Work four days, get paid for five: what’s not to like?
For many it’s another step towards work-life nirvana, but for others it looms as a cruel mirage. Rob Mitchell looks at a bold plan by one Kiwi business to boost productivity.
AStuff poll had it as a slam dunk: 95 per cent to 5; a similar survey by the Daily Mirror in Britain was nearly as emphatic –
91 to 9.
Nearly all the readers who responded said they would rather work four days a week than five.
A no-brainer, right? The tiny minority who disagreed had clearly removed theirs before answering the surveys.
It’s a dream of many. And now New Zealand firm Perpetual Guardian is about to make it a reality for some.
The company, which manages trusts, wills and estates, has finished a two-month trial, during which its 240 staff worked four eight-hour days but were paid for five.
Not all took the extra time off as a three-day block; some employees left work early each day to beat traffic and spend more time with their children; others used the day to break up the working week.
The experiment, supported by academic research, has been deemed a ‘‘resounding’’ success and the firm is looking to make it company policy.
That success has raised hearts around the country and headlines around the world: Media in Australia, Britain, the United States and beyond have taken a rare glimpse our way and wondered what those crazy Kiwis are up to.
Andrew Barnes, managing director of Perpetual Guardian and the man behind the plan, is still basking in the glow of global reaction.
‘‘I’m totally gobsmacked,’’ he says. ‘‘At the last count there were over 1000 media stories on it, around the world, and around
140 TV or radio segments. ‘‘I’ve been asked to speak on Colombian radio, which is mad, right?’’
The global interest has been crazy, but the yearning that drives it is easier to understand.
‘‘It just shows that society . . . is looking for a better way to work in the 21st century.’’
Barnes believes he’s found it: a structure that focuses on outputs and goals, rather than hours worked and grind.
Regrets? He hasn’t even got a few. ‘‘Our total profitability, revenue, service standards, etc, didn’t drop, so as a consequence our productivity must have gone up 20 per cent.
‘‘There’s the odd outlier in a qualitative basis, where some people it doesn’t suit, but . . . every single quantitative measure moves the way you would have wanted it to move, and in some like enrichment, empowerment and engagement, moved the dial by 40 per cent.
‘‘I have an empowered, energised, motivated and more loyal workforce; I’m struggling to see a downside.’’
Ditto Jarrod Haar, a ‘‘bolshie’’ professor of human resource management at Auckland University of Technology, who read about the experiment in the media and then contacted the firm about being involved.
Haar and colleague Helen Delaney surveyed the staff and supervisors during the MarchApril trial and just after; they asked about stress levels, worklife balance, job satisfaction and commitment.
They also had access to a survey of employees in November the previous year,
before the plan was pitched to staff. ‘‘There was clear evidence that across the trial everything went up as we expected,’’ says Haar, ‘‘but when we looked back from November there’s this massive jump.’’
Key numbers improved across the board: in the November staff survey, approval of empowerment and leadership was at 68 and 64 per cent respectively; at the end of the trial they had improved to 86 and 82 per cent.
In other results, stress had dropped by seven percentage points during the trial and worklife balance was up by 24 points.
Haar is planning a threemonth follow-up this month to see if those numbers are maintained. He would like to do further, regular reviews.
Barnes will be looking at those follow-up figures with interest, as well as those detailing impacts on productivity and the bottom line.
Both are worried that staff might become complacent, that old, unproductive habits might return and any gains in productivity might be lost.
‘‘I’m a businessman, this is not a charity,’’ says Barnes. ‘‘If productivity drops, I can go back to the team and say it’s not working, and we need to have everybody back in for five.’’
But Barnes believes that his staff have enjoyed the carrot too
‘‘I have an empowered, energised, motivated and more loyal workforce; I’m struggling to see a downside.’’
Perpetual Guardian boss Andrew Barnes, left
much to drop their standards and fall to the stick.
Haar says empowering the staff to find innovative ways to make the trial work was the ‘‘secret sauce’’ in the venture, but the ‘‘magic’’ was working for four days and being paid for five.
He believes that is unique, and is what inspired the interest from overseas, because staff working a shorter week is nothing new around the world. While Kiwis toil for an average 43 hours a week, their counterparts in the Netherlands clock in at 29 hours.
Under Dutch law, workers can lower their work time while retaining hourly pay rates, healthcare and other benefits. It’s a similar story in other European nations, including Germany, Norway and Denmark. Their averages are just over 30 hours while maintaining healthy pay rates.
Some German metal workers have only recently secured a
28-hour week, although only for two years, and pay is based purely on hours worked.
When the Irish were working
44-hour weeks they probably didn’t consider themselves lucky. Today it’s down to 34 hours and the average wage is
NZ$77,000. No wonder their eyes are smiling.
