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8 min read - August 15, 2022

Flexible Working

There has been much media lately on the popularity of the 4-day work week. It has been positioned as a flexible working approach for employees. What is it and where does it offer (and not offer) flexibility?

This article outlines the history, current practices, benefits and challenges of the 4-day work week; and explores the difference between this practice and other Flexible Work Arrangements. It highlights the importance of understanding what employees expect and prefer, then making informed decisions to ensure any new ways-of-working align with the varied needs of employees, as well as the needs of the business.

What is the 4-day work week?

The 5-day work week has largely been a norm in the Western world since the early 1900s when union advocacy reduced work from a then 6-day week – where several religions observed the 7th day as a religious day of celebration and rest.  In the 1920s and 1930s, entrepreneurs like Henry Ford found that decreasing workweeks from 60 plus hours to 40 could actually increase productivity.

A 4-day workweek is an arrangement where a workplace has its employee work over the course of 4 days per week, rather than the more customary 5 days, without a deduction in remuneration.

Two main approaches have been:

  • 100-80-100 model - meaning 100% pay for 80% of the time, in exchange for a commitment to maintain at 100% productivity, therefore workday length is subject to an employee’s ability to maintain productivity in less hours
  • compressed model – meaning 100% of hours, distributed across 4 days, resulting in longer workdays

The 4-day week movement has grown considerably in recent years, with increasing numbers of organisations around the world trialling and moving permanently to a 4-day working week. The most common approach in New Zealand being a 32-hour work week, on a fixed work schedule.

To ensure consistent service for customers, a 4-day work week schedule, may see a split among employees of the “day off”, and the “day off” may have even be split into half days off. Where the impact to customers or workload is not significantly affected by the 4-day work week, organisations have chosen common days off, to give 3 consecutive days off. 

In 2022, not-for-profit advocacy group 4 Day Week Global launched a series of six-month trials for companies including 20 organisations across Australia and New Zealand. Since the COVID-19 pandemic, several governments have proposed and launched 4-day working week trials, including Scotland, Spain, Japan and Belgium. The Prime Ministers of New Zealand and Finland have each advocated for a 4-day workweek as a consideration.  

Benefits and challenges of the 4-day work week

In New Zealand, Perpetual Guardian trialled a 4-day work week in March 2018. The trial was tracked and assessed, then extended permanently. According to Perpetual Guardian’s results the trial saw increased productivity, customer engagement levels, and employee engagement; reduced employee stress levels; and improved work–life balance. Their revenue remained stable while costs went down, due to less power being used throughout the period. However, while 4-day work weeks were deemed a success for most, not everyone involved within the Perpetual Guardian trial reported feeling a positive experience, with some feeling increased pressure to complete work within a shorter time frame, particularly around deadlines.

Most of organisations that have implemented a change, have done it in-order to capitalise on potential benefits for employees and employers.

Potential benefits:

  • improving work-life balance by giving employees more time to invest in personal activities
  • supporting diversity in the workforce, such weekday absences for parents or caregivers
  • supporting gender equality, and lower earners in the community through employees having more opportunity to share, a more equal share of paid and unpaid work
  • reducing environmental impacts associated with attending an office environment (e.g., power consumption, traffic congestion, etc.)
  • having employees who are more refreshed, due to increased leisure time, therefore aiding productivity and/or creativity
  • staggering demand on other organisations/services e.g., you may remember before banking was mostly online, and banks had skeleton staff at lunchtime and were closed on weekends; other employees had to use their lunchbreak to visit a bank, and were stuck in long queues
  • retaining skilled employees and attracting new candidates whom the approach appeals to
  • reducing unnecessary employee absenteeism e.g., taking a day off for an appointment, when only a few hours might be needed

What is less commonly discussed are the downsides to the approach, when a deliberate support system, has not been set up to adequately support the way-of-working, or where the approach doesn’t suit some or all employees:

Potential challenges:

