Risk & Economy » Atom Bank CFO on shifting to a four-day work week

Atom Bank CFO on shifting to a four-day work week

David McCarthy, CFO at Atom Bank, spoke with Financial Director on his experience operating a four-day work week and its impact on productivity and efficiency

In an employee-led talent market, companies are facing fierce competition and struggling to stand out amongst the crowd, forcing them to offer greater flexibility to retain and acquire top talent. This provides senior finance leaders with a new challenge to add to their agenda.

Last November, Atom Bank announced its plan to pilot a four-day work week by initiating a 100:80:100 model – meaning employees work for 80 percent of their contracted time, but with no loss in pay, providing they maintain 100 percent productivity at work.

“It’s a competitive world out there,” says David McCarthy, CFO at Atom Bank. “People are going to find solution to work life balance […] and this is our version of that.”

The decision to introduce a four-day work week was made following discussions around how to make the digital-first company more distinctive and attractive to new and existing talent, says McCarthy.

“It’s also about looking after people, […] managing people’s stress levels and making sure that Atom Bank is something they enjoy working for, and it compliments their wider work life balance.”

The business case for a four-day work week

Atom Bank isn’t the first company to trial a shorter working week.

Last October, Spanish retailer Desigual announced it was moving its headquartered staff to a four-day work week after it had been voted in by employees. However, the company opted for an alternative model, with those working 34 hours instead of 39.5 receiving a 6.5 percent pay cut.

But reducing payroll to match the reduced hours “destroys the whole point” behind the idea of introducing a four-day working week, according to McCarthy.

“The business case behind this resource is that we’ll get benefits elsewhere,” he says. “We’ll be more attractive, which will make our recruitment more effective. We’ll get lower levels of sickness and absence more generally, we’ll get lower levels of stress and people will be more focused.”

Andrew Barnes, founder of Perpetual Guardian, says the company’s profitability improved by around 25 percent when it introduced the shorter working week.

The four-day work week encouraged multi-training in teams so the business could keep operating when someone wasn’t in the office, explains Barnes. This helped to boost the company’s resilience which allowed them to pivot quickly and adjust to the restrictions of the pandemic.

The four-day work week has also garnered political attention in Scotland, Iceland, New Zealand, and Spain. Last year, the Scottish government announced a £10m fund for businesses trialling a shorter working week.

Looking at the data

There is still a lack of data for companies to use as a foundation for assessing the merits of a four-day work week. As a result, McCarthy is paying close attention to the impacts on Atom Bank’s productivity and efficiency.

“We’ve come up with a number of KPIs which we’re tracking,” he says. “Things like sickness levels – short term sickness and long-term sickness, which have both improved substantially – levels of stress and how people are responding to the regular surveys we put out.”

While many businesses experienced high levels of absenteeism in the pandemic, Atom Bank found its sickness levels fell.

Atom Bank is also monitoring and measuring the impact of implementing a shorter working week on talent acquisition and employee engagement, customer service and productivity. Shortly after the bank announced it was shifting to a shorter working week, applications for job openings rose by 500 percent, says McCarthy.

“The evidence, albeit fairly early, on those metrics we set out to test has been very positive,” he adds.

Effective communication is key

Communicating any changes within a business is always important, but when introducing a shorter working week, effective communication is paramount.

“It’s a big change for people, and perhaps, some of the processes and rules weren’t as clearly defined,” says McCarthy.

Some of the teething problems the bank experienced included working out when people were in work, issues with rescheduling meetings, as well as establishing what it means for someone’s terms and conditions when it came to things like holiday entitlement.

The four-day work week works if there is trust between the employee and manager, says McCarthy.

“If managers say that we’ve got to work later, people do that.”

However, some areas of the business are naturally harder to move to a four-day working week such as finance and customer service.

“When you’re looking at something like finance, it’s not black and white,” says McCarthy. “Areas like finance tend to be hard working anyway, they’ve had to work late hours and at the weekend, that hasn’t changed.”

Those employees that need to work overtime to meet project deadlines are given time in lieu, he adds.

Shifting to a shorter working week has also influenced investment priorities and put a spotlight on automation and how it can support employees do more with less time in the office, says McCarthy.

The key to successfully operating four-day work week is there must be a will to succeed, he adds.

“If the attitude had been whoopee, I’ve got another day off and I get paid the same, it wouldn’t have worked,” he says.

“It’s got to be that we all want it to succeed and we’re not losing sight of what the business exists for, which is to deliver great customer service and to run a successful business for our shareholders as well – that has to be paramount.”

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