Four days of work, 100 per cent of the pay — that might sound like a fantastic idea for employees. But there's a lot of benefit to a reduced work-week for employers as well, says professor John Trougakos. He joins the Executive Summary to talk about why a four-day work week is better for employees, what it means for organizations, and how companies can actually make a shorter week work.
Four days of work, 100 per cent of the pay — that might sound like a fantastic idea for employees. But there's a lot of benefit to a reduced work-week for employers as well, says professor John Trougakos. He joins the Executive Summary to talk about why a four day work week is better for employees, what it means for organizations, and how companies can actually make a shorter week work.
Show notes
[0:00] In February 2023, news broke that a wide-scale experiment that shortened the traditional five-day work week to four days – without an associated reduction in pay – was a success.
[0:50] 91 per cent of the participants in the experiment decided to continue, reporting that their employees were happier, more engaged and more productive.
[1:12] Meet John Trougakos, a professor of organizational behaviour and HR management at the University of Toronto. He’s an expert in employee well-being, productivity, and recovery, and he’s been studying four-day work weeks for years.
[1:44] His research is conclusive: to increase performance, companies need to give employees a break.
[1:52] So as companies look at their post-COVID office structure, what does this mean?
[2:27] How did we get to five days in the office, and has a four-day work week been tried before?
[3:08] Those previous attempts failed because they tried to compress 40 hours into just four days. In comparison, the latest attempts are experimenting with a 32-hour week, which might be why it succeeds now.
[3:55] Studies show that business leaders are increasingly on board.
[4:32] And the pandemic proved to be a massive change management experiment, showcasing that things can be done differently…so businesses are more open to trying something a little different.
[5:32] That’s probably important since employees want a shorter work week, especially as burnout continues to rise.
[6:24] Burnout is costing businesses billions each year.
[7:04] What is emotional exhaustion, and how does it manifest?
[8:22] Time off and breaks play a crucial role in emotional exhaustion and burnout recovery.
[9:52] So a four-day work week might be a great opportunity for businesses to give their employees time to properly recover. How do you go about implementing it.
[10:03] You have to talk to employees and don’t be afraid to seek outside help.
[10:46] Approach a four-day work week like a big change management project – it’s a great opportunity to find new efficiencies as well.
[11:58] And don’t forget to communicate – to everyone – how you’re going to pull it off.
[1:21] Avoid the pitfall of doing the work and not rewarding your employees.
[12:59] If a four-day work week doesn’t work for your company, consider alternatives that still give your employees a meaningful break.
[13:51] Companies are made up of people – they are your most important asset. So treat them well, and they will give back to you.
[14:37] “We don't want to just keep weighing people down, if you can find an opportunity to reward people for their efficiency and their productivity and their performance. People will give back more at the end of the day.”
Megan Haynes: In February 2023, researchers made global headlines when they announced that the four-day work experiment they had been studying was a success.
Over six months, they’d asked about 30 companies that employed 1,000 people collectively to give their teams an extra day off.
Some organizations opted to extend weekends, others took a day in the middle of the week off, and some opted to create a flexible schedule to accommodate for external client needs.
But what they all had in common was a reduction in the number of hours employees actually had to work – without the associated reduction in pay.
It was a financial risk: these companies are basically giving their employees a collective raise in the form of fewer hours… But it seems to have paid off.
John Trougakos: What they report is that 91 per cent of companies decided to continue with this. They report overall productivity increases, they report employee well being benefits, they report that there are, reductions in turnover and increases in employee recruitment and being able to hire better quality employees.
JT: I’m Professor John Trougakos. I teach in the organizational behavior and human resource management area at Rotman and at the University of Toronto, Scarborough. I study employee wellbeing and productivity and look at the future of work and how organizations can make employees work life better, not just for the employees, but also better for organization's success in the long run.
MH: John has long studied the impact of stress and recovery in a workplace setting and has been actively involved in a number of projects looking at a reduction in work hours, including some here in North America.
His research is pretty conclusive: to get the best performance out of employees, organizations need to give them a break.
As we emerge from a pandemic-induced work-from-home fog and put our attention onto creating a future office structure that works better than before, it might be time to consider a world in which we’re working smarter, not harder.
Welcome to the Executive Summary. I’m Megan Haynes, editor of the Rotman Insights Hub
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MH: This isn’t the first time a reduction in work days has been floated.
In the 1920s – nearly 100 years ago, in fact – factory workers went from six days on the floor to five, cementing the current five-day, eight-hour schedule we’re all familiar with.
And the four day work week had a moment in the ’70, and again in the ’90s, with businesses and legislators in the US calling for fewer days in the office or on the factory floor. Those efforts failed, but the conversation around reducing time at work has continued to float around, and really picked up steam during the past few years. So what’s different this time?