  • balancing “time off”, if scheduled at different times, with workload, workflow or organisational cultural/engagement strategies e.g., when an employee is having a “day off” whilst others are working, this can lead to bottlenecks, delays or expectations of checking emails/answering calls etc. on a “day off”
  • scheduling issues if “time off” is scheduled at different times e.g., planning meetings when everyone is in the office
  • failing to be clear on work productivity expectations, resulting in employees feeling demoralised about longer workdays, or when required to meet deadlines
  • failing to recognise where some employees would actually prefer working 5 shorter days per week e.g., around school hours, regular exercise etc.
  • failing to recognise where a fixed schedule of work does not allow the flexibility often required to allow for attending doctor appointments, school performances, hobby classes etc.
  • meeting the needs of customers, users or suppliers of the organisation

Flexible Work Arrangements

An increase in remote work during the COVID-19 pandemic led to an increase in the desire for flexible work arrangements. This preference for flexibility has always been there, however the pandemic turned this into an expectation rather than a luxury. Employees are actively leaving their current roles in search for more flexible ones, whilst candidates are only looking for employers that allow flexibility.

Flexibility can be many things to employees, including:

  • choosing what hours or days to work – on a permanent or temporary basis
  • being able to renegotiate changes to days or hours, without feeling guilty
  • having options regarding the location of work
  • having the option to have time off for special events or needs
  • having a shorter work week, with a proportionate workload – even for less remuneration
  • being measured on productivity not hours of work

Some new research suggests that employees would actually prefer other flexible arrangements over a fixed 4-day model.

Regardless, organisations will still need to factor in customer needs and organisational effectiveness in any option they consider, for example:

  • ensuring some consistency across the team, such as requiring all team members to work core hours on 1-3 days per week, so that there are deliberate “culture and connection” activities
  • building trust and confidence across the team, that leaders and team members are living up to their respective expectations
  • clear communication channels with consideration to employees that may be working different patterns or flexibility structures than their team or management.

Managing Flexible Work Requests

Even with an organisation-wide policy or practice in place around Flexible Work Arrangements, an employer will still have the responsibility to respond to formal Flexible Work Requests under the Employment Relations Act.

An employee has the statutory right to make a request for a variation of their working arrangements, which the employer is required to respond to not later than 1 month after receiving it. The employer many refuse a request, only if it cannot be accommodated on grounds outlined in the Act, and if an employer does not deal with a request in accordance with the process specified in the Act, then the employee may raise their concerns to the Employment Relations Authority.

An employee can request a variation to, 1 or more of the following:

  • hours or days of work
  • the place/location of work
  • the employee’s duties at work

The employee’s request must be made in writing, specify whether the variation is permanent or for a temporary period of time, and outline what additional support they may require.

If the employer refuses an employee’s request, they must state the ground for refusal; and explain the reasons for that ground. Grounds for refusal of request by employer, include:

  • inability to reorganise work among existing workers
  • inability to recruit additional workers
  • detrimental impact on quality
  • detrimental impact on performance
  • insufficiency of work during the periods the employee proposes to work
  • planned structural changes
  • burden of additional costs
  • detrimental effect on ability to meet customer demand

An employer must refuse a request if the employee’s working arrangements would be inconsistent with the collective agreement an employee is bound to.

There are also special considerations in requests related to the impacts of Domestic Violence.

Choosing an approach

If you are considering creating or updating a Flexible Work Policy or Practice, then be clear on your purpose for exploring it and the outcomes you want to achieve.

Ask your team for their input and put together a working group to explore the potential challenges, and ways to optimise your potential approaches.

Once an approach is in place, review and adjust it, or the support mechanisms around it. This might just be having open communication channels, and reiterating expectations clearly as people adapt.

Lastly, don’t expect a “one size fits all approach” will work. There will still be occasions to make arrangements specific to an employee or group of employees. When you do this, use common principles to guide your decision-making. This might mean considering the type of employer you want to be and the type of employee you want to attract.

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