The 4-Day Work Week

Episode #233 transcript

MORE EMPLOYEE FLEXIBILITY REQUIRED?

Workforce layoffs have continued in the US, as large companies trim the fat in advance of the recession that looks likely to head our way. But the latest data on economic growth and jobs are more positive than most commentators expected.

Europe is leading the way with some better-than-expected growth figures, and the US added almost 600,000 jobs to the economy in January, which will keep an already tight labor market highly strung. So with US unemployment at a 50-plus year low, it could be a seller's market for some time to come.

Meanwhile, we continue to field questions every day from our leadership community seeking guidance in how to navigate their own challenges, with a backdrop of highly complex and fast moving shifts in the workforce dynamics. In today's LinkedIn Newsletter, I’ll examine some of the phenomena that you're likely to be wrestling with at the moment, starting with the new push to establish the 4-day workweek as a standard in many companies.

I’m also going to parlay this into a look at the difficult topic of shift workers, which complements the topic of managing workers who aren;t there all the time, and need to be trained, developed, and managed effectively. How do you get them engaged in training and development when they're, quite rightly, focused on critical frontline or customer facing activities? 

WILL THE 4-DAY WORKWEEK WORK?

Attracting and retaining top talent when you're not one of the big corporate tech companies who can offer free lunches, unlimited leave and sleep pod rooms is proving to be pretty difficult. So now, the concept of the 4-day workweek is seeing a big resurgence. When it comes to workplace perks, this is getting a fair bit of momentum.

Let's just start with a little bit of background. The most recent push for a 4-day workweek seems to have gained momentum in the last 12 to 18 months. I was really surprised at how many countries are trialing various forms of this. Iceland, of course, as you'd expect, but also Japan, which surprised me. England, Scotland, Spain, even South Africa, which was a huge surprise.

Some of these trials are quite limited, but there’s an organization that's actually pushing this seriously. They're getting behind the 4-day workweek as a global phenomenon they want to see come true. So if you want to check them out, the website is 4dayweek.com.

I checked out the people behind it, expecting it to be a union think tank, but it's not. Andrew Barnes, a very credible character, had a great career in banking and finance with Macquarie Bank and Tower in Australia. Also, funnily enough, he’s a Harvard Business School alumnus.

We used to have a six-day working week, then we moved to a five-day working week. You have to ask the question, “Is this just the natural progression and if so, where does it all end?”

The definition of a 4-day workweek seems to vary a lot. Some organizations are simply going to 32 hours, so four x eight-hour days. Others are preserving the time commitment, but compressing that into the four days. Every organization is different.

And I think it's worth mentioning the types of organizations that are getting involved in the trials. Apart from a few outliers, it seems to be small to medium businesses, not for profits, and government agencies, which isn't actually that surprising. I certainly don't think it's picked up in the commercial world yet. It may get a foothold in companies other than the tech companies, but that remains to be seen.

A couple of weeks ago, I released a podcast episode, Ep.230: Too Many Cooks. In it, I spoke about the concept of job sharing. Of course, when it came to job sharing, government organizations embraced it and took it up with vigor. It was a great thing for them in terms of gender equity, and ability to give their people more work flexibility.

But interestingly, the private sector didn't pick it up, and I think that's the sure sign of whether or not something is effective commercially. You can do all the studies you like, and get everyone to say it’s a great thing and that they’re not losing productivity. But the true test is in adoption rates of commercial businesses. It'll be interesting to see if the private sector adopts the 4-day workweek and, if it doesn't, I guess that tells us something.

THE PROS (BEING A POSITIVE GUY!)...

There are many positives that could be harvested from moving to a 4-day workweek. The big question though, is whether or not that’s possible in practical terms. 

So let’s work out who might be affected by this. For more senior people, it doesn't make a hell of a lot of difference. When you're in a very senior leadership role, you're always ‘on’. And even though you might not physically be in the office, you’re always tuned into work. For example, even though when I was a senior executive and  CEO, I only worked probably an average of 55 hours per week, I was constantly available and mentally ready to jump into action if anything happened. That won’t change for more senior roles.

But one of the potential benefits for the broader workforce is that, with less time to devote to work, leaders will have to be smarter about how to get the same outcomes. There’s a potential benefit in leaders moving to a style where they manage more on outputs than inputs? Amnd if they can manage to do that, it’s an entirely positive thing. 

If we say, “Look,  we're working less hours, so we need to be more focused and concentrated more on doing the right things to create the same amount of value”, then that would be a hugely positive step in how leaders lead.

