Should your company move to a 4-day work week?

What is the 4-day week?

The 4-day work week is a growing initiative encouraging companies to move away from the traditional 9-5, 37.5-hour, 5-day week to a 32-hour week, usually over 4 days, without any loss of pay. 80% of the hours for 100% of pay.

In June 2022, 61 UK companies signed up to try a 4-day week for 6 months and report back on their experience. The pilot ended in December 2022 and the results are in… 91% of the companies intend to continue the 4-day week for the foreseeable future, with 18 of the companies committing to the change permanently.

How might the 4-day week benefit your company?   

We know that many people would prefer to earn more and work less. Whilst the 4-day work has certainly gained popularity with employees, employers will no doubt have other factors to consider and need to strike the balance for the business as well as their employees.

Productivity and Efficiency

On the face of it, the 4-day week sounds like an expensive HR project where employers outlay the same in remuneration, only to get less in return. However, experience from the pilot scheme has shown that employees are very keen to make this work, and in most cases, productivity remained the same, whilst one even grew by 2%!

Employers found that efficiency increased as staff worked ‘smarter’ to ensure targets and work outputs were achieved. Employees made changes to the way they worked by cancelling unnecessary meetings or designating working time away from emails.

Measuring productivity and efficiency is rarely straightforward – for example, much will depend upon the nature of the job, how easily targets and work outputs can be measured/assessed and whether employees on a 5 day week are normally required as a matter of course to work outside of their normal working hours for no additional remuneration.

Recruitment and Staff Absence

Employees reported feeling rested and having more time to complete ‘life-admin’ as well as feeling less stressed and sick. This resulted in employees taking on average 2 days’ sick leave per year, rather than the average 5 days typically seen in a 5-day week work pattern.

Additionally, employees reported that they were keen to stay with their 4-day week employer and enjoy the benefits of a reduced working week. It’s early days, but this shows positive signs in terms of employee retention and associated reduction in recruitment and training costs.

Operating Costs

There are also potential cost-saving benefits associated with a 4-day work week. Depending on the structure adopted, the company could save some money on operating costs. For example, if you choose to close the office one day a week, you may be able to save running costs on heating and electricity. Alternatively, a rolling 4-day week structure might mean only 80% of your workforce are in the office at any given time and you could choose to have a smaller office space.

Office Culture

Since working from home has become a larger part of the UK’s working pattern since 2020, there has arguably been a decline in company culture. Participants found that they could encourage their team into the office more often as they were working less and therefore could rebuild parts of the company culture that might have been lost following the pandemic.

What practical steps might you need or want to consider in transitioning to a 4-day week?

Following a proper consultation with employees, employers may wish to complete a 6-month trial to see if the organisation benefits from reduced workdays.

In the short term you should consider:

• Will all employees be offered the 4-day week, or will it be necessary for some employees to continue to work 5 days per week (depending upon role and responsibility)? If you have a ‘split’ workforce then this will need to be managed very carefully, as there may be some resentment or indeed some complaints of less favourable treatment if the 5 day week workers feel hard done by.
• How would you structure your 4-day week? Would everyone have the same day off or would you implement a rolling working pattern in which different teams work different days? Alternatively, staff could work 32 hours spread across 5-days.
• Remember to factor in the rest breaks required under the Working Time Regulations.
• What changes might you make to encourage efficiency? Perhaps removing extended meetings from diaries or introducing dedicated work hours without phones or emails.
• Would you encourage your team to come into the office more and work from home less?
• Would you make 4-day week working conditional on performance? This would need to be based on clearly quantifiable metrics.
• Holiday allocation – would you seek to pro-rate holiday entitlements or allow employees to maintain their full-time entitlement? This may have added complications from a fairness and equity perspective if you have a split workforce, some working 4 days and some 5 days per week.
• How would you allocate (and pay for) bank holidays? Again, complications arise depending upon which day of the normal working week is not worked in the 4 day pattern, given that many bank holidays in England fall on a Monday.
• How would you pay existing part-time staff? You could either increase their pay in line with the existing full time team members or shorten their working hours by 20%.

In the longer term:

• Employment Contracts: if the 4 day week is initially implemented on a trial basis, then it may not be practicable to change contracts immediately. However, once any permanent arrangement is established, you should formalise in your employment contracts .
• Flexibility: you should consider building some flexibility into your arrangements, as it may well be the case that in the future you want to change the days or times within which the 4 day week is worked for business reasons.
• Outside interests: you will need to consider your policy with respect to employee’s having outside interests, for example other part-time employment on their new ‘day off’. Not only should you ensure that this does not create any conflict of interest, but you may also need to direct that it should not impeded upon their ability to perform their existing duties and responsibilities (which may include flexibility in terms of their availability to work).

How we can help?

If you would like to look at how a 4-day working week would work for your business, employees and your employment contracts, please contact our Employment team.

Authors

Stephen Ravenscroft, Partner, Head of Employment
Abigail Jacks, Solicitor, Employment
Charlotte Gunn, Trainee Solicitor, Corporate

Disclaimer: We at Memery Crystal (and our parent company RBG Holdings plc) support and encourage free/independent thinking in relation to issues which are sometimes considered to be controversial subject matters. However, the views and opinions of the authors do not necessarily reflect the opinions, views, practices and policies of either Memery Crystal or RBG Holdings plc.