The case for a four-day week for startups and SMEs

Appetite for a four-day week has never been higher amongst workers - but niggling employer concerns need addressing before a national rollout can begin.

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Written and reviewed by:
Joe Moore

The four-day working week is a huge and largely untapped asset for new businesses that can supercharge growth and performance, and allow them to compete more effectively against larger firms.

There are a number of considerable risks associated with the launch of any new business. The four-day week may seem like an unnecessary addition that adds few benefits to the business outside of staff welfare. But this couldn’t be further from the truth.

A four-day week stimulates innovation. Rested minds are more creative. They are more likely to imagine and discover new ways to improve your business. One in four sick days are a direct result of overwork; whereas a four-day week reduces sickness-related absences.

The UK four-day week trial saw a significant decline in stress and burnout for employees, with 71% of employees reporting lower levels of burnout and an overall 65% reduction in absenteeism. Positive mental health increased by 43% and positive emotion at work increased by 64%.

New businesses are all about creativity and innovation and an abundance of this at the start of any new venture, is essential to generating the momentum to get the business off the ground and maintain sustained growth. A shortened work week creates the conditions for these bright ideas to flourish.

Debunking the myth of the ‘lazy’ four-day worker

When employees are well rested, they are also more productive. A four-day week almost always leads to increased productivity. The UK trial showed business performance either increased or at least remained consistent, with 55% of employees reporting an increase in their ability at work. Four-day week trials by big companies such as Microsoft in Japan saw productivity increases as significant as 40%.

This can give new businesses a much needed advantage over larger, well-resourced firms, allowing them to compete more effectively. As the CEO of one consultancy firm put it:

“When you realise that day [off] has allowed you to be relaxed and rested, and ready to absolutely go for it on those other four days, you start to realise that to go back to working on a Friday would feel really wrong – stupid actually”.

Time saved = money gained

Increased innovation and productivity naturally leads to increased revenues. Participants in the UK four-day week trial saw revenues rise by 1.4% during the trial and 35% compared to the same period in 2021.

A four-day week also allows businesses to save on overhead costs. This is crucial for new businesses, where money can be tight. Shifting to a four-day week can save companies money on utilities like rent, electricity and energy consumption.

In November 2021, a study by the Henley Business School, found that businesses saved around 2.2% of their total turnover, by offering a four-day week.

Most importantly for new firms, the policy gives them a competitive edge in the labour market. Startups provide enticing employment opportunities for workers but can often be deemed risky, particularly during a cost of living crisis, where the perceived stability and security of larger firms can dissuade workers from switching jobs.

Recruitment advantages

A four-day week helps attract the best talent from day one. It makes your organisation stand out from competitors, and more attractive to the most talented employees in the field. Firms with a shortened work week have seen a surge in applications: Atom Bank’s four-day working week led to a 500% surge in job applications. Overall, 63% of businesses in the UK trial found it easier to attract talent with the policy.

As well as attracting the best talent, a four-day week ensures that businesses are able to retain those talented workers. During the UK trial, resignations dropped by 57%. This reduced both costs and disruption for businesses; essential for startups that are operating with limited resources.

A four-day week also allows smaller companies to fend off competition from larger firms with more attractive salary packages, wooing talented employees away from their position at startups.

Small companies best-placed to take advantage

In addition to all these benefits, startups lend themselves more naturally to a four-day week for logistical reasons. One of the most common concerns for employers who are thinking of embarking on a four-day week pilot is the effect it will have on existing employment contracts.

During a trial period, employment contracts are almost always left as they are. When making the decision to move permanently to a four-day week, there are two options. One is to re-write employment contracts to recognise the reduction in weekly hours and a new four-day working pattern. The other is to leave contracts as they are and the four-day week is seen as gifted to workers.

This is most commonly done through a staff opt-in agreement that can be renewed every year. For startups debating a four-day week, having it integrated into the business from day one can mitigate the need to alter employment contracts at a later date. This will avoid confusion around the impact on part-time workers.

I rest my business case

The argument for the four-day week for SMEs and startups is incredibly strong. A four-day week stimulates innovation by giving employees more time to rest, which at the beginning of a new business venture can be crucial to its ability to get off the ground.

The four-day week is a resource for businesses. Just as much as it is a benefit for workers, businesses that want to be more productive and competitive should adopt it on that basis alone.

For employers interested in moving to a four-day week, our National Rollout Programme can assist. Find out more here

The 4 Day Week Campaign will be launching their Mini-Manifesto on Tuesday 13 June. Sign up for the event here.

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Written by:
Reviewed by:
Joe Moore
Joe Moore is Business Network Coordinator at the 4 Day Week Campaign, an independent, not-for-profit group lobbying for a four-day, 32 hour working week with no loss of pay for UK workers. The 4 Day Week Campaign also provides support and resources for employers seeking to implement a four-day week, alongside an accreditation scheme to showcase employer best practice.

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