Perpetual Guardian sparked global media fascination when Barnes introduced its flexible work model, after it successfully trialed and implemented the four-day week, resulting in a 20% lift in employee productivity, a 27% reduction in work stress levels, and a 45% increase in employee work-life balance. In this article, Andrew Barnes, architect of the 4 Day Week, explains why it is a viable business solution for the post-COVID-19 world.
The long-term impact of COVID-19 on how we work is likely to be profound. I have been arguing for some time now that the way we work today is no longer appropriate for the twenty-first century – and that the solution is to introduce a shorter working week: the 4 day week.
At the beginning of 2018, I initiated an experiment in my company, Perpetual Guardian (New Zealand’s largest trustee company), to determine if I could get better productivity from my employees in exchange for a four day week with five day’s pay. We called this the 100:80:100™ rule – 100% pay, 80% time, 100% productivity. I had no broader aspirations than to see if this would work in my company, and I initiated a trial lasting two months. If the outcomes were positive, I was prepared to introduce it permanently.
As I identified in my book, The 4 Day Week, the results, backed up by external academic research, were conclusive and my company moved to operating the 4 Day Week (productivity policy) on a permanent basis in late 2018.
The fact that this 4 Day Week policy became the focus of international media attention over the last two years came as a surprise. The idea has now reached an global audience in 85 countries, with tens of thousands of news articles and social media posts, political debate in many countries, and thousands of companies around the world initiating their own four-day week policies.
Upon reflection, it is clear this enthusiasm stems from the simple fact that the way we work is no longer fit for purpose for the twenty-first century, and this transcends borders and cultures. Increasingly this is recognised by business; by way of example, at the beginning of 2020 a 70,000-strong multinational company canvassed its employees around the world as to how the business should adapt, and 80% responded by requesting a four-day week.
This is, I believe, a response to the ‘always on’ culture of modern life, where work intrudes through the medium of email and our smartphones into our home and leisure time. The imperatives of having both partners in a family needing to work to meet the costs of housing, health, education, as well as leisure, comes at the expense of having time to devote to family care responsibilities, or simply to recharge our increasingly exhausted batteries. This translates into the ‘silent’ pandemic of stress and mental health, with one in four or five of global workforces suffering from mental health issues.
The impact on our planet and our economies is also acute; our cities are increasingly congested with ever longer commutes necessary given the lack of affordability of housing, and in turn this contributes to a significant increase in carbon emissions. A recent study of the benefits of flexible working estimated it could contribute US$10.04 trillion to the global economy by 2030 and this was reinforced by a study which demonstrated a positive association between the availability of flexible working (both remote working and schedule flexibility) and by long term financial performance.
The principal premise of the 4 Day Week is to prompt a discussion about improving productivity. The numerous successful implementations around the world illustrate that incentivising employees to eliminate unproductive activities in exchange for a shorter working week pays significant dividends. Microsoft Japan’s experiment, requiring the use of Microsoft Teams, and eliminating meetings over thirty minutes and with more than five attendees generated a 39.9% improvement in overall productivity.
Implementation itself is comparatively straight forward – the most effective strategy is to utilise a trial (of between two to three months) with employees challenged to identify how they would work differently to deliver agreed productivity in four days rather than five. This recognises that in most work environments there is significant unproductive or ‘busy’ time, for example long meetings which deliver nothing to the bottom line.
The hardest part for leaders, who are used to having control over processes and making decisions, is that the trial and policy has to be led by those who will implement it: the employees. Leaders also have to understand that not all managers or employees will find it easy to adopt to the new way of working, with its emphasis on productivity, and the trade-off which underpins it – namely that failure to deliver on productivity objectives at the mutually agreed levels will result in the loss of the 4 Day Week.
As we talked to businesses about our experience it became clear that the most obvious challenge to the implementation of a 4 Day Week was the underlying prejudice and scepticism of managers themselves. Conditioned to a world where working longer equates to working harder, and hours spent in the workplace is a surrogate for productivity; business leaders were not confident in taking the leap into a world where these two preconceptions are jettisoned.
Fast forward a couple of years and companies find themselves in rather different circumstances. Employees are now working from home as a consequence of COVID-19 – with employers having ‘tested’ their capabilities for remote working over a maximum of a few days. These test days are at best an exercise in determining whether or not a company’s systems can cope with remote working; they do not provide an effective test to determine whether or not the company’s most critical resource, its staff, can adapt effectively.
