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To some, it’s the stuff of dreams: a working week that makes every weekend a long weekend… a day for personal admin, creative pursuits, a side hustle, a day with the family, or to ease into retirement.
Would it work for you? Can you afford it? And, if you’re an employer, how would introducing this option for your employees affect your business?
For a long time, the working world centred on the glorification of being busy – long hours, replying to emails in the evenings, constantly blurring the boundaries between work life and personal life.
For better or worse, the lockdowns focused our attention on the issue. Some love the flexibility of working from home – taking a couple of hours off in the afternoon to take the kids to the park before logging on again once they’re in bed. Others are wiped out by the cross-over between personal and work life.
So it’s not surprising that employees – and, importantly, employers – around the world are looking at new ways of doing things.
In fact, we’re not just looking: some companies are trialling the four-day working week and seeing some surprising results.
When British multinational Unilever introduced a four-day week for its New Zealand workforce, employees received 100% of their pay. The results?
Unilever is now expanding the trial to include its Australian employees.
The Unilever experience benefited from earlier studies, including a four-day work week study in 2018 by law firm Perpetual Guardian which found employees spent 35% less time on non-work websites and generated greater output – despite working 32 hours each week instead of the usual 40 hours.
In the UK, the world’s biggest trial of the four-day week is currently underway by not-for-profit organisation 4 Day Week Global and UK think tank Autonomy, in partnership with researchers at Cambridge University, Oxford University and Boston College. In the 6-month pilot, due to report soon, more than 3,300 workers and 70 companies are working four days without taking a pay cut. So far the evidence is that productivity and job satisfaction are up. We’re looking forward to reading more!
Why would you embark on the adventure of a four-day working week? (Or, why wouldn’t you?!) There are practical considerations, of course. Let’s start by exploring some of the benefits:
Working more hours doesn’t necessarily translate to greater output. On the contrary, extended work days risks employees becoming unfocused and losing motivation as they try to keep up with non-work and life responsibilities.
If you’re an employer, a four-day work week can grant your workers enough time for personal commitments, leading to a heightened focus and productivity during the week.
In the case of Perpetual Guardian, mentioned above, the policy liberated the staff from their “always-on” mentality that had encouraged multi-tasking and unfocused attention. The shorter work days drew a line between work and personal time, enabling greater focus on each aspect.
As a result, workers had fewer reasons to infringe on working hours and could completely focus their attention on each week’s tasks to generate greater output.
This evolution made it easy for the Perpetual Guardian to spot and eliminate low-value tasks that would otherwise drain focus and lower productivity. Rescheduling these tasks boosted output, particularly within the first four hours of a work day, when cognitive function is highest.
Looking back even further, advancements in working and monitoring tools have made huge changes in the way we work: it takes 10 hours today to achieve 40 hours of 1950s work, which was when Australia took up the five-day work week via the Commonwealth Arbitration Court. At the time, the change was revolutionary. Is the four-day working week the natural progression? Only time will tell.
As the skills and labour crisis continues, we know that retaining talent is key to business success. It’s also important for employee job satisfaction – it’s difficult to develop those all-important work relationships when there’s a revolving door of colleagues you have to say hello and goodbye to!
For employers, the option of a four-day work week can help limit staff churn by lowering employee fatigue and burnout from overworking.
The extra day off allows your workers adequate physical and mental recovery, boosting their job satisfaction and encouraging long-term commitment.
In turn, the lower staff churn saves your business from the avoidable costs of hiring – such as advertising, interviewing, and engaging recruitment agencies. Studies indicate that these costs range between 90 and 200% of the departing employee’s salary and pile onto the severance packages.
For employees, a four-day work week frees up time to upskill and grow your career.
In Australia today, 73% of jobs will be impacted by artificial intelligence and automation by 2030. This means that the “always-on” lifestyle of a five-day work week will impair your ability to prepare for industry changes, exposing you to possible future redundancies.
Meanwhile, as a business owner, if your staff can’t find the time for upskilling, it’s likely you’ll become less competitive. This deterioration may force you into expensive outside hires, when what you need is a continuously improving workforce.
