By Chartered Banker, UK

The world of work is far more jumbled than we typically acknowledge. For many industries, from medicine to hospitality and from retail to travel, the required hours do not fit neatly inside the traditional Monday-to-Friday pattern. Despite this truth – and some efficiency improvements facilitated by technology – we still largely commit to a working week born from the requirements of a century-old manufacturing industry. Is it time to reinvent the wheel?

In the US in 1926, businessman Henry Ford began to promote a 40-hour week, across five days. The six-day set-up wasn’t giving workers enough opportunity to spend their wages. To counter unemployment caused by the Great Depression, North America officially adopted a five-day week in 1932. Across the water, John Boot, founder of British pharmacy Boots, began to close his factory on Saturdays and Sundays from 1934, enabling him to keep his staff employed on the same pay, without the need for redundancies. He noticed positive effects on productivity, and subsequent studies found a strong correlation between two-day weekends and output. In 1934, the UK made the five-day week official.

Today, similar studies are taking place, but it’s the four-day week that’s up for trial. Governmental and business support for the idea has been found in countries including Iceland, the UK, New Zealand, the US, and Ireland. Can this new approach work operationally within the financial services sector?

A Question of Trust

The Covid-19 pandemic forced large parts of society to rearrange the way they work. For those in financial services, offices were largely closed; in-person meetings were replaced with Zoom calls; and some relaxation of corporate formality crept in. Millions of employees were forced to work from their bedrooms and kitchen tables as well as plan their time around the needs of their young children.

“When discussing the possibility of a four-day week, there were two questions that were typically raised pre-pandemic,” recalls Andrew Barnes, Founder, 4 Day Week Global. “Can I trust my employees, and how do I measure productivity? Covid proved that people could be trusted to go home and work; and that presenteeism doesn’t equate to output.”

Same Pay, Fewer Hours

While there are variations on the concept of the four-day week, such as reducing hours and subsequently pay or condensing five days into four, these are being dismissed by 4 Day Week Global, one of the key organisations behind a number of the trials worldwide. Based in New Zealand, the organisation was set up after Barnes led successful trials in 2018 with his financial services company Perpetual Guardian. The system is based upon what has become known as the 100:80:100 model: 100% productivity, for 80% of the time, with 100% pay.

“It started with trying to work out why so many organisations struggled with low productivity. We asked, “What would happen if we gave staff the challenge to work smarter, rather than longer?” In return, they’d get the extra day off – provided output remained the same. What happened is that we simply got rid of unproductive time,” says Barnes.

Advocates for the model claim it offers myriad benefits such as improved work-life balance, social, community and family benefits, and sustainability improvements.

Productivity on the Up?

The UK’s Charity Bank, a financial organisation and social enterprise that supports the charity sector, has recently begun a six-month pilot of the scheme. For Chief Executive Officer (CEO) Ed Siegel, the hope is that productivity improvements achieved by each participating employee will enable output levels to be maintained while working one fewer day per week.

“On one level it’s pretty simple. We’re basically saying, ‘You have a job description, or annual targets, and we expect you to continue doing the same thing but in four days per week instead of five.’” says Siegel.

“One of the crucial elements behind the 100:80:100 theory is that the three-day break makes you more productive. You come back refreshed and motivated, and ready to push through to the next weekend.”

The largest UK business to commit to a four-day week is also a financial services organisation. Atom Bank moved all employees onto a four-day contract with no change in salary last year. The bank says it has seen no drop in productivity or output since making the change.

“Statistically, you’re interrupted in an open-plan office every 11 minutes. The last two hours of the working day are the most unproductive,” says Barnes. “A lot of this is about understanding that output is different from the hours you spend at work.”

“Obviously, when you don’t have everyone in the office, you have to work out how to measure productivity. This is about a mature, modern conversation between employer and employee.”

Beating Burnout

A huge motivator behind both Charity Bank and Atom Bank’s change to their working weeks lies in the improvement of employee well-being. Due to the potential for significant reduction in sick days and absenteeism, this is thought to be something of a win-win for these financial organisations.

A significant 55% of days taken off due to ill health in the UK is attributed to work-related stress, depression and anxiety. Atom Bank’s staff surveys have suggested employees feel less stressed and look forward to their working day more since the shift to a four-day week. Pursuit Marketing, a Glaswegian business that made the change three years ago, report a 30% increase in productivity, with sickness at an all-time low.

With almost one-third of financial services and banking professionals planning to leave the industry due to high pressure, could this provide a solution to a problem that affects sectors such as financial services disproportionately: that of burnout, long hours, and employee ill health?

