Carys Roberts: Should employers encourage a four-day week to increase productivity?

Carys Roberts

Reducing working time would have many benefits for society. Since 2014, more people in the UK have wanted to reduce their working hours than increase them. A reduction in the working week could redistribute hours from those who want to work less, to those who would like to work more. Our ageing population leaves the UK with a growing care crisis; more time away from the workplace would help employees to look after their families.

Fewer working hours for the same pay sounds like a bad deal for employers on the face of things, but that is not necessarily the case. In 2017, the average number of annual hours worked per employee in the UK was 1,681, compared to 1,514 in France and 1,356 in Germany, according to Organisation for Economic Co-operation and Development (OECD) research published in 2018.

Yet, although we work longer, we do not work better. Across the 35 OECD nations, there is a strong negative correlation between annual working hours and gross domestic product (GDP) per hour worked.

New Zealand organisation Perpetual Guardian recently experimented with a four-day week without reducing pay. The experiment demonstrated that reducing working hours could improve productivity by getting the same amount done in less time. With time for personal life, the workforce became more focused, more satisfied with their jobs and innovated to work more productively. By offering these kinds of benefits, employers can widen the pool of talent they draw from, including people with family responsibilities.

The relationship between reduced working hours and increased productivity goes the other way, too. As argued by the Institute for Public Policy Research (IPPR) Commission on Economic Justice and the Trades Union Congress (TUC), the potential productivity improvements heralded by automating technologies, particularly artificial intelligence, offer the prize of more time for life without a reduction in pay.

To get there, UK employers should invest in productivity-enhancing technologies. One-third of UK organisations have seen no rise in productivity at all since 2000, according to a 2017 speech by Andrew Haldane, chief economist at the Bank of England. This is in part due to slow rates of technological adoption.

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There are three steps employers can take to reduce working hours. First, by offering reduced hours in pay negotiations and advertising jobs as flexible by default. This could be a four-day working week, or other forms of reduced hours such as sabbaticals or carers’ leave. Second, by reducing all employees’ hours while keeping pay the same, as Perpetual Guardian did, and many firms do by shortening Friday hours in the summer. Lastly, employers can invest in workforces and in the technology they need to perform most effectively.

Carys Roberts is a senior economist at the Institute for Public Policy Research (IPPR), co-author of Managing automation: employment, inequality and ethics in the digital age and a researcher for the IPPR Commission on Economic Justice