One study of HR practices dubbed this avoidable strategy as “the risky business of hiring stars.” The study concluded that high-flying hires can’t carry with them the resources that contributed to their previous success and won’t necessarily be able to replicate their performance.
In short: possibly. It depends.
For employers, if you’re only opening your office four days a week instead of five, you could save on power – after all, you won’t need to turn on the lights or the air-conditioning. That can create cost efficiencies.
For an Australian small and medium enterprise, these energy costs average 20,000 kWh/year or $ 5,850–8,500/year. Lowering these figures helps you free up funds for business development and financial planning activities such as:
This approach to management isn’t new. It’s part of the well-known lean management philosophy that focuses on continuous improvement to enhance the efficiency and quality of goods and services.
For employees, a four-day work week can help lower your carbon emissions by reducing weekly commutes. Transport accounts for 16% of Australia’s greenhouse gas emissions, with light vehicles – popular for the daily commute – taking up the largest share.
The following figures are from 2012, and things have changed since then. However, it’s a useful snapshot of the impact of light vehicles.
| Vehicle type | Emissions |
| Light vehicles | 10% |
| Trucks | 3% |
| Aviation | 1% |
| Buses and motorcycle | 0.36% |
Source: Climate Change Authority
Of course these environmental impacts aren’t as relevant if your business must serve the public every day of the week, or if you’re an employee already working from home. Like anything, it depends on your personal circumstances.
Increased productivity and improved job satisfaction, as well as environmental benefits… already thinking you’re all in? Let’s take a closer look at how you could make it happen. Here are four steps to transitioning to a four-day work week.
Whether you’re a business owner or an employee, identifying your goals and metrics will help you build a feasible four-day week plan that’s easy to sell to other stakeholders.
A financial adviser can help you identify and communicate those goals, as well as figure out how you’re going to track your progress and determine success. Here are some fundamental questions to ask, to avoid potential conflict and make it easier to start the conversation.
It’s likely you’ll need to have a starting point and then negotiate on these points. For example, in relation to “Which day of the week is off?”, some industries don’t have a Monday-to-Friday schedule – real estate is a good example. You’ll need to make sure your clients have a contact point when you’re out of the office embracing your new work life balance.
With the specifics of the four-day plan addressed, it’s only natural to engage all stakeholders. As a business owner, these are your employees, partners and customers. As an employee, you’ll need to talk to your boss, colleagues and clients.
Open and transparent communication will help you to garner the support you’ll need and to address unforeseeable conflicts. Be clear about your objectives and execution plan to ensure all stakeholders understand how the switch is likely to affect them.
With the approval of all parties concerned, it’s time to act.
The goal of your pilot isn’t to get everything right from the start; it’s to build a foundation for further improvement. Your objectives will be to figure out:
Handle problems as they crop up, but keep an open mind: it’s likely that solutions will present themselves as you go, and by bringing in the help of your colleagues and financial adviser.
Remember step 1, when you identified your goals and metrics? Now it’s time to assess. Celebrate your achievements and find where you can improve.
This knowledge will inform your decision and allow confidence in the best way forward. Whether you’re an employee or an employer, that’s what you need in order to make the switch to a four-day work week.
What’s the other thing you’ll need? You guessed it: a financial plan that delivers on the financial goals that are important to you.
If a four-day work week is an idea you’re exploring for yourself or your business, that’s a financial goal that Poole Advisory can help you achieve.
It’s also a great time to take a holistic look at how it will affect your other financial goals, and come up with a long-term financial plan that will set you up for a working life that’s satisfying and fulfilling.
At Poole Advisory, we’ve been offering financial advice to businesses, families and high-net-wealth individuals for over 20 years. We help our clients evaluate their financial situations and develop strategies that build prosperity.
“Poole has identified for us ways we can build our wealth that we never would have thought of. We are now planning to fully retire in the next 12 months.” Veronica M, Poole Client
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Contact us today to learn more about our holistic approach to wealth development through the Poole Wealth Portal.
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This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.