What once seemed like a passing pie-in-the-sky idea is now starting to gain traction. The idea is that people will get an extra day off every week without losing money. This is not a compressed work week, where people work longer days to get more days off. The 4-day work week, as proposed, is one where you work only 32 hours a week but get paid for 40 hours. Additionally, you would then get overtime pay for all hours worked in excess of 32 in a week.
Is this a good idea? Let’s take a closer look.
With the unemployment rate decreasing, many workers, feeling empowered, are demanding a better work-life balance. They are often passionate promoters of a 32-hour, 4-day workweek.
Lately, employers have also become increasingly interested in the concept, albeit skeptical. Ask workers if they want a shorter workweek with no loss of income, and you will find plenty of volunteers; ask employers, and you will find mixed responses and a lot of hesitance.
Companies know that a shorter work week can make them stand out from their competitors in the contest for increasingly scarce employees. On the other hand, the cost can be significant.
First, let us look at why the 32-hour work week is believed to be a good idea; not just from an employee perspective, but from that of the employer as well.
For employees, it promises improved work-life balance, as it allows employees more time away from work without adversely affecting the level of pay they have become accustomed to. Fewer working hours can motivate employees to prioritize tasks efficiently, leading to increased productivity and innovative thinking. All other considerations being equal, the 32-hour workweek will certainly win the battle for the next generation of employees.
For employers, the benefits of offering a shorter workweek are believed to be:
- Increased productivity – even to the extent that there will not be less output after the changes.
- Enhanced employee satisfaction: by boosting employee morale, job satisfaction, and loyalty, which is leading to reduced turnover rates and recruitment costs. Offering a 32-hour workweek becomes a compelling benefit for attracting and retaining top talent.
What are the potential disadvantages of a shorter workweek?
From an employee’s perspective: Transitioning to a shorter workweek may require employees to adapt to new schedules, potentially affecting their routines and personal commitments and causing a temporary disruption in their lives.
For an employer, disadvantages may show up in different forms. Here are a few examples:
- The shorter workweek may not translate into higher productivity. For example, on an automobile assembly line, no matter how well the worker performs, the line speed remains unchanged. This means working 20% fewer days/hours means 20% less productivity per person.
- Changing to a shorter week may result in a 25% increase in staffing. A 24/7 operation can’t shut down. A refinery, for example, will run 24/7 using 4 crews. This means for every position, 4 people take turns filling the job. Each crew averages 42 hours per week. If each crew were to average only 32 hours per week, it would take more than 5 crews. This is a 25% increase in staffing at a time when a lack of labor is a main concern for many companies.
- In certain cases, labor costs will go up by as much as 25%. Even if labor was plentiful, the refinery would still have to hire 25% more people, including benefits such as healthcare. Remember, we are only talking about a shorter work week, not a shorter paycheck. Adding 25% more people means we are adding 25% more wages and benefits.
- Our industry surveys—conducted in sectors with blue-collar workers—show that not everyone wants a shorter work week. While about 20% of employees want more time off and less overtime, another 20% want more overtime. A shorter work week can help attract new employees, but it could disenfranchise valuable long-term employees if the plant decreases the number of overtime hours.
For an employer, the questions are “Is a shorter work week worth the cost? Is it going to attract the people we want in a way that makes a meaningful difference to our operation?”
As an example, let’s take a company that needs to run 24/7. A schedule for them might mean hiring a fifth crew and incurring the associated costs. However, using 12-hour shifts means that each crew will average fewer than three days of work per week while still guaranteeing 40 hours of pay a week.
A schedule like this would most likely solve your recruitment and retention problems. Build a better mouse trap and the world will beat a path to your door.
Have companies actually done this? Yes and no. I have read where some companies with handfuls of employees do something along these lines. However, I work with companies between 100 and 3,000 employees, and none of them have done this. When I have been bringing this up in the last few months, there is interest, but the price tag is way too high. I thought the UAW might succeed because the cost is about 25% higher than traditional schedules (for 24/7), and they were asking for a 40% bump (which they didn’t get).
While the 32-hour workweek presents undeniable advantages for both employers and employees, it is crucial to consider the potential disadvantages and thoroughly assess the impact on pay, labor costs, and running a company. By carefully weighing these factors and implementing suitable solutions, companies can achieve a healthier work-life balance while maintaining operational success amidst a thriving and competitive job market.
One thing is certain: A tight labor market is here to stay. Attracting and retaining a quality workforce continues to move up the priority list of every company with employees. The winner in the competition will go to the company that makes the boldest move the soonest. There is no bolder move than transitioning to a 32-hour, 4-day workweek.
James Dillingham is a partner at Shiftwork Solutions and has 35 years of experience working with shiftwork operations and their employees.
