Table of Contents
- 1 Shortened vs compressed: The four-day work week explained
- 2 “It is time”: Senate Committee report says Australia should trial four-day week
- 3 Are there downsides to a shorter working week?
- 4 Top 3 employee benefits of the four-day work week
- 5 Is the future of work a four-day week?
- 6 Have you been unfairly dismissed?
The four-day work week movement is gaining steam. More and more Australian companies are signing onto the idea, convinced that it will improve the working lives of employees. And as a result, also boost their productivity.
But while the benefits of the four-day work week have been loudly proclaimed by many, are there downsides? Some say shortening the working week simply means employees end up working the same number of hours, but with longer, more stressful days.
Whether it really is as good as it sounds or not, the idea of a shortened week seems to be one that is catching on. A 2023 poll of almost 42,000 Australian workers revealed that 40 per cent believe a four-day work week will become the norm in five years.
In this article, we explore some of these four-day work week trials run be Australian companies and the effects they have had on employees. We also explore the main benefits and disadvantages of a shortened work week.
Shortened vs compressed: The four-day work week explained
There are two main models that most company’s use to adopt a four-day work week. The first is the shortened work week, which is also known as the 100:80:100 model. The model stipulates that workers earn 100 per cent of their pay in 80 per cent of the time, while also delivering 100 per cent productivity.
Essentially, the shortened work week means that employees who typically work a 40-hour week only work 32 hours but maintain their 40-hour per week pay level. The second model is the compressed work week. This involves employees working their usual 40 hours per week, but across four days. This means that they work 10-hour days.
Medibank trials four-day work week
While the idea of a shorter work week is a fairly recent phenomena, it has been trialled by scores of companies in Australia and worldwide. So there’s plenty of data available on whether it delivers on its touted promises.
The latest big-name Australian company to trial a shortened work week is insurance giant Medibank. The trial began at the end of October 2023 and will involve 250 workers for a period of six months. Employees will manage their week according to the 100:80:100 model. Full-time and part-time staff will take part, with the latter having their time prorated.
Workers react with “absolute excitement”
Medibank is doing everything to ensure the trial is properly run and maximise its potential benefits. It has partnered with 4 Day Week Global – a not-for-profit that consults companies on best practice. While Sydney’s Macquarie University will track all the key data that comes from the trial. When the trial ends, Medibank will crunch the data to see if it is worthwhile scaling the shorter work week out to the rest of the company.
Medibank’s head of HR said that the trial invoked “absolute excitement” from employees. Among its many potential benefits, she foresees that the trial will help employees “reduce unproductive time” and “improve the value of their outputs.” She also predicts workers will be “happier and healthier” and that “absenteeism and employee retention will improve.”
Bunnings joins the shortened week movement
Another prominent Australian company to trial a four-day work week is Bunnings, becoming the first local retailer to do so. However, the trial was not really the company’s idea. Rather, it was union action that compelled Bunnings to adopt it. In May 2023, the company reached a landmark agreement with unions Shop Distributive and the Allied Employees Association which introduced a four-day work week trial for all its full-time employees.
Thousands of staff were given the option to work 38 hours over four days or a nine-day fortnight. Like many other companies, Bunnings will follow the 100:80:100 model for those employees who choose a shortened week. The deal will also see Bunnings’ full-time workers receive a 10.5 per cent pay rise over the next three years. It will also increase their annual leave entitlement to five weeks per year.
Smaller businesses are running trials too
The four-day work week is not only being trialled by Australia’s largest companies. One smaller business to also adopt a shortened week is Sydney marketing outfit House of Brands. Its 18 staff members work 32 hours per week from Monday to Thursday, maintaining their 40-hour week pay. Embracing the 100:80:100 model has seen staff maintain their level of productivity, the company said.
The move has been a hit with staff. One employee said that it makes “every weekend feel like a mini holiday.” While its CEO warned other businesses that if they do not adopt a shortened week, they “will be left behind.”
“Clearer heads and more fulfilled hearts”
Another smaller company to offer a shortened week is Melbourne marketing specialist The Walk Agency. In August 2022, the company trialled the 100:80:100 model for select staff over a six-month period. In May 2023, The Walk Agency’s co-founder Nick Cantor told the Australian Financial Review that its staff “loved” the trial. He explained that it allowed staff to “produce high-value work more quickly” as they had “clearer heads and more fulfilled hearts.”
“It is time”: Senate Committee report says Australia should trial four-day week
So far, only a small minority of Australian employers have trialled a shortened week. But there have been calls for it be more widely adopted. In March 2023, the federal Committee on Work and Care advocated for a federal-government-backed trial based on the 100:80:100 model. The Committee believes that a review of standard working hours is overdue.
“It is time for a review of standard hours, the frequency with which they are over-run without recompense, and for more widespread experimentation with shorter working weeks,” said Committee chair and Greens senator Barbara Pocock.
