The 4 Day work Week trial in the UK got me digging into additional workforce data to understand the underlying reasons driving the pilot.
Bottom line: Organizations that aim to be relevant for Knowledge workers can get left behind if they do not consider FLEXIBILITY (Time, Location, Type of contracts) as important “Benefit” that is being increasingly sought after.
Key takeaways from my analysis below-
What is the 4 day work week pilot?
The 4 Day Week Global is a not-for-profit community that has recently concluded a pilot with 70 firms/ 903 employees in the UK, wherein employees worked for 32 hours instead of 40 hours, with no reduction in pay, and an expectation of maintaining the same productivity/ output. i.e.- reducing time spent by cutting out meetings and working with smart tools and processes.
The pilot was based on a limited sample of 70 firms, however has been in the news for encouraging results and positive feedback from companies and employees. More than 90% of participating businesses have opted to continue with the four day week, with 18 adopting it permanently. The pilot was also featured in an article by leading Industry Analyst in the People space Josh Bersin.
Additional time and data will provide information for a broader set of companies to determine their appetite for a 4 day week. The pilot has resulted in the 4 day workweek coming into mainstream conversation.
The 4 Day work week pilot coincides with Post Pandemic era conversations on continued Flexibility- Remote work, Hybrid work and Gig Work. What is driving all the conversation and energy around these work models?
Data Insights from Analysis of U.S Workforce data
Mentioned below is a high-level summary of the key data points I wanted to highlight based on this analysis. Over the past century, the American economy and workforce has undergone massive changes, from the rise of automation to the growth of the service sector. While this data is based on U.S Workforce data from the 1940s to 2022, it will be relevant for countries that have a significant portion of the workforce as Knowledge workers. The most significant changes noted in context of this analysis are summarized below,depicted in Chart 1 and Table 1:
Workweek constant since 1938: The standard workweek was 70 hours in the 19th Century and decreased to 40 hours. The shift to a 40 hour workweek was popularized by Henry Ford for Ford Motors, and was followed by others, eventually-codified into U.S. Law as part of the Fair Labor Standards Act of 1938. The contractual full-time work week has been constant since.
5X increase in Productivity: From the late 1940s to 2018, the average Economic Output (In simple terms- Productivity) per person hour worked increased by a factor of 5X. This means that a worker in 2018 could produce in one hour what it would have taken 5 hours to produce in 1940. Increased productivity is on account of Technology, Education,Processes, Management Styles etc- the subject of papers written by several economists and not the objective of this article.
2X increase Workforce size and total hours of work: The workforce in the U.S. has doubled from 62 million in 1950 to 164 million in 2022.
Increase in Gig workers: In 1975, gig workers made up only 6.3 percent of the workforce. Current reports suggest that 36 percent of the U.S workforce has freelance/ gig work either exclusively or in addition to their regular jobs. According to a survey conducted in2022 , 25.7 percent of independent workers polled in the United States stated that they participated in gig work out of necessity to support the basic needs of their families. However, a whopping 24.9 percent said their main reason for gig work was for autonomy and flexibility.
Labor force participation by gender: In 1950, the U.S. workforce participation rate was 59 percent, with men accounting for a majority of the workforce (70 percent). Currently the workforce participation rate is 62 percent, with men accounting for 53 percent of the workforce.
Chart 1: Visual depicting increase in workforce, increase in productivity and “contractual” Full Time work hours since 1940s.
There are several insights on the U.S. Workforce data when juxtaposed against historical timelines related to the Great Depression of the 1930, the Wars of the 20th Century, the Great Recession 2007-09 etc. However, the data points have been restricted for simplicity and relevance to the purpose of this article..
So what are the Takeaways from this analysis?
The gist of the data: Between 1940s and 2022, the workforce numbers (2X increase) and the productivity per person (5X increase) have increased in the U.S, and likely other countries due to the benefits of technology and updated management principles. Despite the relative and absolute gains in productivity and output, the “contractual” full time workweek remains constant at 40 hours in a majority of cases for the Non Agricultural Business sectors since 1938. It is common for knowledge workers who do notwork on shifts, to have uncapped work hours exceeding 40 hours a week.
The positive story: Gains of increased workforce/ work hours and productivity have resulted in growth/ efficiency benefits for companies, higher revenue for governments and value for shareholders/investors.
The Flip side: With 40+ hours of work a week (often uncapped in practice for knowledge workers) and increased workforce participation across Genders, employees are faced with increased time pressures for dealing with increasing complexities of life – Life admin, traffic, chores and care giving responsibilities etc. vis a vis mid 20th century. Knowledge workers want a bigger share of benefits from Productivity gains generated, with a choice of Flexibility in work time and location becoming more important than traditional benefits. The discussions about Burnout, focus on Employee Wellness and more recently The Great Resignation, Quiet Quitting, the FIRE movement etc have surfaced some of these workforce concerns.
The extent of wider adoption of a 4 day workweek will be clearer over time. The broader themereflecting workforce preferences for alternative and Flexible work models including, Hybrid/Remote work arrangements, Gig work, are mainstream and are here to stay.
Some countries are even amending employment laws to respond to the pulse of the workforce. The Flexible Work Act in the Netherlands amended in 2022 provides rights to employee, who has been employed for at least 26 weeks, to request for an adjustment of the working hours, working place or working time.
We also need to recognize that for some jobs and industries (example- Logistics, emergency services, public transportation, health care) it will be a greater challenge to incorporate flexible work design.
I have been very accustomed to working 6- and 5-day workweeks. However, studying this topic makes it clear that organizations need to keep a sharp pulse on such feedback from the workforce, and adapt workforce design to stay relevant for their target talent.
Before you leave
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Table 1- Additional data summarized from the data sources for this analysis
US Bureau of Labor Statistics (BLS)