ESG Investing

The 4-Day Work Week Finds Greater Adoption as Businesses See Benefits

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The “Great Resignation” has seen millions of Americans quit their jobs in search of better working conditions. A November 2021 survey from Eagle Hill Consulting Research found that a third of employees report planning to leave their organization in the next 12 months—up from the 26% who said so in November 2020 and 29% in May 2021.

With more options on the table than many people have ever had before, some workers and companies point to the 4-day work week as a possible avenue to help feel employees feel less restless. Tellingly, some 83% claimed in the Eagle Hill survey that a 4-day work week would alleviate burnout. The evidence seems to bear it out, as companies and employees who have implemented it witness a range of benefits.

The Benefits of a 4-Day Work Week

The 4-day work week is far from new. Although COVID-19 certainly helped it gain traction, the concept precedes the pandemic. A 2019 study from the UK’s Henley Business School suggested a few of the effects a 4-day work week might bring. For instance, the abbreviated work week has the potential to improve employee well-being; about three-quarters of companies that adopted a 4-day work week said their employees felt happier, less stressed, and healthier. The research also noted the climate benefits of reducing employees’ commutes. Employees estimated they would drive 557.8 million fewer miles per week with a 4-day week, cutting transport emissions. The carbon reductions from even one less day of commuting are immense—up to 20%, according to one UK study.

Perhaps most surprisingly, nearly two-thirds of companies that adopted a 4-day work week improved their productivity. US technology giant Microsoft piloted the concept in Japan and saw a 40% jump, along with a 23% reduction in electricity costs. Since implementing a 4-day week in 2019, digital marketing agency Versa has seen revenue increase by 46% and nearly tripled profits.

These benefits have encouraged various countries’ governments to begin testing the idea. Iceland began trialing the 4-day week in 2015; the governments of Scotland and Spain did the same in 2021. Despite its notoriety for long working hours, Japan has also recently encouraged the switch.

The results of both research and real-world trial programs suggest that the 4-day week work week could play a role in making the future of work more sustainable.

US Companies Sign On

Perhaps unthinkable to US companies just a few years ago, the 4-day work week may now be finally taking root here. Earlier this year, California-based technology group Bolt revealed it had switched to a 4-day week. Outdoor technology company Wanderlust struck Mondays off the working roster early in the pandemic. A year later, CEO Mike Melillo cited the benefits of giving employees “more space and time to be charged for the week.”

Nonprofit 4 Day Week Global campaigns for more companies to follow suit. The group’s work involves coordinating a pilot program that offers US organizations training, mentoring, networking, and research to boost their chances of successfully adopting a 4-day work week via a 6-month trial. The scheme runs parallel to similar pilot schemes in the UK, New Zealand, and Ireland.

The Future of Work

The results of both research and real-world trial programs suggest that the 4-day week work week could play a role in making the future of work more sustainable and improving the quality of jobs, especially as the coronavirus crisis continues to push employee welfare to the top of the ESG agenda. The pandemic has shown more companies that designing long-lasting jobs with the power to attract, retain, and empower employees can drive long-term value for all stakeholders.

Supporting the adoption of a 4-day work week and investing in employee welfare may help move several ESG balls closer to the goal. The effects of this single change extend far beyond employees alone; along with companies’ eyes toward their bottom lines, those who support efforts to counter climate change may also see the 4-day work week as a powerful tool to achieve a more sustainable planet and further encourage more sustainable business.

Any company, security, fund or other investment identified herein is provided solely for illustrative purposes and should not be construed as a recommendation or solicitation for the purchase or sale of any such investment.

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