Keeping the balance of reward and productivity

In June 2022, 61 UK companies began a 6-month trial in which full-time employees had the opportunity to reduce their hours to a 4-day working week, without a drop in salary, provided that they maintained 100% output. Participants ranged from tech-start-ups to banks, education services to a chip shop. At the end of the trial, 30% of participating employers said they would make the change permanent, with 56 companies extending the shorter working week in some way. 

The vast majority of employers reported that productivity had been maintained or increased, although several extended the length of the working days to compensate for the loss of the fifth day. Employers also reported reduced sickness absence and benefits for retention and recruitment. 54% of participating staff said they found it easier to balance work and home responsibilities, with 39% reported reduced stress levels and 40% better sleep. 

However, whilst the trial has demonstrated that it can work across a wide range of businesses, employers should think carefully before rushing in. 

A common objection is that the 4-day week can’t work for those in customer facing roles, or in jobs where productivity is determined by other factors (e.g. how fast a machine operates). The national trial has shown that it can work in unexpected places: for example, a fish and chip shop hailed the trial a success and announced that it intended to make the arrangement permanent. 

However, other organisations faced difficulties. Despite significant success in a number of teams, the Gateshead CAB extended their trial because of difficulties implementing the arrangement in their contact-centre team. Set opening and closing times, along with the need to have all staff in on Mondays and Fridays due to peaks in demand, made achieving a full week’s work in 4 days very difficult for contact-centre staff. When the trial was extended, the CAB expressed concerns about implementing it for other teams, when it didn’t work in the contact-centre and therefore couldn’t be offered to all staff. There is a risk of creating a two-tier workforce, with knock-on impacts on staff satisfaction and retention. 

Similarly, part-time staff may feel they are losing out. Should employers re-examine workloads for those who already work a 4-day week, and increase their pay? Should part-timers have the opportunity to reduce their hours (on a pro-rata basis) without a reduction in pay well? 

Several organisations opted for a temporary extension to the arrangement to see how it fared across a whole year, and whether the productivity gains remained or dropped off. Employers who are considering implementing a 4-day week should offer it on a trial basis initially, considering the length of trial needed and what goals would need to be met for it to be made permanent. 

Finally, employers should consider that not everyone will want, or be able to, move to a 4-day week. Some employees cannot lengthen their existing days, or work more intensely, to compensate for the "lost" day of work. For some the increased stress levels on their working days may not be worth the extra day off. Consultation with staff is crucial and any changes should be agreed rather than imposed. 

What next?

Whilst the 4-day week campaign is pushing for legislative change, imminent change seems unlikely where the Government has instructed South Cambridgeshire District Council to stop its own 4-day week trial on value for money grounds. 

However, don’t forget that employees with over 26 weeks’ service have a right to submit a flexible working request which could include a request to move to a 4-day working week. Ordinarily, a reduction in hours would mean a pro-rata reduction in pay and benefits – in view of the 4-day week trial though, this should be clarified early in the request process. Employers have to consider flexible working requests fairly, and respond within three months (to include any appeal). Requests can only be refused for one of eight statutory reasons. Whilst this introduces a degree of objectivity, these reasons are still fairly broad and it is often relatively easy for an employer to validly reject a request. However, employees may point to the success of the 4-day week trial across a range of businesses in support of their application.

The Flexible Working Bill is now law and will come into effect on April 6 2024. The new law will allow employees to make two requests in each 12-month period; remove the requirement on employees to make suggestions as to how their request would impact the employer; require employers to consult before rejecting a request; and reduce the response period to two months.

The Government has also committed to allowing employees to submit a request from day one of employment, and ACAS is currently seeking comments on updates to its statutory code of practice of handling flexible working requests