This New Zealand company introduced a 4 day working week, to incredible results
In the USA in the 1920s – when 6 day working weeks were the norm – Henry Ford, the king of consumerism, had a radical proposal. He planned to give his workers the entire weekend off, but still give them the same pay. He didn’t do this out of the kindness of his heart, but because he’d tested the two working weeks, and found he could get ‘at least as good production in five days as in six.’ Why not boost worker morale if there was no loss in productivity?
Early this year, Perpetual Guardian – a wills and trust fund firm in New Zealand – decided to carry out their own Fordian experiment. This time, they saw their entire workforce, across 16 offices, retain full pay whilst only working a 4-day week. And the results were pretty incredible…
The 40 hour, 5-day working week has been ingrained in our society for nearly a century, but questions about the work-life balance increasingly loom over it. Numerous studies show that long working weeks increase our risk of stress, mental illness and having a stroke. More broadly: do we truly feel in control of our lives when we’re attached to our place of work for 5 days out of 7? Does the working week damage our ability to have a healthy family life? Does our devotion to hard work actually damage productivity?
The statistics remain pretty clear – more hours don’t necessarily mean more productivity. Germany has the shortest amount of working hours out of all OECD member countries, yet ranks among the highest for productivity levels. (British workers average 1,676 hours a year, their German counterparts just 1363 – yet the German worker is 27 percent more productive).
Andrey Barnes, the CEO of Perpetual Guardians, had been reading national productivity reports and internal surveys. He knew and accepted the fact that family and life commitments were being dealt with within office hours. He also believed that ‘if you give people the chance to be as good as they can be outside the office – because they have more time – then you are going to get a better performance in the office.’
Armed with favourable data and his instincts, Barnes decided to run an unprecedented productivity trial. He felt it was ‘the right thing to do,’ for his employees and his business. All employment conditions at the company remained unchanged – including compensation – but over 250 employees had an extra day a week to catch up on chores, spend time with loved ones or pursue hobbies they may not have normally had time to pursue.
Management knew that they ran the risk of increasing the stress related to achieving objectives in fewer hours, whilst reducing general output due to time constraints. Academics studied the trial attentively, constantly collecting qualitative and quantitate data.
Because to everyone’s surprise – and relief – general output didn’t decrease, and stress levels definitely didn’t skyrocket. Job and life satisfaction rose on all fronts at home and work, with employees performing better and enjoying their days in the office more. Before the test, only 54% of employees felt they could effectively balance work and life obligations. After the trial this became 78%.
Stress levels plummeted while stimulation, energy and overall life satisfaction increased remarkably. Barnes was stunned: ‘what we’ve seen is a massive increase in engagement and staff satisfaction about the work they do, a massive increase in staff intention to continue to work with the company, and we’ve seen no drop in productivity.’
Once the trial had finished, the next step was obvious – Barnes wanted to make the 4 day week a permanent fixture of Perpetual Guardians.
Barnes said the findings of the trial would be available to any other interested companies. He hopes that the results at Perpetual Guardians could lead the way for a labour revolution across New Zealand and the World – not unlike Henry Ford’s, 100 years ago.