4-day work week pays dividends for New Zealand firm

Reduced hours for same pay led to better work-life balance and raised productivity

WELLINGTON • A New Zealand firm that let its employees work four days a week while being paid for five says the experiment was so successful that it hopes to make the change permanent.

The firm, Perpetual Guardian, which manages trusts, wills and estates, found the change boosted productivity among its 240 employees, who said they spent more time with their families, exercising, cooking and gardening.

The firm ran the experiment - which reduced the working week to 32 hours from 40 - in March and April, and asked two researchers to study the effects on staff.

Human resources professor Jarrod Haar of the Auckland University of Technology said employees reported a 24 per cent improvement in work-life balance, and came back to work energised after their days off.

"Supervisors said staff were more creative, their attendance was better, they were on time and they didn't leave early or take long breaks," Professor Haar said.

"Their actual job performance didn't change when doing it over four days instead of five."


Supervisors said staff were more creative, their attendance was better, they were on time and they didn't leave early or take long breaks. Their actual job performance didn't change when doing it over four days instead of five.

HUMAN RESOURCES PROFESSOR JARROD HAAR, on Perpetual Guardian's trial and the effects on productivity.

Similar experiments in other countries have tested the concept of reducing work hours as a way of improving individual productivity.

In Sweden, a trial in the city of Gothenburg mandated a six-hour day, and officials found employees completed the same amount of work or even more.

However, when France mandated a 35-hour working week in 2000, businesses complained of reduced competitiveness and increased hiring costs.

Perpetual Guardian staff said the change motivated them to find ways of increasing their productivity while in the office.

Meetings were reduced from two hours to 30 minutes, and employees created signals for their colleagues that they needed time to work without distraction.

"They worked out where they were wasting time and worked smarter, not harder," Prof Haar said.

Mr Andrew Barnes, the company's founder, said he believed his was the first business in the world to pay staff for 40 hours when working 32.

Other firms have allowed employees to work shorter weeks by compressing the standard 40 hours into fewer days, or allowed people to work part-time for a reduced salary.

Mr Barnes said he came up with the idea for a four-day work week after reading a report that suggested people spent less than three hours of their work day productively employed, and another that said distractions at work could have effects on staff akin to losing a night's sleep or smoking marijuana.

He said the results of the trial showed that when hiring staff, supervisors should negotiate tasks to be performed, rather than basing contracts on hours that new employees spent in the office.

"A contract should be about an agreed level of productivity," he added. "If you deliver that in less time, why should I cut your pay?"

Working mothers stood to benefit most from the policy, since those returning to work from maternity leave often negotiated part-time hours, but performed the equivalent of full-time work.

Ms Tammy Barker, a senior client manager with the firm, agreed. The mother-of-two who lives in Auckland spent her day off each week running personal errands, attending appointments and shopping for groceries, which allowed her to spend more time with her family on weekends.

She realised during the trial how often she jumped between tasks at work as her concentration waned.

"Because there was a focus on our productivity, I made a point of doing one thing at a time, and turning myself back to it when I felt I was drifting off," she said.

"At the end of each day, I felt I had got a lot more done."

Noting a drop in the firm's electricity bills with 20 per cent less staff in the office each day, Mr Barnes said the change could have wider implications.

"You've got 20 per cent of cars off the road in rush hour. There are implications for urban design, such as smaller offices," he said.


A version of this article appeared in the print edition of The Straits Times on July 21, 2018, with the headline '4-day work week pays dividends for NZ firm'. Subscribe