The post-pandemic era has brought about a significant shift in the way businesses operate, with many companies exploring flexible work arrangements. One such arrangement that has gained traction is the 4-day working week.
But can CFOs realistically adopt this model without compromising financial efficiency and productivity?
Reduced overhead costs
One of the most apparent financial benefits of adopting a 4-day work week is the potential for reduced overhead costs. By having employees work fewer days in the office, employers can save money on utilities, office expenses, and maintenance costs. According to a study by The Workforce Institute, companies that reduce their work week from five to four days may be able to cut energy consumption by up to 20%. Additionally, companies can potentially reduce their office space requirements, resulting in lower rent, property taxes, and other related expenses.
Beyond the cost savings, a shorter work week can also contribute to a company’s sustainability efforts and reduce its carbon footprint. This environmentally conscious approach can be a selling point for customers and investors who prioritize sustainability, further enhancing a company’s reputation and market position.
Increased employee retention and satisfaction
Another significant financial benefit of implementing a 4-day work week is the potential for increased employee retention and satisfaction. When employees have more time to spend with their families or pursue personal interests, they are likely to experience higher levels of happiness and fulfilment in their personal lives. This, in turn, can translate into better job satisfaction and a lower likelihood of turnover.
Research conducted by Perkbox found that 67% of employees would consider leaving their job if it didn’t offer flexible working arrangements, such as a shorter work week. Additionally, the Society for Human Resource Management (SHRM) discovered that companies with flexible work arrangements had lower turnover rates compared to those without.
Reduced turnover can lead to significant financial benefits for companies. It helps to reduce the costs associated with recruiting and training new employees. Furthermore, retaining experienced employees allows companies to benefit from their institutional knowledge and expertise, which are invaluable assets for achieving business goals.
Contrary to common assumptions, a 4-day work week can actually lead to increased employee productivity. When employees have more time to rest and pursue personal interests, they are likely to be more engaged and focused when they are at work. This heightened level of engagement can result in improved productivity and overall performance.
A study conducted by the Icelandic government demonstrated that when employees at two public offices transitioned to a shorter work week, their productivity either remained the same or increased. Additionally, a survey by the Workforce Institute revealed that employees who had a 4-day work week reported feeling more “energized” and “refreshed” when they returned to work.
Improved productivity can generate financial benefits for companies in various ways. By increasing output without increasing labour costs, companies can enhance their profitability. Additionally, improved productivity enables companies to better meet customer demands and expectations, leading to improved customer satisfaction and retention.
Potential drawbacks and how to address them
While there are numerous financial benefits associated with a 4-day work week, there are also potential drawbacks that need to be considered.
For example, scheduling meetings and managing workflow might become more challenging with fewer work days. Additionally, some employees may struggle to adjust to a new schedule or feel overwhelmed with their workload within a shorter time frame.
As Christopher Johnke and Tyler Hales from Cushman & Wakefield point out, “Companies that can get their employees to work together on an in-person basis will outcompete their competitors.”
However, these concerns can be effectively addressed with careful planning and communication. Utilising technology, such as scheduling software and project management tools, can help streamline workflow management and ensure that deadlines are consistently met. Collaborating with employees to find a schedule that works for everyone and providing the necessary training and support can also facilitate a successful transition.
Another challenge to consider is the potential impact on employee benefits and compensation. With fewer hours worked, employees may be entitled to reduced benefits or compensation. Employers should carefully evaluate such factors and clearly communicate any changes to their employees to maintain transparency and trust.
A report by Owl Labs reveals that 68% of managers believe their remote and hybrid team members are missing out on impromptu or informal feedback opportunities. This could be a significant hurdle for CFOs considering a 4-day week, as regular feedback and communication are crucial in the finance department.
A balancing act?
Implementing a 4-day work week can offer several financial advantages for employers. From reduced overhead costs to increased employee retention and improved productivity, there are compelling reasons to consider making the switch.
While there may be challenges to overcome, with careful planning and effective communication, employers can successfully navigate the transition and reap the benefits of a happier and more productive workforce.
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