The move to a 4-day workweek could also potentially push people harder to think about how they manage their time. 

There may also be benefits in terms of attraction and retention of employees. Theoretically, you’ll be attracting more employees because you offer a 4-day workweek. But, the critical question is: “Are you attracting the right employees, or are you attracting employees who simply love their work-life balance, and really aren't that focused on the achievement of high quality outcomes and value creation?” 

You may end up with happier employees, but we know that the “happy workers are productive workers” mantra is bullsh!t!

So, in order to declare victory on the 4-day workweek, you’d have to be convinced that you would be able to minimize the loss of productivity and, in return, get a whole lot of employee loyalty and retention? And then, of course, believe that they are the right employees!

Do the scales balance out at the end of the day?

I think it’s more likely to play out positively in a smaller business, where it’s easier to observe and tap into the motivations of each individual. But in larger organizations that need to adopt blanket policies, there’s a lot more opportunity to game the system and you won’t necessarily get the outcomes you’re looking for. It; more likely that leaders will simply capitulate because it’s all too hard, and you’ll just see a productivity decline of up to 20%.

AND THE MANY PROS (BEING A REALIST!)...

I had to think long and hard about whether I'm just being old-fashioned and grumpy. 

But my genuine observation is that most leaders aren’t strong enough to do the things they’d need to in order to bridge the productivity gap. They'll still manage predominantly by inputs, not outputs. Will they genuinely change the way they lead just because we move to a 4-day workweek? Or will they once again lower expectations in terms of what's going to be produced? I think the latter is much more likely that the latter is going to happen.

We're already seeing impacts from hybrid work: impacts on innovation, on culture, on collaboration. So the 4-day workweek is just going to accelerate this decline, I suspect. And if your people take an extra day off, what are you going to lose: an in-office day or an at-home day? Because one or the other is going to happen. It’s likely that you’ll end up having people in the office even less than you do now. This isn’t good for culture, productivity, or team performance. 

As we saw with job sharing, it’s likely that the public sector will champion this. And although I hesitate to say this, organizations that don’t have to compete in commercial markets are generally less productive than companies that do. It’s just the nature of the beast. So Government agencies may be able to implement the 4-day workweek and declare victory, due to the fact that productivity and value aren’t necessarily the focal point, and there’s no penalty for underperformance.

Then, we need to consider the practicalities of maintaining top class customer service. Your people will be spread more thinly, and some roles can't be divided without adding more staff: that’s additional direct costs in your expense line.

Then, of course, cultural barriers will emerge inside the organization when the people who can't work a 4-day week (because they're in a customer facing role), begin to feel resentful towards those who can.

You've got to cover peak periods. You've got to cover overflow capacity. And for competitive businesses, there's a prisoner's dilemma in this: will you be the first one in your market to move to a 4-day workweek, with the specter of being out-competed by those companies that can be more productive by having all their staff working a five-day week? 

This requires some careful consideration before companies decide to shift their policy on how often
(and for how long) each employee needs to be at work on any given week.

WILL TECHNOLOGY PLAY A ROLE?

We hear every week the many predictions about human jobs being automated and usurped by machines. Many more jobs are going to be undertaken by robots and AI, which has always been the way. As we've relied less on human effort, technology has emerged to fill the gap that’s been left. 

It started with the invention of the printing press in the 15th century and, since then, productivity improvement through the use of automation, as opposed to human labor, has always been a factor. But labor is normally one of the biggest costs of any business, so it's all relative at the end of the day.

So, whereas technology is likely to fill part of the productivity gap over time, I don’t think that it will be driven by workforce changes like the 4-day workweek. Like all innovation, it will be driven by the application of new technology to solve existing problems. There may just be a happy serendipity here. 

HOW ABOUT SHIFT WORK?

Shift work can be pretty tricky, particularly when you’re working in a 24/7 industry, as many companies do. I had my fill of this in CS Energy and several other companies, where we had a portion of our workforce who worked in shifts: and for these people, it was actually a financial windfall.

The shift workers had lucrative union-driven employment agreements. In some cases, it was five days on,  days off. Every week brought an extended holiday. The average working week was probably about 34 hours for these shift workers, and they were paid huge penalty rates and allowances so they could make big money, with minimal effort. 

As an interesting aside, though, most of these shift workers didn’t seem to be particularly happy. Happiness and motivation are driven by other factors, as we know. And the extraordinary working conditions of these shift workers seemed to drive an entitlement culture over time.

But these were legacy arrangements–I suspect the exception these days, rather than the rule.

