Does a shorter working day really deliver benefits for your business?

23 September 2018 Category:
Shorter working day

The rising call for shorter working hours is a global phenomenon. But as entrepreneurs and business owners, the question we might ask is whether adopting this practice really provides tangible benefits. Is it even appropriate for the UAE business landscape?

The western world is no stranger to shorter working weeks, especially in the face of dire economic crises. In 1930, the US food manufacturing giant Kellogg Company moved its 24-hour operation from three eight-hour shifts to four shifts of six-hours during the Great Depression with the aim of stimulating greater employment.

For three months in 1974, the UK government imposed a three-day week on industrial and commercial energy users in response to power shortages caused by striking coal miners.

But in today’s world, is there a business case for shortening the working day? Could the potential gains in increased productivity and improved employee health from a six-hour day, for example, more than offset a reduction in working hours?

It’s worth remembering here that productivity does not necessarily bear any relation to hours worked: the average Greek worker puts in 2,035 hours per annum, according to 2016 statistics from the Organisation for Economic Co-operation and Development (OECD). Greece’s productivity, however, is around half that of Germany where workers average only 1,363 hours per annum. In Norway, an average of 1,424 hours per worker yields productivity two and a half times that of Greece.

It’s worth remembering here that productivity does not necessarily bear any relation to hours worked.

Reduced-hour trials: Finnish & Swedish experiments

Official public-sector experiments in recent years have attempted to establish and quantify the social and economic benefits of a shorter working day. Although the results remain largely inconclusive despite the aforementioned OECD figures, there are some takeaways that may positively impact your company’s bottom line.

Finland

Twenty municipalities participated in new scheduling patterns for health and social services in Finland between 1996 and 1998 in response to the recession of the early 1990s. The experiment replaced traditional eight-hour shifts with two six-hour shifts to give longer operating hours with more workers on shorter hours.

Three-quarters of participants reported having more time to spend with family, 72% enjoyed more time for exercise, and all reported less conflict between work and family responsibilities.

Sweden

Between February 2015 and December 2016, 68 nurses at Svartedalens – a care home for the elderly in the Swedish city of Gothenburg – saw their working day shortened from eight hours to six with no corresponding pay cut. The experiment’s control group remained on an eight-hour day. The trial aimed to improve overall employee well-being and counter absenteeism but was eventually abandoned after the costs incurred were deemed to be too high.

The trial nevertheless saw a marked increase in productivity coupled with improved patient care – a 50% self-reported improvement in health among participants when compared to the control group. And better health seems to have influenced attendance records, too: the results reported a drop in sick leave in the first year of the trial to 5.8% compared to 8.5% among nurses in the control group over the same period.

But despite these improvements, the UK-based Chartered Institute for Personnel and Development (CIPD), which was watching the trial closely, suggests there is still no clear consensus among experts as to the wider benefits for individuals and society.

But what could a shorter working day do for companies and employees here in the UAE?

Here we examine three key interconnected outcomes which could deliver benefits for your company.

1. Improved morale: Few employees would turn down the chance of reduced hours for the same pay. But the potential wealth of opportunities offered by a shorter working day is what can really drive increased morale and engagement. In short, those opportunities can drastically transform our work-life balance.

With extra hours and the power to choose how to occupy them, employees can enjoy more time with family, pursue outdoor hobbies or undertake personal projects. Time-intensive and aspirational activities like learning a musical instrument or a new language are common choices.

MetLife’s UAE Employee Benefit Trends Study 2017 (EBTS) reports that over two-thirds of workers would like to see more employers offer work-life balance support and stress management. The flexibility offered by a shorter day can, therefore, deliver a vital component of a company’s holistic health and well-being programme, which can build loyalty and ultimately improve staff retention.

2. Increased health benefits: According to recent research from global insurance advisory firm Willis Towers Watson, stress remains the biggest employee health risk everywhere in the world bar the Asia Pacific region.

We already know that sustained long hours and stress inevitably result in diminishing returns – a 2017 report shows that poor health leads to a 20% increase in absence and a 50% increase in presenteeism (being at work while unwell and thus not producing at full capacity). It would, therefore, follow that a greater emphasis on employee well-being and work-life balance would contribute to a reduction in stress levels and an overall improvement in health.

What is of particular interest to UAE businesses is how these changes may alleviate health problems associated with commonly sedentary lifestyles in the region – obesity, diabetes, hypertension, and cardiovascular disease – by allowing time for family, exercise and self-improvement.