For one, companies are approaching the way we talk about these experiments differently – namely the conversation has shifted from giving employees an extra day off, to actually reducing the hours they work.
JT: Unlike some more old fashioned type projects, they’re not reducing workdays and compressing the hours into four workdays. What they’ve done is they’ve actually kept, the same amount of pay reduced hours by one day, and reduced work by one day.
MH: It’s that shift in total hours worked – from the traditional 40-hour week to 32-hour week – that John sees as the key differentiator between success and failure.
JT: So they have the four day work week, they have eight hours a day and 100% of the pay, but they do it with the idea that they’re going to provide 100% productivity.
MH: That has a lot of appeal to an organization trying to sell this idea. More efficiency, more productivity, healthier happier employees.
And business leaders are increasingly open to the idea of a reduced work week.
JT: I partnered in a study with Staples Canada and Angus Reid last year. About a quarter of employers who were surveyed said that a four day workweek was a must have over the next one to two years.
MH: John points to another study which found that nearly 91 per cent of senior managers in Canada support the idea of a four day work week, and 69 per cent believe a shift is coming within the next five years.
But really, the reason the four day work week is having its moment now, is that – thanks to the pandemic – the business world is just a little more open to change.
JT: The pandemic really ripped the lid off the way organizations do business and the way they work. We just couldn't do the status quo, it just wasn't feasible anymore. And when you have billions of people all over the world, trying to figure out new ways to work literally overnight, we created basically the world's largest change management experiment, And once that open that mindset of organizations and of employees that, okay, let's do things differently, a lot of organizations look for ways to create extra benefits for their employees to create extra competitive advantages for themselves.
MH: Essentially, it becomes harder to say, no the old way is the only way, when we just spent the past three years proving that statement wrong.
MH: And this attitude might make the difference between an organization that can keep its employee base happy, or not.
JT: We found that about a third of employees felt that this was going to be a must have for them in the next one to two years. And I think by and large we look at those numbers, and they've increased since then. I think that we're finding that employees are looking for better work life balance, they're looking for being able to do their job in a way that is going to let them be more productive and more efficient and be less stressed and less burnt out
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MH: Even before the pandemic, people were burning out. One 2019 survey found that 95 per cent of Canadian workers felt at least somewhat burnt out, with 22 per cent saying they were very burnt out. COVID-19 likely worsened things, and by 2022 a third of Canadians were feeling very burned out. And that is costing businesses billions each year.
JT: In Canada, maybe it's like $8 billion dollars a year, maybe $14 billion dollars a year. In the United States it's like $300 to $500 billion a year. Some people peg it even much higher than that.
MH: When people burn out, they don’t perform at their peak, they make more mistakes, they withdraw from their jobs. Workplace and safety accidents increase, absenteeism and sick leave trend up.
JT: People eventually leave the company. And that's a loss of expertise, that then the company has costs to recruit a new person, select a new person, train a new person, wait for them to get up to speed so they can do the job effectively. And so when we look at these costs, I mean, it's quite substantial.
MH: Burn out can come from a number of different factors, but John says a key contributor is emotional exhaustion, which is…
JT: … a state of feeling emotionally worn out and drained as a result of accumulated stress from your personal life or your work life.
MH: We all know the feeling.
JT: If you've ever had that long day at work, and you go home, and you just need nobody to talk to you for like a half hour, you just can't deal with anything. That's basically an indicator of emotional exhaustion, right? You just don't have the resources or the energy to deal with one more thing
MH: According to John’s research, emotional exhaustion builds relatively predictably throughout the day – and it kind of looks like a bell curve.
Most folks start out feeling ok, and the longer the day drags, the more emotional exhaustion accumulates. At the end of the day, you go home, and the curve starts trending downwards until you reset.
In an of itself, emotional exhaustion isn’t a problem – the issue comes when we don’t have the ability to reset regularly.
And emotional exhaustion tends to be cumulative – without that chance to rest, you likely start even higher and higher on that bell curve, and it takes longer and longer to get back to a baseline.
JT: Breaks are absolutely critical. They help break the cycle of our resource drain, they help break the cycle of our stress.
MH: Breaks take a lot of forms – they can be mini breaks throughout the day to stretch your legs; a meaningful lunch hour, evenings with families, long vacations…and of course weekends or days off in the middle of a work week.
JT: That's a time that people can really detach and get away from work or they should be. Spending time with family members, and just generally being able to relax I think is also really important and sometimes under identified in the wider society as something that lets us perform better at work. Those longer type breaks are really important in helping us break the stress cycle, reduce emotional exhaustion, beat burnout, in a sense.
MH: John’s research has found that when given proper time to reduce their emotional exhaustion, employees are found to be happier, healthier, more productive and more engaged. Ultimately, they are more likely to bring their peak selves to the job.