Industries like tourism, hospitality and entertainment are very different from that experience, because they're customer facing. Building in time for anything other than frontline work for your shift workers is tricky. Do you build in slack time for training and performance management at the start of shift or the end of shift? How much do you value the training that's being given to people? How do you balance compliance versus skills development? 

There's a bunch of stuff that your shift workers need to know: for example, regulations and laws that they have to be trained in. So what is it reasonable to ask people to do in their own time?

When we designed our flagship leadership performance program, Leadership Beyond the Theory, we did it in a way that enabled highly flexible consumption of the content. Being delivered through an online platform, people get the opportunity to consume that information the best way they can: whether they do it first thing in the morning each day for half an hour, or whether they binge three or four hours on a weekend.

It really depends on the person’s individual learning style, their lifestyle, and their own personal commitments as to how they fit it in. And then we come together around a group mentoring session or a webinar to put everything into context. This hybrid way of learning is a really effective way to consume knowledge, and it gives a lot of flexibility. But a lot of people aren't motivated to do that in their own time.

Multimodal learning helps: being able to listen, read, and watch gives people many more opportunities to actually get through the learning in the way that suits them. So obviously, that's something to think about.

So, why is it so hard to schedule training for shift workers? Theoretically, it should be easy. But in practical terms, it can be quite difficult. For example, total shift length can be an issue when you think about managing fatigue: the crew can be exhausted after a shift, and they’re not necessarily capable of absorbing the type of information you need them to.

There are also other things you have to fit in apart from training. Group meetings, and shift handovers where you communicate important messages. There are one-on-one meetings and performance discussions which should be taking place. I find that with people doing frontline work, you can probably add as much as 30% of non-productive time to any employee based on the additional things they have to do that's not part of their main job description.

And then, does the business model support this? If your shift workers become less productive by allocating productive time to things other than delivering frontline services, how does that compare cost-wise with what your competitors are doing? In most industries, they're already established with a well-understood business model and cost profile.

This is the prisoner's dilemma that we look at in 4-day workweek as well. What do you do when your competitors aren't doing it?

DISRUPTING A BUSINESS MODEL

Years ago, a close colleague of mine who was a McKinsey consultant at the time, had an engagement with an airline, which was struggling to meet its financial projections for in-terminal concessions revenue. That’s the venues in the airport that sell food and drink on the ground.

What he found was that they were feeding people too well in the air, so they weren't eating and drinking when they were on the ground.

His team recommended that the airline scale back its in-flight service, to move to lunch boxes instead of full service meals. The airline initially rejected this, believing that if they scaled back the quality of their service, then no one would fly with them.

Eventually, my mate convinced the airline to do it. So they moved to lunch boxes and within only two months, all the other airlines followed. It just goes to show that there is a way to break an industry paradigm, even though it's really tough. You've got to be very confident and very bold to make that sort of competitive move.

TRANSIENT AND UNSKILLED LABOR

In many industries, there’s also the specter of high turnover, transient labor, and high proportions of unskilled labor. What concessions should you make for these challenges?

For example, in some of the industrial businesses I worked in, literacy rates in the workforce were low, and we were producing processes and procedures that were critical to be followed accurately. Yet a relatively high percentage of the frontline workers didn't have high literacy skills to understand and comprehend the complex processes that they were supposed to follow.

This is why you have to ensure that everything you ask of them is fit for purpose. You have to ensure that it’s geared towards the audience that has to consume it and make it effective. If you have issues like high staff turnover, then it's much more important that you can induct those people well.

Induction and probation are critical because if people can't actually ‘get it’ during induction, you don't want them hanging around in your business until they become poor performers. Those things require thought, and they’re highly dependent on your industry, your location and who you're competing against.

SO HOW DO YOU TRAIN SHIFT WORKERS?

Start by allocating some time upfront of a shift. If you can, get people to come in half an hour earlier to do whatever you need them to do before they commence their shift. If you can extend the shift time, fantastic, but there's a cost involved in that. 

And particularly, when you're running multiple shifts and switching over, you've got to make sure that it all hangs together in terms of the roster: it's not easy, but it’s worth trying to focus on training, communicating important messages, and the one-on-one meetings that drive performance and talent management.

RESOURCES AND RELATED TOPICS:

• Episode #230: Too Many Cooks - Listen Here

• Episode #8: Are Happy Workers Productive Workers? - Listen Here

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• Explore other podcast episodes - Here

• Take our FREE Level Up Leadership Masterclass - Start Now

• Check out our 8-week online leadership program, Leadership Beyond the Theory - Learn More

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