Recruitment Crises

Promoting the health and happiness of employees could also prove beneficial when it comes to attracting and retaining high-quality staff. Covid has accelerated discussions around work-life balance and job purpose. For an industry typically associated with tradition and corporate work practices, financial services organisations could find they need to modernise to remain competitive in the world of recruitment.

“There’s much academic debate about to what extent there has really been this ‘Great Resignation’. But whether this is true or not, you will certainly find evidence of widespread labour shortages and recruitment crises,” says Dr Tom Calvard, Senior Lecturer in Organisation Studies, University of Edinburgh Business School.

“Nothing’s more conservative than some areas of the financial services industry. Employers are going to have to come up with a new deal for employees if they want to recruit successfully.”

For Charity Bank, competing with the bigger financial institutions was undoubtedly a huge motivator. “It’s about making Charity Bank a better place to work and adopting a more modern-day approach to employment. If we are successful, we become a more attractive employer and compete better against mainstream commercial banks,” says Siegel.

“These days, post-Covid flexible working is almost an expectation. I think some of the corporate CEOs that are insisting people get back to the office have missed a trick, and they’re going to regret it.”

Interestingly, Atom Bank reported a 500% increase in job applications since making the shift.

Levelling the Playing Field

Improving inclusion and accessibility is another potential advantage of the reinvention of the working week. The financial services industry still has a long way to go on its journey to gender parity. Parental leave, flexibility for childcare, and gender pay gaps, all remain an obstacle to progress in the sector; overwhelmingly for women.

“Flexi-hours allow for the school run, or an extra day off enables everyone to spend more time with their families,” continues Siegel. “And there’s often a perception that if you’re not full time then your opportunities for promotion will be limited. This certainly evens that playing field even more.”

Similar ideas around inclusion can be applied to today’s ageing population. As the workforce grows steadily older, could a reconfiguration of the working week be better suited to the needs of employees in later age?

“People are going to have to work longer. If you’re looking ahead to a sustainable long-term career, working into your 60s and 70s, it could offer a solution to some of these problems,” suggests Calvard.

Operational Challenges Remain

So far, it seems hard to argue against the idea of reinventing the working week. There are, however, a number of potential issues when it comes to implementation and logistics. Can the concept work in roles that require a 24/7 presence? In Gothenburg, Sweden, the answer was no. A nursing home trialled a version of reduced hours for the same pay, by shortening the working day to six hours. After two years, the costs of employing new staff to fill the rota were too high to continue.

In the UK, the Wellcome Trust scrapped plans to introduce a four-day week for its 800 head office staff after deciding that it was too operationally complex. The decision was taken after a three-month study found there were also negative effects on the well-being of some staff, who were trying to compress work into less time – increasing exposure to stress.

This is the type of feedback that Charity Bank is already monitoring. “I do know that some people are finding it easier to transition than others. Some people work long hours and are having a hard time getting things done in five days, let alone four,” says Siegel. “There’s a group [of people] who are saying they’d love to do this but aren’t yet quite sure how to adjust their days and practices.”

Political and National Support

The international governmental interest in this idea has been widespread. Iceland is heralded as a global leader in this space, having trialled reduced hours since 2015. The UK is currently part of a pilot scheme involving 70 businesses nationwide, with the Scottish government offering explicit support. But there are some concerns about the repercussions a four-day week could have on overall societal inequality.

Critics cite the potential for a widening of the gap between lower-paid, gig or hourly work, and professional salaried employment. Many believe there is a need for political and institutional backing before the four-day week could be established universally.

“Certain elements, such as hybrid working policies, can be drafted relatively quickly or experimented with. But the length of a working week is more of an institutional issue,” says Calvard.

“One of the biggest negatives is that, when looking at banking and other white-collar areas, employees are being offered the same money for less time at work – compare that to people on other types of contracts, hourly or otherwise, and the divide becomes clear.”

Indeed, employment statuses and the creation of a two-tier workforce are of a pressing concern, when for many, the hunt is for more hours, not less. For Asheem Singh, Director of Economy, Royal Society of Arts, the conversation needs to be more philosophical, as he said in a BBC interview in May 2019.

“The decision needs to be taken at a national level. The question is: are we prepared to make politically tough choices about whether we valorise leisure, and spending time with our families, as part of our economy and society?”

Whatever an individual’s stance on the four-day week, what cannot be denied is that the financial services sector is faced with a growing recruitment challenge and must adapt to keep securing the best and brightest talent.

The Covid pandemic has catalysed a shift in working and living expectations. For many, there are big conversations to be had about some of life’s bigger questions. A reinvention of the working week might be just over the horizon.

This article previously appeared in the Chartered Banker magazine, UK, Autumn 2022 edition.