JT: That's not surprising, because even if you look at something like professional sports, you know, we talked about how the best athletes are just as important for them to rest, whether it's through practice, or in games, or whatever it be, so that they can be at their peak when the team needs them most critically. And we don't really apply that in organizational settings the same way.
Musical interlude
MH: So, for organizations that want to help give their employees more recovery time – this might be where the four day work week comes in.
So how do they go about implementing it.
Step one: talk to your employees – they are, after all the people who will be most affected by any work-week change.
JT: If I were to kind of say a first thing to do, would be to get employees engaged right away, right? Get people on board, this is this is going to be a change.
MH: Some employees will be on board, some won’t, but your team members will be the first to identify potential pitfalls – and solutions – to a structural change such as this.
Step two: Get help.
JT: You don't have to reinvent the wheel yourself.
MH: There are plenty of organizations and literature looking at the four day work week or reduced hours. Find a partner. Read up on how it’s been done successfully. Don’t go it alone.
John cautions that organizations need to treat this as a big change management project – you are literally re-jigging the way you work, trying to find efficiencies, and developing metrics. It can’t just be something you say on a Friday “hey, starting next week, everyone gets Wednesdays off.” For this type of initiative to succeed, leaders need to have a solid plan.
JT: Really figuring out what the metrics are, setting it up well, so that you can capture how well things are working and where things need to be tweaked. And then I think the other thing is, realizing that it's not going to be perfect right away, right? I mean, like anything, there's going to be bumps in the road, and then being able to have the data to inform you how to adapt what you're doing to make it work more effectively is important
MH: Finding efficiencies is going to be very company dependent – maybe it’s recognizing that all those meetings are being poorly time-managed and coming up with a more formal structure to keep employees’ calendars clearer. It might be streamlining processes, so folks aren’t spending so much time on paperwork. Maybe it’s identifying and cancelling projects that aren’t adding value but taking up a lot of your employees’ energies.
Next you have to talk about it.
JT: Really coming up with the key points of communication and coordination for how everything will occur. They've got to communicate internally and externally, some of the examples, some of the companies I've talked with that have done this really made a concerted effort to communicate to their stakeholders and coordinate with them what was going to be happening and let them know, we're switching to a four day work week, but your service isn't going to drop. And here's how we're going to cover this.
MH: And, John says, avoid the key pitfall that you’re not asking your employees to do the leg-work of preparing for a four day work week, without seeing some sort of personal gain.
JT: If we go through all this work to find all these efficiencies, and then there's no benefit for our staff, other than more work, they're gonna be like, well, what's the point of this? I am now working way more than I was working before.
MH: Crucially, that means avoid condensing those 40 hours managers are used to into four days. The key isn’t that employees gain an extra day off – it’s that they see a reduction in working hours.
To that end, John says organizations don’t have to jump right into the four-day a week fold right away. There might be an option that works better for your organization – like a six hour/five day schedule. Companies can also experiment – perhaps starting with every other Monday off, or half day Fridays.
Whatever the form, a final element of making this a successful shift, is letting employees feel a sense of control over that time off.
JT: Autonomy really is the linchpin, a lot of times of the nature of recovery that people experience. If we do things that we actually want to do, that is more recovering.
MH: Reducing the hours worked isn’t going to be easy. That extra day off costs money; finding efficiencies will cost time and effort; getting buy in from stakeholders and clients will cost political capital and trust. But it’s likely to pay off
JT: I think that’s one of the things that often gets lost in this is that the overall benefit to the organization is that it benefits your employees and organizations are made up of people. There's no such thing as an organization without the humans that run that organization. And if those people are not healthy, if they're burnt out, if they're stressed out, if they're not able to be productive, the organization is not going to be productive,
Employees are no longer willing to accept just being commoditized in a lot of ways. You're gonna find people with to work for your organization. The question is, are you going to find the right people, the best people
Having the best employees do the best they can possibly do. That should be the objective of every organization. And I think when we don't focus on that, we're gonna get subpar outcomes as organizations and it's going to cost us more in the long run.
We don't want to just keep weighing people down, if you can find an opportunity to reward people for their efficiency and their productivity and their performance. People will give back more at the end of the day.
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MH: This has been Rotman Executive Summary, a podcast bringing you the latest insights and innovative thinking from Canada's leading business school.
Special thanks to Professor John Trougakos. Join us next month as we chat with Professor Walid Hejazi about the long-predicted recession that wasn’t…at least not yet.
This episode was written and produced by Megan Haynes. It was recorded by Dan Mazzotta, and edited by Avery Moore Kloss.
For more innovative thinking, head over to the Rotman Insights Hub, and subscribe to this podcast on Spotify, Apple or Google Podcasts.
Thanks for tuning in