This is a guest blog from LegalEdge, who offer a practical, affordable legal solution for growing companies, particularly in the technology sector, and with whom Postlethwaite has collaborated with when looking after clients for a number of years.
Many people experienced very different ways of working during the pandemic. And we’re now seeing some employers struggling to get staff to return to the status quo/old ways, with some embracing flexible and hybrid working and some resisting it.
So the time seems right to explore new ways of doing things. Hence, between now and November, over 3,000 employees at more than 70 employers in the UK will be taking part in the biggest ever global trial of the 4-day working week. Similar pilot schemes are taking place in Ireland, the United States, Canada, Australia and New Zealand. UK employers have committed to staff continuing to receive 100% of their pay in return for a commitment to maintain 100% productivity while working 80% of their normal hours. Academics from Cambridge and Oxford universities and Boston College in the USA will monitor the impact on productivity and well-being of staff.
A new Nirvana?
The benefits of reducing people’s working hours can be broadly categorised as helping employees, businesses and the climate:
- Reducing working hours and commuting time improves work-life balance, enhancing mental health and well-being.
- The latest generation entering the workplace do not want to work the hours that previous generations did and/or want to spend their time doing more than one job/project.
- A 4-day week is a hugely attractive employee benefit giving employers a competitive advantage in the recruitment market.
- Staff retention is likely to improve.
- Working less hours can improve productivity. Being busy or being seen to be in the office/online is not the same as being productive. Travelling to the office less is good for the environment. And having people in the office less uses less energy and creates less waste. Companies can also use smaller/more flexible office space to save on costs.
However, there are potential downsides too. The current pilot scheme follows previous, smaller studies around the world which suggested that squeezing the same amount of work into less time can intensify work and lead to more stress on workers. Wellbeing can suffer as workers struggle to meet the demands of their role and managerial pressures around performance measurement increase.
What does this mean for employers?
We will have to wait and see what the findings from the study are, but for those employers thinking about adopting a 4-day week, here are some things to consider:
- All businesses are different, what works for one may not work for another. Don’t rush into anything before you have planned carefully, consulted widely across your workforce and trialled new arrangements.
- It may be hard, from an employee relations perspective, to reverse changes later, so give yourself plenty of time to trial new working patterns and make tweaks where necessary. This will likely take significant management time/resource to implement and then manage.
- Be clear with the workforce that you are trying out changes for a limited period and the decision on any permanent change will be made by management considering the needs of the business. Clear simple communication is key.
- It may be that the 4 day working week isn’t right for your business/employees but there are other working patterns you might want to consider. For example, the 9 day fortnight – alternating between a 4 and 5 day week – so don’t rule out trialling other things. Check out Charlie HR’s blog on this
- If you decide to permanently change employees’ working hours then you will need to vary their contracts of employment, requiring HR time/resource.
- The term “4-day week” is potentially misleading. The phrase covers a 32 or 35 hour working pattern which could be spread over 4 or 5 days or other arrangements such as an extra, rotating day off. Decide if you will allow staff an element of flexibility over when they work or whether you will require everyone to work the same pattern.
- Depending on business needs, it may not be practical to allow everyone to have the same day off. If so, someone will need to draw up a rota or agree fixed days off for different employees/teams. Conversely, it might suit some businesses to insist on everyone having the same day so that the workspace can be totally closed for 24 hours.
- Not all employees may want or be able to deal with a 4-day week – they may find it too stressful to fit their work into a reduced amount of time. Employers have a legal obligation to consider the health implications and make adjustments for those who need them. Consider how will you deal with anyone who wants to carry on with their existing working hours. For example, if you can accommodate this, will you pay them more for working more? If so, this may result in discrimination/equal pay issues.
- How would a switch to a 4-day week affect part-time workers? Excluding them from being able to reduce working hours and stay on their existing salary will likely create a pay gap with colleagues, now also effectively working part-time but still on 100% of full-time salary. So this needs to be handled carefully, otherwise you could spend significant time and resources dealing with unhappy staff.
- Can your business afford to do this permanently? It may be necessary to hire more people to maintain levels of output and staffing over the long-term.
- Will holiday entitlement and other benefits stay at 100% too? Or will they be reduced? It is open to employers to be more generous than strictly required, but this is likely to be a question of what is sensible and affordable for the business.
- How will you maintain a sense of connection and cohesion in teams if staff are off on different days?
- Will there be any impact on performance management? Will managers be able to effectively access this because of employees spending less time at work?
- Will any HR policies or procedures need to be amended, for example, should you extend your standard probation period due to less visibility of new starters?
- Consider if you will want to place any additional restrictions on employee activities outside their shortened working week. Would you want to prevent them from doing other, similar, work on their day off, for example? If so, it will be necessary to ask staff to sign up to new restrictive covenants in their employment contracts.
- Ideally changes should apply to everyone across an organisation, but there may be good reasons why more senior staff, who often need to work long hours, cannot shorten their working week on a regular basis. Other alternatives such as sabbaticals and annualised hours might need to be offered to them instead. Any such terms would need to be properly agreed and documented. Any difference in treatment between different parts of the workforce carries risk.