[Jjinbit] "Productivity and Satisfaction Up" The 4-Day Workweek Experiment Also Included 'This'

Editor's Note[Jjinbit] is short for ‘Jung Hyunjin’s Business Trend’ and ‘Real Business Trend.’ This segment showcases trends in ‘work’ such as organizational culture and HR systems after the pandemic. Based on analyses from foreign media and major overseas institutions that have not received much attention so far, we will deliver fresh and differentiated information and perspectives.

[Asia Economy Reporter Jung Hyunjin] "During the four-day workweek trial period, sales increased by an average of 38% compared to the same period last year, and participating companies gave this experience a score of 9 out of 10. Seven out of ten employees said that to return to a 40-hour workweek, a 10-50% salary increase would be necessary."

Four Day Week Global, a nonprofit organization conducting four-day workweek experiments worldwide, announced the results of some companies’ trials at the end of last month. The experiment involved 969 employees from 33 companies located in the U.S., Ireland, Australia, and other countries, conducted over six months. The core idea was to reduce working hours to 80% of the original, implementing a four-day workweek while maintaining 100% of pay and productivity.

"The pilot program was a great success." Four Day Week Global self-assessed this experiment as successful because it maintained the experimental conditions while boosting productivity and employee satisfaction. Every time a four-day workweek experiment is conducted, the first sentence of the announcement mentions productivity. In 2019, Microsoft (MS) Japan conducted a similar experiment and highlighted that "sales per employee increased by 40%, and costs decreased," which is in the same context.

Changes in working hours have a tremendous impact on corporate management and the lives of executives and employees. If you are considering adopting a four-day workweek, you should carefully examine not only the results of increased productivity and employee satisfaction but also the elements embedded in the experimental process.

1) Most Participants Are Small Businesses... Is It Applicable to Large Corporations?

Let’s look at the characteristics of the 33 companies participating in this experiment. More than half of these companies, 17 in total, are small businesses with fewer than 10 employees. Companies with 10 to 100 employees account for over 40%. Only two companies among the participants have more than 100 employees. This means the experiment was mainly conducted among small and medium-sized enterprises.

Barry Frost, founder of Rent-a-Recruiter, an Irish company with 24 employees participating in the experiment, told U.S. economic media Business Insider in an interview that "reducing working hours provides a 'competitive advantage' to small and medium-sized enterprises like ours when trying to attract talent," and that adopting a four-day workweek became a differentiating factor. In small businesses, the four-day workweek is used as a kind of welfare benefit in the talent competition.

Changes in work systems inevitably vary depending on company size, considering communication and diversity of tasks within the company. Taking this into account, Bloomberg reported on the 4th (local time) that Four Day Week Global is currently negotiating to conduct experiments next year with companies having 1,000 to 35,000 employees.

There is a company already conducting a similar experiment internally: Unilever, the maker of Dove and Vaseline. Unilever decided last month to expand the experiment from its New Zealand branch to Australia. While the New Zealand branch had only 81 employees, 500 employees will participate in the Australian experiment. The scale of the experiment has increased. It remains to be seen whether this experiment, which has mainly been conducted in small companies, can be well established in large corporations.

2) Where Was Time Reduced the Most?

So, what did companies mostly cut back on in this experiment to reduce working hours? Meetings. Last September, Bloomberg cited a survey by Professor Steven Rogelberg of the University of North Carolina, who surveyed 632 employees across 20 industries and found that employees spend an average of 18 hours per week in meetings. The research team estimated that this results in an annual loss of $25,000 per employee (about 33 million KRW), and for U.S. companies with more than 5,000 employees, an annual loss of $110 million.

Juliet Shore, Professor at Boston University

Juliet Schor, a Boston University professor who authored the report on this four-day workweek experiment, said in a recent interview with Boston University Magazine, "The biggest reason productivity can be maintained is that the work reorganization focuses on reducing activities that have no value (in terms of reducing working hours)." She added, "The core target of work reorganization is meetings." Since meetings have been too long and inefficient, work reorganization involves using Slack or messaging applications to communicate efficiently.

3) "Six Months of Preparation"... Planning Is Crucial

Companies participating in the experiment emphasize that the preparation and planning phase before implementation is important. According to the mid-term evaluation of the UK’s four-day workweek experiment released by Four Day Week Global last September, one in five companies dropped out midway. Most stopped during the planning phase due to difficulties encountered while reviewing ways to reorganize work.

Jo O’Connor, CEO of Four Day Week Global, stresses that "the planning phase determines success or failure" and that employee participation is crucial. He said, "Even the most meticulous CEO in the world cannot know all the complex issues every employee faces daily."

Simon Ursell, managing director of Tyler Grange, a UK environmental consulting firm participating in the experiment, recently told BBC that "months of preparation before the pilot started were key." In the case of Hutch, a game development company headquartered in London, during the planning process, management received over 140 anonymous questions and answered them publicly, as well as held Q&A sessions with each team. Foreign media reported that Hutch’s management jokes that it took six months just to adopt the four-day workweek.

"It’s an experiment that allows people to learn a lot." Adam Grant, a professor at the Wharton School of the University of Pennsylvania, said this on the 6th at an event hosted by the Wall Street Journal (WSJ), proposing the four-day workweek experiment to executives. It is important to objectively review the experiment results and explore realistic ways to implement them. Given the rapidly changing trends after COVID-19, we hope this four-day workweek experiment will help find answers for the future of work.