In the US, Google and Amazon have experimented with reduced hours for some of their workers, in which they retain traditional benefits but take a small hit on pay. And some Kiwi companies have either tried a shorter working week or are doing it now.
The benefits of shorter weeks are supported by plenty of research here and overseas. Barnes was himself motivated by studies showing employees were productive for only a few hours a day and that productivity flagged if people worked too long.
Haar concedes there is little to support Perpetual Guardian’s particular model because few have cut hours so dramatically while maintaining pay, but he says studies are clear on the folly ‘‘across the Western world of working these stupidly long hours. In New Zealand, it’s something like 20 per cent of managers working 50 hours and more a week’’.
That increases the risk of stress, injury and illness, says Professor Allard Dembe, of Ohio State University. ‘‘Most of the studies I have performed suggest that dangers are most pronounced when people regularly work more than 12 hours a day or 60 hours a week,’’ he told The
Conversation website.
In a review of other international research he found the risk of heart disease, cancer and other serious ailments was raised considerably if people worked more than 40 hours a week.
Not that a four-day week is the complete answer or works for everybody. Especially if it merely crams 40 hours of work into the shorter week. That can create its own stresses.
The American state of Utah tried that in 2008. Former governor Jon Huntsman launched the ‘‘4/10’’ week for thousands of employees in a bid to raise efficiency and cut costs.
It improved the morale of many but lasted just two years, because the state didn’t save as much as was forecast, and residents complained about limited access to services.
Barnes says the success of his model is the focus on outputs, and that’s why so many businesses in New Zealand and overseas have been interested. The Australian Government has also been watching.
BusinessNZ chief executive Kirk Hope represents many of those Kiwi firms. He is cautiously supportive, as is Sam Huggard, secretary of the Council of Trade Unions.
They can both see the benefits in flexibility, and retention of good staff. ‘‘We’ve got a labour shortage,’’ says Hope, ‘‘and businesses are working really hard to keep the good people that they have, so if something works for employees they [other businesses] will definitely be looking at it.
‘‘Every time you lose a staff member it imposes a significant additional cost to bring in and train a new person.’’
But the Perpetual Guardian model will not work everywhere, and it’s potentially bad news for the retail, manufacturing and health sectors, which employ about 300,000 people.
‘‘In the health sector, nurses have been involved in industrial action because they don’t have enough nurses on the ward,’’ Haar says. Some workplaces are totally stretched. It’s probably impossible for them to do this because they can’t even do their normal job in five days.
Barnes has heard those opinions, that what has worked for his business will not work in others. ‘‘Why not?’’ he responds. ‘‘What you’re saying to me is that productivity is not important [in those sectors].
‘I
n Germany, where they have gone for 28 hours a week, do you think they did it by saying, ‘Oh stuff it, we are going to be incredibly unproductive’, or was that a focus on productivity?’’
The focus on outputs completely changes the conversation, he says.
‘‘If we restructured the way in which people work, and therefore they had better worklife balance, yes I might need more nurses and more doctors, but is the quality of care that I get better or worse? I am saying it’s about outputs.’’
And not just for the economy. ‘‘I have working parents who can get home and pick their kids up from school,’’ says Barnes. ‘‘I can get them home to read to their children, so that’s educational outputs.
‘‘I can take 20 per cent of cars off the road every day; do we need to build another how-manylanes into Auckland, if I can stagger times people can come in?’’
He’s set on that particular path: the board is keen to make the work structure permanent, the staff are ready to play their part, but there are problems from an unexpected source – the Government and employment law.
‘‘If you put a structure in place, over time does it become a contract of employment? If it does the . . . give-and-take aspect of the model would be undermined,’’ says Barnes.
Four days would be set in stone, removing the possibility of going back to five days and the incentive for employees to stay productive and look for more innovation and efficiencies.
Holidays are also an issue, Barnes says. Employees can accrue leave for the day they don’t work.
‘‘I’m giving you holiday on holiday. We are getting advice on making this an opt-in process and we will want staff to give one day a quarter to charity, a community services project or something along those lines.’’
Employment law doesn’t have the flexibility to allow this, he says.
Workplace Relations and Safety Minister Iain LeesGalloway doesn’t agree.
‘‘I’m not convinced that that there is a lack of flexibility in current employment law that would preclude more businesses taking Perpetual Guardian’s lead.’’
He believes ‘‘establishing a salaried rate instead of hourly rates can provide the flexibility to focus on productivity rather than time’’.
Barnes believes these are kinks that can be ironed out for his staff, allowing the model to become the new norm.
That will make 240 people very happy. And the other 99.9 per cent of New Zealand workers more than a little envious.