‘We see huge benefits’: firms adopt four-day week in Covid crisis

When Target Publishing cut staff pay after the first coronavirus lockdown last year, the magazine group knew it had to make a positive gesture to its employees. So it introduced a four-day week.

“I felt better in myself that I was able to give something back to match the sacrifice everyone had made,” says Target’s founder and owner, David Cann. Faced with sliding advertising sales and several cancelled projects, the publisher of 20 titles including Natural Lifestyle and Health Food Business had cut pay for its 30 staff by 20%.

But the shift to a four-day week brought immediate benefits for the Essex-based company. What surprised Cann was how much more effectively staff worked and that in July, when the situation had improved, he was able to reinstate everyone’s pay and retain the four-day week.

Unilever New Zealand to trial four-day working week

“Of course there were teething problems, but we found meetings were much shorter and we looked at the way staff worked and what they did much more closely to achieve significant efficiencies.

“And from a mental health point of view, we see huge benefits and because everyone wants it to work, you get an upside in higher profits.”

When Unilever said in November it would move staff in its New Zealand office to a four-day week on the same pay, the maker of Dove soap and Magnum ice-cream which employs more than 150,000 people worldwide, gave the kind of high-profile endorsement for flexible working that campaigners have been waiting for.

“Its time has come,” says the economist Aidan Harper, who has championed the four-day week with colleagues at the New Economics Foundation (NEF) thinktank and a growing number of political organisations across Europe.

Harper is the co-author of a new book, The Case for a Four-Day Week, that sets out the practical arguments for a reduction in the hours spent at work with no loss of pay.

He said that during much of the 20th-century companies were forced, either by trade union action, government policy or labour shortages to give workers a large slice of the gains in productivity – the output of each worker per hour – but this ran out of steam in the 1980s.

With productivity increases close to zero since the 2008 financial crash and the pandemic forcing companies like Target to rethink how they deploy their resources, there is a growing expectation that a broader shift to shorter working hours will happen in 2021.

A recent report by the thinktank Autonomy argued that the chancellor, Rishi Sunak, could prevent a steep rise in unemployment if he supported companies moving to a four-day week. It said a majority of 50,000 firms studied would be able to cope with the change through higher productivity or by raising prices.

It urged the government to investigate ways of rolling out a four-day week, starting with the public sector.

A few weeks after the Unilever announcement Awin, an online marketing firm, said its 1,000 employees – including more than 300 based in the UK – would move to a four-day week after trialling several forms of flexible working.

Like Awin, Unilever will trust staff to work more effectively during a 12-month pilot project. This is not based on hope, but on analysis of how 81 white-collar workers in Auckland carry out their day-to-day tasks using the practical lessons from a local advisory firm Perpetual Guardian, itself a four-day week business run by Andrew Barnes, a former boss of £5.7bn turnover investment broker Bestinvest.

Unilever will introduce new project management software to cut down on unnecessary tasks and support faster decision-making. After the trial, the company says it will evaluate the outcome with Sydney’s University of Technology business school and look at how a shorter working week could be adopted by the rest of its 155,000 employees globally.

The initiative follows a similar trial by Microsoft in its Japanese operations and Toyota’s adoption of reduced hours in several of its factories.

Microsoft said in November that employees increased productivity by 40%, more than making up for the 20% drop in attendance by staff. The US tech firm restricted meetings to half an hour and changed many of its working practices as part of part of a summer project that allowed greater participation by staff teams. The company has yet to reveal what happens next.

Until now the number of organisations taking the plunge is few and progress towards a widespread four-day week culture has so far been glacial, but Harper expects the pressure on companies to review their operations to accelerate take-up in the new year.

“At its recent conference the Scottish National party called on the Scottish government to launch a review of working practices, including the possibility of a four-day week, while the recent Marmot review into health outcomes put shorter working hours on its list of priorities to cut stress and extend life expectancy,” he says.

Julius Goldthorpe, the co-founder of the recruitment company Four Day Week, says the concept has been growing in popularity but remains a small part of the jobs market.

“We started out wanting to focus just on jobs that were four days a week, but we were ahead of the curve and within six months had broadened out to take in all forms of flexible working,” he says.

The supermarket chain Morrisons said in the summer it would be moving to a four-day week at its Bradford headquarters, though it is a more tentative move than the headline announcement suggests.

There was a cut in weekly hours from 40 a week to 37.5 and the company said staff will work nine-hour days to cram the time into a four-day week with a six-hour shift on a Saturday once a month.

The resulting gain of 2.5 hours is less than the 4.2 hours the NEF believes UK workers should have received from productivity growth since 1980.

Harper, like the economist Lord Skidelsky, who advised Labour’s former shadow chancellor John McDonnell to adopt shorter hours on a sector by sector basis – rather than a blanket approach – wants the government to swing behind the move to improve the UK’s low ranking among European countries.

Full-time employees in the UK – which make up 74% of the workforce – work longer hours than full-time employees in all other EU countries except Greece and Austria. The EU average was 41.2 hours a week in 2018; the UK’s is 42.5. A four-day week would reduce those hours, but investment is also needed to ensure that productivity gains follow.

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