17 January, 2020
Earlier this year, Microsoft Japan trialled a four-day working week as part of a "work life choice" project that aimed to boost creativity and productivity by providing employees with more flexible working hours. The trial involved closing the office every Friday during the month of August whilst still providing employees their normal five-day salary.
In addition to the reduction in days, Microsoft also suggested that meetings should be limited to 30 minutes, and encouraged employees to reduce the number of face-to-face meetings and to adopt a more informal chat/online meeting system through the company’s collaboration tools.
Microsoft stated that the shortened week had led to happier employees, more efficient meetings and a 40% increase in productivity, when this year's numbers were compared to those from the same month the previous year.
Microsoft is just one of a number of companies who have recently decided to experiment with the concept of a four-day working week. Uniqlo's parent company, Fast Retailing offered one-fifth of its full-time store workers the option to compress their 40-hour work weeks into 4 days, with the goal of deterring employees from switching to part-time work in order to achieve a better work life balance.
In 2018, New Zealand estate planning company, Perpetual Guardian, was one of the first to experiment with a four-day week, providing their 240 employees with an additional day off a week for 2 months, whilst still paying them for 5 days. The results of Perpetual Guardian's trial found that employees were more productive, more engaged and more committed to their roles. Further, employees were less compelled to check social media and were less distracted by out-of-work projects. The Company is now considering permanently implementing the four-day work week.
Australian company Versa has also adopted the practice, giving employees the option to take every Wednesday off work, provided they keep on top of their work over the remaining four days. The "no work Wednesday" policy came about after the company's desire to provide flexibility to employees resulted in an ad-hoc system that simply did not work for the organisation from an administrative or client service perspective. Versa’s CEO has stated that since the introduction of the trial over 12 months ago, revenue has grown by 46%, profits have tripled and staff are happier and less likely to take sick days or resign.
While growth in Versa’s client base as well as a pivot in direction for the company has undoubtedly boosted that growth, the CEO considers the four-day week has also had some impact -“People have become more efficient, we’ve got better staff retention, there’s less work that needs to be redone and less people needed to be replaced and briefed as a result".
With employees' desire for flexibility on the increase, companies considering trialling a similar practice as a means of responding to employee requests and hopefully also improving productivity do need to also consider the following issues, before embarking on a four-day work week trial:
- Will you need to make changes to your payroll and time recording systems?
- What is the impact on leave accruals? If continuing to pay employees on the basis of a 5-day week, will employees' leave entitlements also continue to accrue on the same basis?
- Will longer hours during the 4 days of work indirectly discriminate against parents or carers, keeping in mind that organisations such as day care facilities generally open between 7.30am and 6pm?
- Will longer work days trigger overtime payments or other allowances under an applicable Modern Award or enterprise agreement?
For further information, please contact:
Kristy Peacock-Smith, Partner, Bird & Bird
kristy.peacock-smith@twobirds.com
