Increased revenue, fewer resignations: New data spotlights benefits of a 4-day workweek

The first large-scale study of a four-day workweek has come to a startling close: Not one of the 33 participating companies is returning to a standard five-day schedule.

Data released Tuesday show the organizations involved registered gains in revenue and employee productivity, as well as drops in absenteeism and turnover. Workers on a four-day schedule also were more inclined to work from the office than home.

"This is important because the two-day weekend is not working for people," said lead researcher Juliet Schor, an economist and sociologist at Boston College who partnered with counterparts at University College Dublin and Cambridge University. "In many countries, we have a workweek that was enshrined in 1938, and it doesn't mesh with contemporary life. For the well being of people who have jobs, it's critical that we address the structure of the work week."

Read more: 10 companies that have adopted the 4-day workweek

The study is the first from a series of pilots coordinated by the New Zealand-based nonprofit advocacy group 4 Day Week Global and involving dozens of companies in ongoing six-month pilots. A U.S. and Canadian trial began last month, and a pilot of mostly European and South African organizations begins in February. With each iteration, the researchers will adjust their data collection, including long-term tracking of how organizations fare with lighter schedules. 4 Day Week Global doesn't fund the research.

The initial data were collected from businesses and organizations in the U.S., Ireland and Australia, tracking 969 employees over a 10-month period as they reduced their workweeks by an average of six hours with no change in pay. They varied from a restaurant chain in the southwest U.S. to an Ohio-based custom RV builder to a climate nonprofit in Dublin.

Dozens of indicators, ranging from productivity to well-being and fatigue, all improved as the companies transitioned. The findings come at a time when businesses and their employees are struggling to recover from the pandemic, with ongoing high rates of burnout, stress and fatigue.

Organizational performance measures were strong. Revenue rose about 8% during the trial and was up 38% from a year earlier, indicating healthy growth through the transition. Though multi-company measures of productivity are difficult, the organizations rated the impact of four-day schedules as positive, averaging 7.7 on a 10-point scale. Employee absenteeism dropped from 0.6 days a month to 0.4, while resignations marginally dropped and new hires increased slightly. Companies rated the overall experience a 9 out of 10.

"We definitely saw much higher engagement levels among staff—higher than we've ever recorded," said Jon Leland, chief strategy officer at the crowd-funding company Kickstarter, which finished its pilot in September and permanently adopted a four-day schedule for its 100 or so employees. "We've also had much higher retention, as well as faster and easier hiring, which are probably the three most impactful factors on our overall productivity."

Read more: After adopting a 4-day workweek, this company saw productivity, sales and revenue soar

Leland said Kickstarter employees are more committed to staying long term with the new schedule, and that as an executive who needs to work more than four days, he personally has found it much easier to squeeze in some office-related tasks over the three-day break.

"The benefits are significant and outweigh the marginal efforts it takes to engage in this change," he said.

Not everyone believes a four-day workweek is desirable or feasible, and some question whether employers who offer four-day schedules or its cousin, unlimited paid time off, truly want their employees offline.

"If companies are really committed to this, they would demonstrate it by turning off network access on the days that they're not scheduled to work, and asking people to leave their laptops in the office," said David Lewis, chief executive officer of the HR consulting firm OperationsInc. "But I just don't see companies doing that."

One weakness of the study is that all of the participating organizations opted in, meaning leadership was already biased toward four-day weeks. But employees — who didn't necessarily opt in — were won over. Ninety-seven percent wanted to continue with four-day schedules, with workers reporting less work stress, burnout, anxiety and fatigue, along with fewer sleep problems.

"The well being results are just really stellar," said Joe O'Connor, director of the Work Time Reduction Center of Excellence and former CEO of 4 Day Week Global. "Overall, just extremely positive."

Exercise increased by 24 minutes a week, putting workers in line with World Health Organization recommended exercise targets. Employees also reported fewer conflicts between work and family, and less instances of coming home from work too tired to do necessary household tasks. Notably, the extra time off wasn't used for secondary employment, but instead for hobbies, housework and self care.

Read more: 'No way to live': Why this company is rejecting a 40-hour workweek

The companies in the study also skewed toward smaller businesses (from under 10 to over 400 employees) with fairly young worker populations. But the researchers say they are in talks with larger, better-known companies with 1,000 to 35,000 employees for 2023 pilots, which will also allow for control groups within companies. The participating organizations spanned tech (36%), professional services (27%) and nonprofits (9%), with the remainder spread across arts, manufacturing, construction, education, food, health care and retail. Most employees were based in the US, Ireland and Australia, with a small number in the UK, New Zealand and Canada.

Critically, employees didn't report an increase in the intensity of their work. A two-month pre-planning program included workshops on reducing work hours by eliminating unnecessary, inefficient and duplicitous work, rather than working in high gear. Most companies adopted four-day schedules, though a small percentage opted for shorter five-day schedules.

The research also suggests that four-day weeks might spur dividends for the environment.

"There's good reason to believe that work time reduction will be a tailwind in the struggle to reduce carbon emissions," Schor said. The researchers didn't attempt an exhaustive environmental tally, but employees commuted about one hour less per week on average and car commuters dropped by 4%. Prior studies have shown correlation between work hours and emissions.

One low note came around gender: The study found no change in the balance of household tasks, meaning that when men had a free day off, they didn't do more housework, though they helped a little more on child care.

Read more: The case for the four-day workweek

After the trials, workers said they would want raises to return to the status quo. Forty-two percent said they'd need at least a 26% to 50% salary increase, 13% said they'd need more than 50%, and 13% said no amount of money could get them back to a 40-hour week. As one employee wrote in a survey, "The 4-day work week is equivalent to a ~25% pay bump in my opinion."

"We're looking forward to seeing what the companies have learned in a year," said Charlotte Lockhart, co-founder and managing director of 4 Day Week Global. "As wonderful as these results are, it's just a pilot, and what we're looking for is the long-term sustainable model."