28 Nov, 2021

After flexibility and remote working, next is the four-day week

In the battle for talent today, work-life balance and paid leave are high on the list for potential employees when considering any rewards package on offer. This article by our CEO John Donoghue was originally published in the Sunday Business Post on November 28th 2021.

It feels like every day begins with a new jobs announcement. Employers are competing for talent like never before and driving unsustainable wage inflation in the economy.

Competition creates innovation, and the next battleground for talent may well be working time. Who will be the first large-scale employer to offer a four-day workweek in Ireland? We don't know, but one thing is for sure, employees will vote with their feet.

China's tech titans built on the 996 model of employees working from 9 am to 9 pm, six days per week, are being reformed in favour of a more reasonable work-life balance. Our five-day week looks good by comparison, but as the so-called ‘middle class’ has grown in Ireland, the value of personal time has risen. Have we got the balance right?

Every hour of rest before midnight is said to be worth two hours after the clock strikes 12. Maybe every hour away from the keyboard on a Friday afternoon is worth two hours of "Saturday time." If we valued our weekends before COVID-19, we cherish them now that we can do everything that makes life enjoyable again. But still, employers persist with the five-day workweek.

On September 25th, 1926, Henry Ford made a ground-breaking change by introducing a 40-hour workweek. The Ford employees would work five eight-hour days, with no change in wages.

Almost 100 years since Ford introduced the change, the five-day workweek remains the standard for most businesses. We all know some companies create a culture where a 40-hour workweek is considered "underperformance." Some companies even ask their employees to waive the Working Time Act in pursuit of maximum billable hours. A well-resourced business doesn't need to suspend employment law. Business owners living in fear of paying for hours spent "slacking off" are almost certainly paying for underperformance by insisting that a clock defines productivity.

Measuring performance can be a tricky task. Without the suitable parameters in place, a company can focus on the wrong things and allow perception to become a reality. Joe or Mary can be "hard workers" because of hours spent grinding at 50% capacity with little value to the client paying for their time.

At ifac, we are perhaps a few steps ahead

Ifac is Ireland’s eighth-largest professional services firm by turnover and the largest firm in the country by the number of clients, and not only do we have a ‘live and work’ in your local community approach across more than thirty locations – we have had people working a four-day week for many years. This is often driven by personal needs, everything from supporting a family business to looking after elderly parents or even childcare costs. We have clear key performance indicators (KPIs) and an incentive model that rewards individual and team performance. We measure productivity. What have we found? We’ve found that people are as productive on four extended days as they are on five eight-hour days. And they are often happier and more in control of their time.

We acted decisively this year and introduced a formal flexible working policy. The certainty provided by the policy has been a game-changer. The clarity in our approach is attractive for people who have found a new life during COVID-19 and now need the flexibility it created.

Ireland is a laggard on employee leave. With 29 leave days inclusive of public holidays, we are well behind some of our European counterparts. Austria leads the pack with 38 days leave, closely followed by Luxembourg with 37 days, and Denmark, France, Sweden, and Finland, all on 36 days leave.

There are now 17 four-day workweek projects at the trial stage across the country. Ireland is a leader in many ways and an attractive place to do business. The increase in Ireland's Corporation Tax rate to 15% will make us slightly less attractive for foreign direct investment. But as we know, FDI in the knowledge economy follows talent, and talent goes where the culture is a fit, and the rewards are good. Time is our most valuable asset, and it is now part of the consideration set when people look at a rewards package.

Change starts slowly and then happens all at once. Employers are working hard to win the race for talent. Flexibility and remote working have arrived, and the four-day workweek will be here soon. How soon? Within ten years? It's a definite maybe.