us to. Staff productivity was already high. Basically, the team is fitting five days’ worth of tasks and projects into four. I hoped that the team would match our prior level of productivity and they did, so that’s fantastic.
5: How to organize your new way of working
There isn’t a one-size-fits-all approach to a 4-day-week. Some companies run flexi programs where staff are allowed to work extra hours and then take time-off in lieu. Some companies allow staff to reduce their working week to 4 days with a proportional reduction in salary. Each business is different and it’s crucial to find an approach that works for your people, your business, and the market in which you operate.
From my experience, staff will want to know two things:
- Are we doing 40 hours over 4 days rather than 5 days?
- Will our wages be affected?
I offer my staff a 32-hour working week for the same pay as a 40-hour working week. We left salaries as they were, making no reductions for any of the existing staff. The new way of working was a reward, really, for the team’s sterling work bringing our new product to market.
So that we have appropriate cover for all roles, some of our team members work Monday to Thursday and others work Tuesday to Friday. We try to stick to that but life happens. Situations will arise where someone needs to switch their day off and, wherever possible, we’ll accommodate that. But in a customer-centric business like ours, it can get tricky to manage if somebody takes Wednesday off one week and then Tuesday the next.
6: Contract considerations when shifting from a 5-day week
Unless you have a legal background, it makes sense to seek professional advice on best practice around employment terms and contractual obligations.
We issued new staff contracts – detailing the rate of pay and working hours – to ensure legal compliance and to protect the contracted value of our employees. If the company had to return to a 5-day working week, for example, salaries would increase to reflect that.
7: When to start your four-day week
If you’re considering making a shift to a four-day working week, think carefully about timing. I’d have saved myself a few headaches if I’d launched our new arrangement at the start of the year – when all holiday days, from the previous year, had been either allocated or used.
Holidays, understandably, are precious to people. And so I had to investigate each person’s allocation and adjust accordingly. It got messy, at times!
8: Holiday entitlement for a 4-day week
To reiterate, holidays matter. They’re important to employees, naturally, but they also have a business impact. It makes sense to get super clear about how they’ll work in any new arrangement. Consider where you stand on various different scenarios, check out any country-specific legalities and then get upfront with your staff. You’ll save yourself some awkward conversations, further down the line.
With 3D Issue’s 4-day week arrangement, for example, employees get four-fifths of their previous holiday entitlement. This doesn’t impact the number of holidays they get, though. Our new week is four-fifths of our old one, after all. But I’d recommend communicating all of this, in advance, no matter how obvious it might seem to you.
For some companies, employees using single days from their holiday allocation to have lots of 4 day weekends, scattered throughout the year. If you are a small company this can be disruptive. If this will pose a problem for your company, explain why at the outset. Staff will, invariably, understand.
9: How do bank or federal holidays work in a four-day week?
Things can get messy when it comes to the bank or federal holidays, too. Check the legal requirements in your area as this can vary. Then be clear with staff about how this will work. Some businesses will allow staff to take the extra day off. Others may decide that on weeks where there’s a bank/federal holiday, staff take off that holiday but work the other 4 days instead. Approaches will vary but this is a topic that really needs to be discussed from the start.
10: #4dayweek? There’s no going back!
The 4-day working week, at 3D Issue, was intended to be a trial. But, the moment I’d formally announced the trial, I realized there would be no going back. Staff even joked about the use of the word “trial”. So it was just as well I’d spent the guts of a year researching the 4 day week movement.
In all seriousness, though, I have no regrets. Staff come into work refreshed, with their batteries fully recharged, after enjoying a bonus day to themselves. The entire team is happier. And isn’t that what life is all about?