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Is a 4-Day Work Week Better For Employers or the Employees?

Companies are wary of the rise of the 4-day work week, while workers believe it's too good to be true. But what do recent experiments actually show?

There is a new trend sweeping across some of the largest companies around the world: the 4-day workweek. While a 4-day work week may seem like something out of reach for the notoriously overworked Singaporeans, Parliament has been mulling the idea since 2020. But why is the concept of shorter work week gaining traction and who is set to benefit the most? We explore below.

What Were the Results Of Companies Who Tested the 4-Day Workweek?

A number of companies including Microsoft Japan, American-based fast food company Shake Shack, New Zealand-based financial services company Perpetual Guardian have experimented with the 4 day work week in different ways. Some companies have kept the same working hours and gave employees a day off for a total of 32 working hours per week, while others kept the 40 hour work week but condensed it into 4 days. The companies that tested out the shorter work week conducted the experiment for a couple of months before deciding whether to implement the changes permanently.

The experiments yielded a few surprising results. Despite the shorter week, companies saw improvements in employee engagement and productivity. Employers also saw more cost savings and less turnover. However, there were also some negatives. For example, some employees felt more stressed and pressured to get work done in a shorter period of time. Others felt like they had to work much longer hours to make up for the work that would have been done on the day that was taken off. Furthermore, businesses with clients who expect on-demand customer service found difficulty in balancing customer service and the extra day off for the employees. That being said, most of the companies who did the experiment and found success deemed the improvements valuable enough to permanently implement the 4-day work week.

Benefits for Employees

Some of the most notable benefits for employees were that they reported better work-life balance, less stress and improved productivity. One experiment done by the New Zealand company, Perpetual Guardian, also found that employee engagement increased 20%, which is a good indicator that a 4-day work week boosted employee morale and participation. These results can be very useful for Singaporeans, who work very long hours and experience high levels of burnout and some of the highest rates of stress-related illnesses.

This table shows the cost of stress-related illnesses as a % of a country's healthcare expenditure. Singapore is the second highest, with 18% of healthcare expenditure arising form stress-related conditions

Another important benefit that a 4-day work week provides is for older employees who have more errands than their younger counterparts. For instance, employees who are 50 years of age and older will need to take care of their children as well as their elderly parents. The extra day can give them the necessary time to run important errands like doctor appointments, which aren't always available on the weekends.

Benefits for Employers

One of the greatest concerns of the 4-day work week is that productivity will plummet due to the loss of the extra day. This could be especially concerning for SMEs who are concerned that any time lost can risk significant losses for their company. However, the opposite happens. When Microsoft Japan tried the 4-day work week experiment for the summer, productivity actually rose by 40%. Perpetual Guardian in New Zealand also found a 20% increase in productivity after running the experiment and made the changes permanent. Even more, a UK-study of companies that had implemented a 4-day work week found that the benefits associated with the shorter work week saved them a combined £92 billion a year.

Table on the Total Costs of Absenteeism by Company Size

There are also other benefits, like reduced company costs and less waste. For instance, Microsoft Japan also experienced a 23% reduction in electricity costs. Furthermore, with employees less stressed, Singaporean employers may be able to save on sick leave, which currently costs them upwards of S$125 billion per year. It may even help tackle the multi-billion dollar problem of presenteeism, which presents itself when sick (but stressed out and devoted) employees show up to work and are less productive.

Everyone Wins If Shorter Weeks Are Implemented Thoughtfully

Based on the results from the latest shortened work week experiments, the employer actually ends up gaining more than most bosses may think. The improvements in productivity and employee morale and engagement is significant enough to, at the very least, reduce costs associated with high employee turnover and sick leave. In the best-case scenario, employers may find that the improved work flow of their employees even ends up increasing profits. Thus, while the employees benefit from spending more time doing things they love, reducing burnout and feeling more engaged at work, employers may see substantial improvements in their bottom line.

That said, it is important to note that a 4-day work week won't benefit every company. Companies with a focus on customer service or those that work with clients who don't follow a 4-day work week rule may end up disappointing their clients. Furthermore, industrial, manufacturing, construction jobs and certain finance jobs may not be able to implement 4 day work-weeks since their revenue is tied to external factors.

Despite some of these drawbacks, these experiments can help pave the way to other ideas on improving work-life balance. For instance, it is possible to rotate days off for different groups of employees to avoid a full-scale shutdown for the one extra day. Another idea is to implement a 4 day work week every other week to reduce the pressure on employees who may feel stressed out by the one less day they have to reach deadlines. However, what these experiments found is that regardless of how companies tackle improving work-life balance, it's clear that what's good for the goose is good for the gander.

Anastassia Evlanova

Anastassia is a Senior Research Analyst at ValueChampion Singapore, evaluating insurance products for consumers based on quantitative and qualitative financial analysis. She holds degrees in Economics and International Business Management and her prior working experience includes work in the capital markets sector. Her analyses surrounding insurance, healthcare, international affairs and personal finance has been featured on AsiaOne, Business Insider, DW, Vice, Her World, Asia Insurance Review, the Australian Institute of International Affairs and more.