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NEF - Around the world in a shorter working week

Blog posted by : CHARLIE CADYWOULD, NEF SOCIAL POLICY (4th September 2014)

The working hours debate is now well and truly mainstream – with everyone from FTSE bosses to governments curious about the potential benefits of shorter, more flexible working to our wellbeing, economy and environment.

The question now is: does it work in reality?

NEF is now building a database of working time experiments from around the world. We want to bring everything together to find out what more we can learn from the global phenomenon, and explore the widely varying, and often contradictory, responses from employers and employees.

Only a few cases – such as the recent reduction to a 30-hour week for public sector workers in Gothenburg, Sweden – have featured in the media. But they are surprisingly common, and carry a range of different goals and motivations, from “ideas exploration” at Google to “prayer and farming” in Gambia. Here’s a rundown of some of the interesting examples we’ve found so far.

Mixed reviews from Sweden

So far we’ve uncovered over twenty Swedish examples of individual organisations reducing hours to improve productivity and reduce labour costs. For example, Kiruna District Council in Northern Sweden for a long time had its 250 employees working on six-hour days. Initially introduced in 1989 as a short-term experiment in the municipality’s home-help services, the scheme was expanded and lasted for 16 years.

But Swedes still can’t agree about the pros and cons of shorter hours.  The Kiruna scheme ended after one study claimed the reform was costly and lacked positive health benefits. But another study found that the Kiruna experience (shared with six other Swedish municipalities) had a positive impact on absenteeism, leisure and productivity as well as health.

Mats Pilhelm, the Deputy Mayor of Gothenburg, claims that in Kiruna the costs were born by the municipality, but the savings went back to the central government – a mistake that he says will not be repeated in his city. Pilhelm is confident that Gothenburg’s shorter hours will create healthier, happier staff providing a better service. The opposition Moderate Partyfiercely disputes these claims, calling the move a “dishonest and populist ploy” ahead of September’s local elections.

While both sides can be expected to pick and choose the evidence that suits their purposes, the Gothenburg experiment should at least provide some concrete answers: a research team will be involved all the way through to help the Council to produce and interpret the results.

Ahead of the curve in the U.S

Even in the US, where average hours are among the longest in the developed world, innovations in the organisation of work are emerging – particularly in the tech sector.

While Google has attached conditions to its ‘20% time’ scheme, in which employees are encouraged to spend a day a week experimenting with their own ideas, Wired reported last year that such schemes have continued to flourish in Silicon Valley.

Over 2000 miles away in Chicago, software company 37signals switches to a four-day, 32-hour week for six months of the year. Writing in the Yew York Times in 2012, CEO Jason Fried claimed better work gets done in four days than five. Most staff take Fridays off, but some choose a different day. His co-founder, David Heinemeier Hannson, says people come in much more motivated, better rested, and have more fun. 37signals have also introduced a regular ‘month on your own’ experiment, in which staff get a whole month to work on whatever they want, shelving nonessential work for Google-style ideas exploration.

While most benefits from these innovations can’t be quantified, online education company Treehouse, which runs on a four-day week, reportshuge financial achievements. CEO Ryan Carson claims that his company’s 32-hour week has helped generate over $10,000 dollars in yearly sales, and annual growth of over 120%. He says morale is better for the company’s 70 full-time employees, and recruitment and staff retention easier.

Germany’s jobs miracle

Avoiding redundancies and promoting employment has been another chief motivation of many  large-scale reductions in working time. Take the German ‘jobs miracle’ throughout the recession, which has in part been attributed to the policy of Kurzarbeit, or short-time work.

Kurzarbiet allows employers to temporarily reduce hours to share the available work between employees during periods of low demand. Firms could cut working time by up to 50%, with the Government then compensating up to 67% of the foregone net wages of the employee. When demand returned, firms were able to raise hours once again. In total, nearly 1.5 million people were employed under the scheme, with around 400,000 jobs saved. Instead of being thrown out of work, workers could keep earning, and keep developing their skills and experience.

Finland: a new approach to work experience

Finland, among other countries, operates a paid leave scheme, aiming to reduce unemployment. Initially introduced in 1996, the scheme allows employees to take leave from their job for between 90 and 359 days. This is funded by a combination of state, employee and employer contributions. Employees receive a daily allowance, topped up if they take vocational training on their own initiative. During the scheme, employers must recruit a jobless person. The position is temporary, but because the scheme provides opportunities for the unemployed to get experience, and the existing employee to get training, the overall quality of the workforce is improved.

These represent a tiny fraction of the examples of innovative and successful working time reductions that have taken place across the developed world in recent years. Even in the UK, things are changing.Almost a million men now work part-time voluntarily, and in the recession of 2008-9 many firms chose to cut hours rather than jobs.

Despite the many successes, changing the norm remains a significant challenge in the twenty-first century. Particularly in the UK, where very long hours are widespread and strenuously encouraged by government and employers, part-time workers often find themselves marginalised or regarded as lazy.

NEF is calling for examples and case studies from businesses and other organisations that have carried out innovations in this area.  Can you help? If you are involved in a scheme promoting shorter hours – or know someone else who is – please let us know by emailinganna.coote@neweconomics.org

Channel website: https://www.icaew.com

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