If your employees could achieve anything close to the 50% health improvements reported in the Svartedalens trial, you could see a sizeable drop in sick leave, healthcare usage, and insurance premiums.

3. Higher productivity: As reported in MetLife’s EBTS 2017, productivity improvement has become the number one objective for employers in the UAE with 74% of all companies surveyed citing it as their main focus in the next three to five years.

But how can shorter working days deliver that? The same study goes on to note that most employers now accept that they have some responsibility for employee health and well-being. This trend, it reports, neatly combines two priorities: being attractive in the war for talent and maximising productivity.

Potential improvements in staff morale, happiness and health – all of which are inextricably linked – can, therefore, help deliver increased productivity through a combination of reduced absence and sick leave, higher levels of engagement, enhanced worker satisfaction and lower healthcare usage.

Potential improvements in staff morale, happiness and health – all of which are inextricably linked – can, therefore, help deliver increased productivity through a combination of reduced absence and sick leave, higher levels of engagement, enhanced worker satisfaction and lower healthcare usage.

As the report concludes, the prescription is simple: ‘create an environment that offers more than just money to ensure employees are engaged and perform well over the long term’.

Five points for minimal risk during implementation

Risk and disruption are understandably at the forefront when considering a cultural shift such as this. These five ‘pillars’ of advice can be used to effectively insulate your venture from the risks commonly associated with a poorly-managed alteration to working hours.

1. Educate your staff: Employee education and buy-in is an important first step. Although you would naturally expect staff to welcome a reduction in hours whilst maintaining existing salary levels, it’s important for them to understand the rationale: it’s an opportunity for an improved work-life balance with an expectation of greater productivity. Clear guidelines as to exactly what’s expected of them will ensure buy-in and can also make them invaluable ambassadors for your company.

2. Publicise your trial: Publicising the move to shorter hours as an experimental trial will distinguish your venture as innovative, and will expose it to wider publicity. A designated trial period and clear metrics for an initial analysis of results will also lend credibility to your experiment. This is important for employees, clients and the wider business community, and – if managed well – will bring further publicity as you publish interim results.

3. Commit: You will need to demonstrate commitment to making the shorter day mandatory. Half-hearted attempts are doomed – failure to impose them strictly may result in disparity and conflict between those who choose to work a shorter day and those who don’t. Remember, the idea here is to increase productivity by making employees happier, not to sow discontent. And if it’s not universally adopted, it will be much harder to assess the resulting value of your experiment.

4. Communicate: If you are going to publicise it widely, do your clients the courtesy of informing them first and seek their buy-in early on. That’s the right time to reassure them your experiment will not adversely affect business. After all, allowing them to hear it second-hand could leave them wondering whether your venture isn’t perhaps experiencing a dire economic crisis of its own.

5. Adapt: Make your plan uniquely yours. Switching up start times across your staff can ease any issues that may be experiencing with your employees working staggered hours. This way you can ensure that if clients or prospects call there is always someone there. Be willing to be flexible on your plan to meet your unique business requirements.

Be willing to be flexible on your plan to meet your unique business requirements.

The shorter working day – should you try it?

With the challenges of productivity, attraction and retention high on the agenda, adopting a shorter working day certainly merits consideration. Introducing the idea as an experimental trial can mark your business out as a serious innovator, while creative solutions can provide a workaround to some of the doubts you might be harbouring.

The ability to innovate and adapt – a quality associated with successful entrepreneurs – will likely dictate whether you choose to experiment or not. But with little to lose and potentially much to gain, testing the waters is the only way you’ll find out for sure.

Setting up your own business has never been easier. Virtuzone takes care of it all so you can focus on what matters – building your business. For more information about company formation in the UAE mainland or free zones, please call us on +971 4 457 8200, send an email to info@vz.ae, or click here.

About the author: Neil Petch, Chairman at VirtuGroup
About the author: Neil Petch, Chairman at VirtuGroup

With a history of business successes, Neil Petch is well known in the UAE and beyond as a visionary entrepreneur with a passion for helping others establish and grow their own businesses. Neil founded Virtuzone in 2009 and quickly established it as the region’s leading company formation expert, before launching VirtuGroup, a holding company that has a wider mandate of supporting startups from establishment; to successful market entry; and all the way through to exit.