Iceland’s four-day work week was an overwhelming success, and workers around the world are catching on. What does the country’s success mean for APAC, and is it possible to apply these techniques cross-culturally?
Since the publication of a report by the UK think tank Autonomy and Icelandic nonprofit Alda discussing the effects of Iceland’s four-day work week, Iceland’s transition to a higher quality of life has been viewed as a bastion of hope for overworked employees around the world.
The trial involved more than 2,500 workers (over 1% of the country’s entire working population) when it started in 2015. The trials, which aimed to improve work-life balance while also maintaining or even increasing productivity, with salaries remaining the same, was largely considered to be a success. Participants reported that they had more time to themselves, as well as more time to run errands and exercise. Parents said that their mornings were less hectic, and employers found that people seemed more energised at work. Today, 86% of Iceland’s working population has shifted to a shorter work week, or have gained the right to adjust working hours.
“People feel actually more attached to the job in a way that they feel rewarded by having more time,” co-director of Autonomy Will Stronge said to CBC news.
The Nordic Model
Iceland’s success is in part due to the country’s already well-established social welfare policies. The Icelandic government’s economic and social policies make up, and are based on the Nordic model, a mode of governance that includes comprehensive welfare policies, widespread workforce unionisation, universal healthcare, and high rates of public sector employment — principles commonly associated with social democracy. It comes as no surprise that, as a result, Iceland is ranked the fourth happiest country worldwide, according to the 2020 World Happiness Report.
What this demonstrates is that the four-day work week was perhaps not so much a revolutionary pivot to a system that values workers’ well-being and work-life balance as it was a matter of optimising an already employee-centric culture. In essence, the Nordic model functions as a foundation upon which the four-day work week can function, which suggests that its efficacy may vary depending on the existing working culture and socio-economic organisation of the nation where it is implemented.
The Four-Day Work Week is Not Foolproof
Of course, Iceland’s achievement does not suggest that the same model can simply be transplanted to other countries and yield the same results. The study highlights a number of challenges with implementing a four-day work week, such that companies and governments might be able to more effectively coordinate their own efforts to shorten the work week. For instance, some employees found it more difficult to communicate effectively. Managers found it impossible to spend less time at work, and cited concerns that employees who already had a heavy workload would be under additional stress when asked to perform five days’ worth of work in four. One should also note that despite the headlines declaring the new labour policy trial an “overwhelming success”, Iceland did not trial a four-day work week. Instead of omitting an entire eight-hour work day, the two trials reduced hours from 40 to 35 or 36 each week. This is not to say that the results of the trials were insignificant, of course, but it goes to show that more could be done to optimise labour policies designed to improve work-life balance.
Consider the United States, a nation that has been slow to warm up to the idea of the four-day work week: most of the world’s interest in this experiment has not been from American employers. Peter Cappelli, a professor of management at the Wharton School of the University of Pennsylvania, posits that the concept of a shortened work week fundamentally runs counter to American notions of work and capitalism, citing how unions have less power and workers have less political sway than those in, say, the Nordic countries. This might glean some insight as to the socioeconomic conditions under which the four-day work week would have limited effectiveness. Chiefly, Cappelli’s argument suggests that, for the four-day work week to bring about positive effects, it must come in tandem with working conditions and labour policies that value employees and workers.
“I just don’t see contemporary U.S. employers saying, ‘You know what, if we create more value here, we’re gonna give it to the employees.’ I just don’t see that happening,” says Cappelli.
“I hope my boss reads about this.”
New Zealand Prime Minister Jacinda Ardern briefly touched on the idea of a shortened work week last May, and the New Zealand arm of Unilever adopted a policy whereby employees were allowed to work one day less per week for a year with no changes to salary. Interestingly, Japan, the nation notorious for a deep-rooted working culture so cutthroat that it coined a word “karoshi” in the 1970s to define the phenomenon of death from overwork, has been looking into the four-day work week.
Mizuho Financial Group began giving employees the option to work three or four days a week, but at proportionally reduced pay. A project undertaken by Microsoft in August 2019 allowed its 2,300 employees in Japan five consecutive Fridays off without any compromise in pay to evaluate the effects of a shorter work week. The duration of meetings was cut in half, and standard meeting attendance was capped at five employees. The adjusted hours led to a staggering 40 per cent increase in productivity, with 92 per cent of employees communicating that they preferred the shorter work week. Microsoft’s shortened work week was coveted by Japanese workers across the nation, with many an overworked employee hoping that their employers would recognise the benefits of having shortened meetings, streamlined workplace communications, and most importantly, a three-day weekend.
Extra Time Off or Productivity Booster?
That said, whether or not Microsoft’s four-day work week heralds improved work-life balance for the rest of Japan’s workforce remains to be seen. Microsoft Japan is hardly representative of the nation’s workforce, not least because the working culture of transnational companies can differ from local companies and industries. Take for example Japan’s most well-known cultural export: anime. The anime industry produces more than 200 series each year, and as such, studios are highly reliant on a pool of freelancers motivated by a passion for anime so strong that they are willing to work for free. Entry-level “in-between animators” make less than JP¥200 per drawing, with each drawing taking more than an hour to complete. Labour code violations, sleep-deprivation, repeated hospitalisations, and work-related suicides are all part and parcel of the anime industry. Industry-specific trends are observable even in the Alda-Autonomy study. Working hours for some Icelandic public sector staff were reduced only by 13 minutes a day, and for shop workers only 35 minutes per week, a clear indicator that not all jobs can be done in shorter shifts.
Employers have been echoing the adage that the point of the shortened work week is not necessarily to give workers more time off, but to improve productivity and work-life balance. However, as evident in workers’ reactions to Microsoft Japan’s successful working hour reshuffle, fundamental changes in workplace personnel management would be more than welcome in societies with working cultures like Japan’s. As such, perhaps it does not seem implausible to suggest that employees working twelve-hour days should indeed enjoy more time off.
Economist John Maynard Keynes’ classic essay “Economic Possibilities for our Grandchildren” prophesied that within a century, our needs could be met so efficiently that we would only work out of habit or even leisure. And yet, today, even as we live and breathe in the age of telecommunications and deterritorialised workplaces, we are, in an unfortunate turn of events, locked on to a working culture that blurs the line between rest and labour.
The four-day work week has begun to dig itself out of its mischaracterisation as a distant fantasy, but more has to be done for it to succeed.
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