You've probably heard by now of Perpetual Guardian, the innovative New Zealand firm that just trialed a 4 day work week for its entire staff, and has called it a 'resounding success.' It started with an all-hands meeting at which Andrew Barnes, the firm's founder, made an unusual announcement: "You will be working four days a week, and you will be paid for five." His theory was that giving people real time to focus on their lives outside the office - whether that was their kids or elderly parents, life admin, volunteering, travel, or anything else - would make them more productive and happier during their time in the office. And it worked. We caught up with Andrew to find out more.
What inspired you to try the 4 day work?
Whilst traveling last year, I read a couple of articles in the Economist magazine which discussed productivity in the workplace. One article referenced research from the United Kingdom which suggested that true productive hours were in the region of 2.5 hours each day. Other international research largely corroborated these findings, and I was convinced productivity in New Zealand was likely to be little different. This prompted me to think about my own workforce and to question why productivity could be adversely effected…and what could be done to improve it.
In the current environment there are competing pressures. At work, people spend time on social (coffee, talking, surfing the internet), home (dealing with tradespeople, family issues) and business (interruptions, meetings) issues throughout their working day, all of which impacts on their output. So my starting point was, what if I gave each person a day off each week to deal with home, personal and family matters, provided productivity didn’t fall, then would they then change behaviors in their workday in order to get that day off?
In New Zealand we estimate that 1 in 5 people in the workforce suffer from stress or other mental health issues, and it is my belief a better work/life balance would significantly address this.
Of course there were other benefits. In New Zealand we estimate that 1 in 5 people in the workforce suffer from stress or other mental health issues, and it is my belief a better work/life balance would significantly address this. I also want my team to be the best they can be in the office and outside the office, and I was convinced that giving staff more time for personal or family commitments would also generate loyalty and enhance their commitment to the company whilst also delivering benefits to the wider New Zealand society.
Was it a tough sell internally, this idea of giving all 240 staff members a free day off every week? What advice do you have for others who are trying to get innovative work-life policies approved within their organizations?
In one way, no. As I own the company I was able to make the decision to initiate the trial without having to convince external shareholders. Internally however, that was a different story, with most managers being somewhat sceptical of the initiative. Indeed I think that convincing leaders in the company is arguably the toughest hurdle. In order to make the trial work, team leaders needed to be able to guide and encourage their teams to identify how they would change their working practices as well as develop and agree productivity targets to which the team could be held accountable. Where the trial failed (one team) it was largely as a consequence of a failure of leadership. In general, the workforce is enthusiastic (naturally!) The key is to ensure all of the workforce understand they have to take their obligations to maintain productivity seriously.
I am focused upon the output from each individual and their team (which is linked to their pay), not the amount they spend in the office.
In order to get such initiatives approved, the focus should be on productivity, rather than on the headline grabbing concept of an extra day off. What we are talking about is flexible work practices (where there is overwhelming evidence of benefits to companies) linked to productivity. I am focused upon the output from each individual and their team (which is linked to their pay), not the amount they spend in the office. Once that premise is understood, namely that productivity and service standards MUST be maintained, then the benefits that accrue to the organization can be viewed as a bonus. Secondly, I recommend that everyone read the research findings from our trial which demonstrate the considerable improvements in staff commitment, stimulation and empowerment that arose from our trial.
What are the key lessons from the trial?
Firstly, it works! We found not only did the work life balance improve (54% to 78%), but stress levels and perceptions of work load went down, which is interesting in the context of doing 5 days work in 4. Engagement scores went up on average over the pre-trial scores by 40%. There was no adverse impact on productivity and service levels.
Secondly, planning is critical. We gave our staff a month to work out how they were going to deliver on the productivity commitments, which involved a combination of adjusting work processes as well as behaviours.
Thirdly, engagement is key. We asked our staff to tell us how THEY were going to do this, essentially engineering the new processes from the bottom up.
Do you see a path to a permanent 4 day work week at Perpetual Guardian based on the trial?
Absolutely! We have some legislative issues to work through as New Zealand employment legislation is largely structured around days at work rather than productivity outcomes. This means for example, we have to accrue leave even for the days the staff have off. This will require some creativity in the way we structure a permanent 4 day work week.
A ruthless work culture does not necessarily deliver any real benefits for business.
The other issue will be to ensure staff do not start taking a 4 day week for granted and revert to old ways of working and behaviour. In our scheme the day off is a gift - contractual working hours remain based upon a 5 day week. This means that if a team consistently fails to deliver on its productivity promise, management can reinstate a 5 day week. This keeps the onus upon the team to maintain its performance over the longer term.
Mindr is based in NYC, which is famous for a ruthless work culture. What do you think we could learn from New Zealand when it comes to work-life issues?
The Kiwi way is to work hard but also to play hard. We do not, as a general rule, take ourselves too seriously, and our culture is not particularly hierarchical. Consequently we are pretty adaptive and creative. I think this goes to prove that a ruthless work culture does not necessarily deliver any real benefits for business. In some ways the image of working long and hard may be more important than the productivity it generates. This is, I think a key lesson from the trial: work smarter, not longer or harder. Of course we also live in one of the most beautiful countries in the world, with great scenery on our doorstep. It is therefore easier for us to get out and enjoy our environment and relax.
What advice do you give your employees who have ambitious goals both at work and at home?
Just to be the best you can be. We often sacrifice time with our families in exchange for often nebulous objectives at work. This is time that is never recoverable. So be clear what your objectives are, but don’t sacrifice everything in the pursuit.