How could a four-day working week impact employment?

It was recently reported that 200 UK companies have signed up to a permanent four-day working week for all of their employees with no loss of pay. This follows a pilot that took place in the UK in February 2023, which resulted in almost every participating company continuing with the four-day working week policy.

The talk of a four-day working week gathered force last year in light of the Labour Government’s ambitious plans to reform the UK employment law. The resulting Employment Rights Bill, however, did not feature a four-day working week at all. It included minor changes to the flexible working regulations to shift the balance more in favour of the employees, although it did not go as far as was expected. For more information on the latest proposed changes to the flexible working regulations, click here.

What are the challenges of a four-day working week for employers?

The campaign for a permanent four-day working week, however, stands in complete contrast to the moves made by some of the biggest employers in the world. JP Morgan Chase this month summoned all staff back to the office five days a week from March onwards, thus ending the Covid-era practice of remote and hybrid working. Amazon has done the same in January. The trend among big UK companies varies from industry to industry. Three to four days in the office seems to be popular among employees, although some employers have called back their staff to the office five days a week.

Implementing a permanent four-day working week in your company will not be short of challenges. Employers will need to carefully weigh up their options, including considering how they can sustain the same level of productivity and that it is viable for the company.

For some industries, it may not be suitable. For example, businesses that require constant customer interaction, such as retail, healthcare, and hospitality, may struggle to maintain service levels if employees work fewer days. Alternatively, if employers need to hire additional staff to cover shifts, this could cost the company more money.

Employers who are considering making the shift to a four-day working week will also need to revise all employment contracts and working time regulations, and potentially reassess the benefits offered. This may also come with a substantial cost depending on the size of the company due to the legal and administrative burdens. It could also lead to employees working extremely long hours to ensure their work is completed, and this could result in a drop in standard and/or service.

Undoubtedly, a four-day working week has many benefits. Employees are likely to be more content in work, leading to a higher retention rate for the employer. It provides employees with more flexibility and may also lead to a boost in morale amongst teams. However, legislation towards a permanent four-day working week seems to be a distant dream, made more acute with the Trump administration in the US, which will inevitably shift the balance of power further to the corporations.

If you have questions or concerns about flexible working, employee management or business immigration queries, please contact Sungjin Park.