37% think that four-day week is unlikely to materialise in next ten years

13 Oct 2022

As the movement towards a shorter working week gathers momentum due to a number of companies taking part in four-day week trials in the UK and abroad, the CIPD has released a new report that addresses the knowledge gap in employer perspectives with a view to inform organisations and policy-makers of the challenges and opportunities that come with adopting a shorter working week.

Its key findings include:

Employees’ preferences for working patterns differ, but most are happy with their current working hours.
Many are already working a four-day week or less, and equally, many work more than a five-day week.
While the majority of people would like to work fewer hours, they are not willing to take a pay cut to facilitate this.
Employers appear ambivalent about reducing hours and see a move to a four-day week as unlikely. A shorter week also raises the question of how to manage atypical and non-salaried workers.
With the cost-of-living crisis, and a potential rise in unemployment, we are likely to see greater focus on the need to boost working hours.
One challenge for those employers that had reduced working hours was that it did not suit everybody in their organisation. As with homeworking, it may be that shorter working hours are possible in some industries more than others.

The ‘four-day week’ is a movement towards a shorter working week (in terms of total hours worked), without any loss of pay – for example, reducing a 35-hour week split over five days to a 28-hour week split over four days. The ‘four-day week’ has become shorthand for shorter working hours, but there are different ways by which organisations might achieve it. Companies are often innovative in how they implement such policies, and there is no one size fits all. It usually involves consultation with the workforce before a trial is planned, and new forms of flexible working are often brought in. The best trials feature an evaluation before deciding whether to adopt the policy in the long term. The most ambitious advocates of a four-day week believe the time has come for a society-wide move to a four-day week – after all, the six-day week was once the norm before Henry Ford brought it down to five. Advocates see removing another day as the next stage in a natural progression.

According to the CIPD’s report, only a small minority of UK employers have reduced working hours in the past five years without reducing pay, and where this has happened, the Coronavirus Job Retention (furlough) Scheme is likely to have been a factor. In all, 16% of employers have reduced working hours in the past five years, while 10% of employers have done so without reducing pay.

Over a third of organisations that reduced working hours did so for wellbeing reasons, and slightly less than a third did so to help with recruitment and retention. About a third reduced working hours because demand for their services had reduced. Looking forward, only 1% of employers plan to reduce working hours without reducing pay over the next three years.

37% of employers think that the four-day week is unlikely to materialise in the next ten years, compared to 34% who think it is likely. 29% are undecided.

Says the report:

“The dramatic rise of homeworking during COVID-19 has taught us that businesses have a status quo bias. The revealed preference for higher rates of homeworking shows that it’s what people want, but it took a forced experiment to implement. However, many employers are not opposed to the idea once the concept has been proven. Like homeworking, it may be that shorter working hours are possible in some industries more than others. Furlough acted as a natural experiment in reducing working hours. However, with a drop in demand for many organisations, there was no need to increase efficiency and maintain output, and wages were propped up by heavy government subsidy. The key challenge to implementing shorter working hours is the need to boost productivity to pay for it, which was identified by two-thirds (66%) of employers.

“The four-day week trials will be looking at productivity, but this must be balanced against the likelihood that only businesses that felt they could boost productivity sufficiently would participate in a trial. It is unclear how generalisable the results of such trials will be. As the cost-of-living crisis bites, and a potential downturn results in rising unemployment, we are likely to see greater emphasis on the need to boost working hours. This is one of the fastest and most direct ways that someone can boost their income. The finding that those on the fewest hours are most likely to want more hours further supports this. The Living Wage Foundation has pivoted to emphasise the role of both wage rate and hours worked with the launch of its living hours campaign in 2019. Some of the knottier operational challenges to implementing reduced working hours (without loss of pay) involve what to do with atypical and non-salaried workers. Should the 25% of people currently working a four-day week or less be given a pay rise? Will the four-day week benefit the most privileged managerial/director-level workers who are salaried? Perhaps these are some of the questions that the current trials will answer.”

The CIPD position is as follows:

Greater flexibility in work can play a role in increasing the inclusion of marginalised groups and catering to more people’s preferences.
Most employers in our survey believe that there would need to be an increase in productivity by working smarter and/or investing in technology to facilitate a four-day week without reducing pay.
Increasing workplace productivity should be the focus for policy-makers interested in supporting a shift to the four-day working week.
There is the potential to boost productivity by raising the quality of people management and development in the UK, particularly among SMEs and through supporting employer investment in technology across the economy. This involves focusing on industrial strategy and making changes to skills policy. It will also require a change in the quality and availability of business support, to boost firms’ adoption of technology and build their people management and development capability.