This, for many business leaders, is very unsettling. They have inadequate tools to assess productivity now that the simple expedient of monitoring the number of hours an individual staff member spends in the workplace is removed. They also now have to trust their staff to work diligently without the ‘comfort’ (for the employer) of that supervision. How business reacts to this crisis and the challenges (and opportunities) it presents will be a significant element in determining their future success or failure – and it will test whether business leaders will really learn from this experience.
As productivity, combined with a reluctance to trust employees to work diligently away from the scrutiny of management, were the major impediments to companies implementing the 4 Day Week, I believe more and more businesses will recognise the future of work will be different to the past and will seek to harness the better hourly productivity of employees working from home with flexible working arrangements. For example, Optus, an Australian telco, recently announced that it would not be returning to its offices post COVID-19, but would retain home working as a permanent policy.
It is an unfortunate outcome of COVID-19 that many businesses may need to reduce working hours (and pay) in order to preserve jobs as the recovery commences. It is my hope that enlightened leaders will seek to marry the improved productivity with a shorter week – and as wages return to normal, to maintain reduced hours as part of the deal.
In many countries and industries there will inevitably be a necessity to pivot businesses and retrain employees to adjust to the changed circumstances of the post COVID-19 world. Here again the 4 Day Week can play its part by providing more structured time for upskilling of a workforce, without the disruptions which occur with ‘on-the-job’ training. This will be especially important for these industries where the future is more acutely threatened by the onset of AI, and where the employees may ultimately need to seek employment in other industries or sectors.
We have been running the policy for more than two years in our business and the outcomes have been highly beneficial – not only for productivity, but because the philosophy underpinning the 4 Day Week leads to stronger team engagement and resilience. This in turn meant adapting to home-based working during the COVID-19 lockdowns was comparatively straightforward. Both managers and employees have a strong grasp of what productivity is and our business has not suffered.
In our post COVID-19 world, businesses are having to learn to adapt quickly and often without having had the benefit of developing processes, procedures and, most importantly, culture, in a structured fashion.
For businesses like Perpetual Guardian that have already implemented the 4 Day Week, many of these questions have already been asked and answered. We understand our productivity goals, we have already developed processes to cover staff absent from the office – whether for their day off pre COVID-19, or dealing with childcare, sick family members, or self-isolation post COVID-19 – and have heightened levels of corporate resilience. They have demonstrated a concern for the wellbeing of their employees which will stand them in good stead through these difficult times. Their staff understand the imperatives of covering for their colleagues and working together to ensure their customers are looked after and supported.
Businesses adjusting to the post-COVID-19 world should therefore be asking themselves whether this represents an opportunity to use their recent experience to challenge existing preconceptions and to implement more flexible resilient and balanced ways of working.
But, more importantly, in an era where profitable recovery is going to be central to business leaders’ objectives, the 4 Day Week is a proven strategy to increase productivity and profitability in a sustainable fashion.
SHORTLISTED FOR THE BUSINESS BOOK AWARDS 2021
In The 4 Day Week, entrepreneur and business innovator Andrew Barnes makes the case for the four-day week as the answer to many of the ills of the 21st-century global economy.
Barnes conducted an experiment in his own business, the New Zealand trust company Perpetual Guardian, and asked his staff to design a four-day week that would permit them to meet their existing productivity requirements on the same salary but with a 20% cut in work hours. The outcomes of this trial, which no business leader had previously attempted on these terms, were stunning. People were happier and healthier, more engaged in their personal lives, and more focused and productive in the office.
The world of work has seen a dramatic shift in recent times: the former security and benefits associated with permanent employment are being displaced by the less stable gig economy. Barnes explains the dangers of a focus on flexibility at the expense of hard-won worker protections, and argues that with the four-day week, we can have the best of all worlds: optimal productivity, work-life balance, worker benefits and, at long last, a solution to pervasive economic inequities such as the gender pay gap and lack of diversity in business and governance.
The 4 Day Week is a practical, how-to guide for business leaders and employees alike that is applicable to nearly every industry. Using qualitative and quantitative data from research gathered through the Perpetual Guardian trial and other sources by the University of Auckland and Auckland University of Technology, the book presents a step-by-step approach to preparing businesses for productivity-focused flexibility, from the necessary cultural conditions to the often complex legislative considerations.
The story of Perpetual Guardian's unprecedented work experiment has made headlines around the world and stormed social media, reaching a global audience in more than seventy countries. A mix of trenchant analysis, personal observation and actionable advice, The 4 Day Week is an essential guide for leaders and workers seeking to make a change for the better in their work world.