The five-day working week is often credited to Henry Ford, who in 1914 proposed that his car production
switch from a six-day working week to five. The creation of unions in the 20th century helped to
make a five-day week and two days’ rest the norm.

There has been much debate about a four-day working week, but the pandemic and technological advancements have begun to shift some employers’ mindsets to one that is more open and trusting of their workforces. Many workplaces have been experimenting with different types of flexible working arrangements for years now, but the pandemic has made the need for flexibility far more pressing.

Some companies are trialling a four-day work week.

When Microsoft trialled a four-day week with no loss of pay in their Japan office, the company claimed productivity went up by just under 40%. Microsoft Japan also found that electricity costs fell by 23%, and when workers took Fridays off, they printed almost 60% less. The four-day-working-week pilot that took place in Iceland between 2015 and 2019 was hailed an “overwhelming success”. 2,500 workers took part in the trial
with the results revealing that worker wellbeing increased in areas such as stress and burnout, health and
work-life balance.

In 2018, estate planners Perpetual  Guardian entered their 240 staff into a  four-day-work week trial, resulting in 78% of them saying they were able to better manage their work-life balance – an increase of 24 percentage points. In 2020, Unilever also stepped forward in New Zealand with plans for a four-day week. It placed the 81 employees based in the country into a year-long trial.

Spain launched a four-day-week trial in 2021, following calls from left-wing party Más País. The trial is set to run for three years.

“With the four-day work week (32 hours), we’re launching into the real debate of our times,” said Iñigo Errejón of Más País on Twitter.

But what about closer to home, in Australia?

The trend towards offering a compressed work week as a form of flexible working is on the rise, according to
one prominent remuneration consulting firm. Organisations offering compressed work weeks – full time hours over four days rather than five, for example – has risen by 29 per cent over the last four years. Today, more than one in four Australian organisations (27 per cent) are offering this benefit to employees.

The way we work has radically changed, and we are redefining our workplaces and working models accordingly. In addition, the war for talent has intensified due to continued border closures, and as a result Australian businesses are reimagining their benefits programs in their efforts to attract and retain employees.

Not a one size fits all approach, but there are benefits …

The four-day working week may not work for every organisation, and those that are heavily reliant on customer service tend to tread carefully. But there are other types of flexible working practices. Other forms of
flexibility may be more suitable for some organisations, at least in the short term. These include remote work,
working part-time (at reduced pay) or a mix between remote and office work.

Undoubtedly, we are moving into a future of more flexible working practices, a future that has been catalysed
by the pandemic. The four-day working week has the potential of reducing unemployment, raising productivity and improving life and work satisfaction. But organisations may need to reflect carefully on which forms of flexibility may release the greatest wellbeing and productivity benefits for them and their employees.

Source: World Economic Forum & Mercer, 2022.

The COVID-19 pandemic disrupted labor markets globally during 2020. The short-term consequences
were sudden and often severe: Millions of people were furloughed or lost jobs, and others rapidly adjusted
to working from home as offices closed. Many other workers were deemed essential and continued
to work in hospitals and grocery stores, on garbage trucks and in warehouses.

A recent McKinsey report outlined some key observations which will impact the world of work into the next
decade.

1. Remote work and virtual meetings are likely to continue. The report estimates that about 20 to 25 percent of the workforces in advanced economies could work from home between three and five days a week. This represents
   four to five times more remote work than before the pandemic and could prompt a large change in the geography of work, as individuals and companies shift out of large cities into suburbs and small cities. The finance, management,
   professional services & information sectors have the highest potential for remote work. Remote working would open up additional talent pools for business, which prior to Covid, may have made hiring decisions based on on proximity to the office.
2. Ecommerce has grown 2 to 5 times faster than before the pandemic. Roughly three-quarters of people using digital channels for the first time during the pandemic say they will continue using them when things return to “normal,” according to Consumer surveys conducted around the world. Other kinds of virtual transactions such as telemedicine, online banking, and streaming entertainment have also taken off. These virtual practices may decline somewhat as economies reopen but are likely to continue well above level seen before the pandemic.
3. COVID-19 may propel faster adoption of automation and AI. In a global survey of 800 senior executives
   in July 2020, two-thirds said they were stepping up investment in automation and AI either somewhat or
   significantly. Many companies deployed automation and AI in warehouses, grocery stores, call centers, and
   manufacturing plants to reduce workplace density and cope with surges in demand. The common feature of
   these automation use cases is their correlation with high scores on physical proximity, and research finds the
   work arenas with high levels of human interaction are likely to see the greatest acceleration in adoption of
   automation and AI.
   4. Mix of occupations may change, little job growth in low-wage occupations anticipated. It’s expected
   the largest negative impact of the pandemic to fall on workers in food service and customer sales and service
   roles, as well as less-skilled office support roles. Jobs in warehousing and transportation may increase as a
   result of the growth in e-commerce and the delivery economy, but those increases are unlikely to offset the
   disruption of many low-wage jobs. Demand for workers in the healthcare and STEM occupations may grow
   more than before the pandemic, reflecting increased attention to health as populations age and incomes rise
   as well as the growing need for people who can create, deploy, and maintain new technologies
   5. As many as 25% more workers may need to switch occupations than before the pandemic. Given
   the expected concentration of job growth in high-wage occupations and declines in low-wage occupations,
   the scale and nature of workforce transitions required in the years ahead will be challenging, according to
   research. The scale of workforce transitions set off by COVID-19’s influence on labor trends increases the
   urgency for businesses and policymakers to take steps to support additional training and education programs
   for workers. Companies and governments exhibited extraordinary flexibility and adaptability in responding to
   the pandemic with purpose and innovation that they might also harness to retool the workforce in ways that
   point to a brighter future of work.

Source: McKinsey & Co, www.mckinsey.com