Yahoo Finance Aussie companies begin offering 4-day weeks
It sounds like a dream: work four days a week, get paid for five.
But for an increasing number of Australian and international companies, the concept of the four-day working week is swiftly gaining traction and becoming reality.
In the upcoming hiring wars, it could be the deciding factor for Australia’s most skilled workers.
Debt-recovery fintech InDebted officially launched its four-day week in October in a bid to attract and retain high-performing and committed workers.
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The international company has around 150 employees, and unlike other debt collection agencies, workers are paid commission based on how happy the people owing debts are with the service, rather than the value of the debt recovered.
During the COVID-19 lockdowns, CEO and founder of InDebted Josh Foreman noticed that workers would begin to put in leave requests when it appeared the lockdown was close to ending. When the lockdowns got extended, the requests were understandably cancelled.
However, not too long after, workers would begin putting leave requests in again - even though they were unable to go anywhere.
“People taking two weeks off to sit inside a house is a really good leading indicator that people are just tired,” Foreman told Yahoo Finance.
“[Additionally], an identifiable theme across the really good talent in our business was that they wanted to explore passions outside of work, whether that was starting their own businesses [or doing charitable work],” he said.
InDebted wanted to keep these workers engaged with the company, but also provide them the time to actually live their lives outside of work too.
At the same time, the start-up had just completed a $25 million funding round, and thoughts were turning to scaling the business again and what that meant for hiring.
Combined, these factors meant they needed to do something to “dramatically” move the needle, and InDebted decided to look into a four-day week.
“The question that I posed to a lot of our team was, ‘Think about the number one performer in your team, think about a good performer in your team and think about an average performer in the team. Do you think there is roughly a 20 per cent difference between good and great and average?’
“Most people came back and said, ‘Yeah, if not more.’”
The leadership team thought, why not hire a great engineer to work four days, rather than an average engineer to work five?
Measuring success
The company’s four-day experiment is still in its infancy, but it will track its success through the quality of the hires it is able to make and how quickly it can fill those positions, while also monitoring productivity and worker engagement.
It’s a similar story at innovation and management consultancy Inventium.
Across both companies, workers aren't expected to work longer days, although the odd fifth day may occur during really busy periods.
The Australian business began its four-day week experiment in July 2020 when founder and CEO Amantha Imber realised the company needed to do more to motivate and engage workers who were deflated by the COVID-19 pandemic.
“We decided that we would run an experiment from July 2020 until December 2020, and we tracked a bunch of hypotheses,” Imber told Yahoo Finance.
“Basically it exceeded all our expectations.”
Productivity increased, on average, by 26 per cent, while employee engagement had also seriously improved, to the point where Inventium now ranks in the top 1 per cent of management consultancies by engagement.
Stress levels reduced 18 per cent, while collaboration remained steady - despite workers having less time at work.
And over the first six months of the experiment, Inventium met its financial goals two months early.
A global movement towards four-day weeks
Inventium isn’t alone in realising these results.
Microsoft Japan trialled a four-day week in 2019 and found productivity increased by nearly 40 per cent.
In June this year, Japan proposed a broader shift to embrace the four-day work week. In the country’s annual economic policy guideline, it said such a policy would encourage people to spend more time socialising, spending money and more time with their families.
It’s a notable shift from Japan, which has its own word for working to the point of death: karoshi.
Long weekends also have environmental benefits, according to research published by the World Economic Forum. That’s largely because we would have more time to prepare our own food and wouldn’t need to commute into the office.
And according to New Zealand Prime Minister Jacinda Ardern, there’s also a compelling economic rationale behind a wider acceptance of four-day work weeks.
“I hear lots of people suggesting we should have a four-day work week. Ultimately that really sits between employers and employees. But as I’ve said, there’s just so much we’ve learnt about COVID and that flexibility of people working from home, the productivity that can be driven out of that,” Ardern said in May last year.
“I’d really encourage people to think about that if you’re an employer and in a position to do so. To think about if that’s something that would work for your workplace because it certainly would help tourism all around the country.”
How do you actually get five days of work done in four?
It’s impossible to work at 100 per cent for five days a week, Imber said.
But, naturally, if you compress five days into four, workers will be more motivated to get it done and will find ways to cut the fat from their workdays.
At Inventium, that meant overhauling the approach to meetings. If a meeting could be an email, it became an email.
And if a 60-minute meeting could be done in 10, it would be done in 10. Recurring meetings could be cancelled if no one had anything new to report.
More broadly, Imber believes the biggest productivity gains can be made simply by prioritising bravely.
“It's really easy to not prioritise effectively, and just try to do lots of different things. It's also an easy way out for managers to say, ‘Well, everything's important,’” she said.
“It takes a very strong leader to say, ‘Out of all these 20 things that are absolutely mission critical, let's just focus on this one thing and doing it really well.’”
The InDebted workforce also cleared much of the fifth day simply by making their weekly meetings either fortnightly or monthly.
The most important thing businesses considering a four-day work week can do is to approach it as an experiment and be clear on the reason behind it, Imber said.
Foreman agreed, calling on businesses - and in particular technology businesses - to find new ways to share their gains with their workers.
“I'm not going to proclaim that this is what everyone should do… [But] we disrupted an entire industry by leveraging technology. And I think part of that has to be given back,” he said.
“Particularly given some of the situations that high growth tech companies in Australia are facing from a talent perspective... we need to sort of think outside the box.”
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