Sunday, June 4, 2023

Four-day working week: Iceland shows the long and the short of it


Iceland has some of the longest days. It now boasts some of the shortest working weeks, thanks to experiments in the public sector.

Toiling fewer hours for the same pay sounds like workplace nirvana, but the Icelandic experiment reveals bounty for bosses too. This takes the form of a healthier workforce and, crucially, productivity gains. Without those, most managers would give short shrift to short weeks.

Iceland’s trials, covering just 1.3 per cent of a modest working population, spanned four years. Subsequently, 86 per cent of the entire workforce started working shorter hours or gained the right to do so. according to, say NGO Alda and UK think-tank Autonomy.

Dot plot chart Average annual hours completed per worker (selected countries) 2000 - 2020 Bar chart Weighted average cost per employee by industry, £

In the private sector, consumer goods group Unilever and crowdfunding platform Kickstarter have been exploring four-day working weeks at sites in New Zealand and the US.

France watered down plans of its own. But Iceland offers encouragement to waverers.

Unlike Nordic neighbours, Icelanders toil long hours — more akin to those in Japan than Norway. But, like Britons, they are not terribly productive. OECD data show a strong correlation between working fewer hours and increasing output. Norway shines in this regard, leaving Iceland far behind. Civil servants chalked up output improvements during the Icelandic trials however. Accountants, for example, processed 6.5 per cent more invoices.

Common cavils against a four-day week include opposition from managers and the need to take on extra staff. While some departments were forced to recruit, the added bill was small compared with the overall payroll.

Autonomy reckons the picture would not be that different in the UK. It sees job creation as an added benefit, which investors might not.

Switching Iceland’s public sector staff on to a 32-hour week would create up to half a million new jobs, Autonomy estimates. That would add between £5.4bn and £9bn to the payroll, a 6 per cent increase at the top end.

Savings include productivity gains and a chunk of costs linked to burnout and other mental health issues. Deloitte estimates these set UK employers back £42bn to £45bn a year. They are disproportionately borne by the public sector.

In coming weeks, bosses in many developed economies face the tricky task of resetting employee expectations on workplace attendance. That gives them an opportunity to rethink the length of the working week as well.

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