Winning extra productivity with a 4-day workweek

The four-day workweek is a topic that has seen considerable interest in recent years, and some companies and public-sector organisations are experimenting with working fewer hours. However, reducing working hours is not a new idea.

Back in the early 1930s a similar debate took place on whether to go to a five-day working week. And the economist John Maynard Keynes even forecast back in 1930 that technology might lead to a 15-hour workweek by the time his grandchildren came of age. A 1934 article in The Cost Accountant, a predecessor journal to FM, mentions the experimental five-day week, without reduction in pay, and reports that output was not substantially less, and workers' health improved.

Productivity

Recent CIMA research found that maximising your team's potential is at the heart of an organisation's productivity.

Among our findings, members rank collaboration and co-creation, along with hybrid working and new technologies as top productivity factors, while bad management and a lack of skills are most harmful. It's clear that empowering people will improve productivity, because it is their creativity and motivation that drives those positive results.

But the Great Resignation is complicating efforts to boost productivity. As employees reassess their careers and lives, they are leaving jobs in record numbers, and there is a serious disconnect between what employees and employers want.

Leaders will need to bridge that gap with innovative work practices that will help retain employees. Winning employees back requires offering flexible work opportunities, making them feel valued, and creating an atmosphere of care, trust, and genuine sense of belonging. However, there can be a tension between these initiatives and the pressure to produce more goods and services.

The four-day workweek

One surprising way to achieve a win-win situation is perhaps the shorter workweek. The idea of the four-day workweek, or reducing standard hours by 20%, but with no loss of pay, is gaining momentum. Experimenting with such a work pattern, Reykjavík City Council and the Icelandic national government showed in two trials starting in 2015 and 2017 that productivity and quality-of-service provision remained the same or even improved in some instances. At the same time employees reported feeling happier, healthier, and better engaged both at work and with their family lives.

Innovation

The ability to switch off from work leads to innovations. The essence of the Icelandic experiment was employee-led transformation — in rethinking the workflow and optimising meeting time, tasks, and shift arrangements. In practice, it introduced a lean management process. Productivity was measured by queries actively worked on and resolved, waiting times, and proportion of phone calls answered, for example.

Best practice for boosting productivity that emerged from the Icelandic trials included:

• Prioritisation of daily tasks, allocation of tasks more effectively amongst staff.

• Fewer, shorter, more focused meetings and replacing meetings with emails, where possible.

• Reduction in time spent on coffee breaks.

• Moving services to digital provision, where possible.

Of course, the reorganisation was not easily done, and not everyone was happy. Dissatisfaction meant that a small proportion of employees left their jobs after the trial started. Managers reported feeling pressured, particularly at the start of the experiment. Unlike the employees involved in the trial, some managers worked longer hours and experienced more stress. The new mode of work also made it more difficult to organise team and social events, as well as training, which are the important "glue" in creating the culture of an organisation.

Buy-in to change

The most effective reorganisation strategy is unique to each workplace; there isn't a universal one-size-fits-all solution. Also, without engagement, dialogue, and commitment on the side of both employer and employees, workflow reorganisation is doomed to turn into one of those prolonged transformations with catastrophic consequences for motivation and efficiency.

One of the reasons why around 70% of transformations fail is that people do not buy in to the change and do not invest sufficient time and effort to make it happen. Successful transformations also require operational and project management elements that need to be planned, monitored, and reported on, and this is where accountants are well positioned to step in and play a constructive role in improving both productivity and employee satisfaction.

In the second half of 2022, UK firms will be participating in a four-day week trial, run by academics at the UK universities of Cambridge and Oxford, Boston College in the US, and the think-tank Autonomy. While waiting to find out more, we'd love to hear from you. Would you be keen to try this out and how? Would that change your business model and cost structures? Would you move to a different pay system? How do you plan to measure productivity? What other initiatives have had a positive effect on your productivity?

Please contact me at Irena.Teneva@aicpa-cima.com with your experience of companies' reducing the workweek or plans to do so in the future.

— Irena Teneva is an associate technical director–Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.