Are there downsides to a shorter working week?
Before we discuss the major benefits of a four-day work week, it is important to consider the potential downsides. From an employee’s perspective, there are not that many when you truly think about it. But here are three:
1. Extended daily hours
One of if not the biggest downsides is related to the compressed model. This of course requires workers to condense a 40-hour week into just four days, leading to longer daily shifts. There is a very real risk for burnout with the compressed model, even if workers get a three-day weekend.
But burnout could become a problem with the 10:80:100 model too. While employers and workers may agree to working less hours per week, in reality, they may be required to work more just to keep up with their work. This would then lead to working longer days, just like with the compressed model.
2. Less annual leave
This depends on how your employer calculates your annual leave. But if you are working less days per year, you are going to be entitled to less annual leave. Of course, the four-day work week entitles you to up to 52 days off per year. But these days can’t be used concurrently, so you may have to wait to save up annual leave for that overseas holiday.
3. Lower salaries
There is the potential danger that some employers could use a shortened week as justification for offering employees less pay. Or to not give them pay rises. They may rationalise that the benefit of working only four days per week is enough of a perk to get away with paying employees less.
4. Work complications
The condensed workweek can introduce communication challenges, particularly when employees have different days off. Coordinating meetings and ensuring smooth communication may become more complex, potentially impacting teamwork and overall project timelines.
Industries heavily reliant on consistent and prompt customer service may face challenges with a four-day work week. Longer weekends may result in delayed response times, potentially affecting customer satisfaction and business relationships. In essence, these problems could make day-to-day work for employees more difficult.
Top 3 employee benefits of the four-day work week
The benefits of a shortened week seem obvious. It is safe to assume that working less hours per week will lead to less stress and happier workers. But is this borne out by the data from company trials? Here, we look at the main advantages of a four-day work week as revealed by past trials.
1. Improved work-life balance
The dream of many workers has always been to have a three-day weekend. And the four-day work week makes that a reality. With an additional day off each week, employees can allocate more time to personal pursuits, family and relaxation.
A 2022 trial run by 4 Day Week Global involving 20 Australian companies saw 65 per cent of workers report feeling more satisfied with their time. While forty-nine per cent reported that conflict between their work and family commitments had reduced. A significant number of workers also exercised more often and men took more of a share in housework and child rearing.
2. Feeling less stressed and happier
If you are working less hours per week, with a three-day weekend, you are of course going to feel less burned out. In the Australian 4 Day Week Global trial, 64 per cent of workers experienced a decrease in burnout, while 38 per cent reported feeling less stressed.
In addition, nearly half of workers said that they experienced less negative emotions. While 62 per cent reported a rise in positive emotions. With less burnout and happier work lives, the companies in the trial reported a 44.3 per cent decrease in workers taking sick or personal leave. They also reported an 8.6 per cent decrease in average resignation rates.
In another trial conducted by global fast-moving consumer goods giant Unilever in Australia and New Zealand, workers reported a 33 per cent reduction in stress. They also reported a 15 per cent increase in feelings of strength and vigour.
3. Increased productivity
Proponents of the four-day work week argue that the compressed schedule can lead to heightened productivity. The anticipation of a longer weekend might serve as a motivational factor, prompting employees to accomplish their tasks more efficiently. Additionally, fewer workdays could encourage a more focused and results-driven approach to daily tasks.
In the Australian 4 Day Week trial, 54 per cent of workers said that their productivity increased. Another trial run by the Japanese division of Microsoft, which involved 2,300 workers, saw productivity increase by 40 per cent.
A trial of 2,500 workers run by Henley Business School in the UK saw companies report a 64 per cent increase in productivity. While 63 per cent said the quality of the work employees produced increased.
Is the future of work a four-day week?
It seems that a growing number of companies are choosing to adopt or at least trial a shortened week. While it may present potential problems for employees, overall the four-day work week seems to be a net positive. Data from past trials suggests that it really does alleviate stress and make workers happier and more productive.
Whether a shortened week will become the norm anytime soon, however, is another story. It seems that Australian companies are taking a tentative approach to its adoption. But if we see politicians begin to advocate for the idea, we could see new legislation that incentivises employers to provide the option of a shortened week. This is a very real possibility given the recent focus on flexible work and recent legislation bolstering the rights of workers in this regard.
Have you been unfairly dismissed?
Contact A Whole New Approach today. For over 30 years, we’ve assisted more than 16,000 Australian workers in every state and territory to take action via the Fair Work Commission. Our services go beyond unfair dismissals, encompassing general protections, forced resignations, redundancy, workplace harassment and more.
We are committed to helping you secure the maximum compensation possible and have earned a reputation for achieving exceptional payouts. Operating nationwide, our services are accessible to every Australian employee, regardless of location, 7 days per week.
With a 21-day window for filing your claim, get in touch today on 1300 766 700.