What are the financial implications of switching to a 4-day week?

In early February the results from the largest trial of a four-day week were released in what was described as a ‘major breakthrough’.

What was the 4-day working week trial?

The UK pilot commenced in June 2022 with 61 companies taking part over a six-month period. Companies taking part were offered mentoring and workshops to support them in this significant change in working practices. The 2,900 employees that took part in the trial remained on the same salary, whilst working across four days instead of five.

What were the results?

Whilst the trial officially came to an end earlier this year, a vast majority of those taking part have continued with this ground-breaking new working pattern. In fact, an astounding 56 out of 61 companies have opted to extend their four-day week trial, including 18 that have made this a permanent change in their working practices.

Surveys have identified that 39% of staff felt less stressed, 40% were able to sleep better and 54% found their work life balance improved. Furthermore, the number of sick days taken fell by two thirds compared to the same period the previous year. Most companies reported that they were satisfied with both productivity and business performance during the trial period.

Will there be financial implications?

With so many businesses opting to continue the four-day week, the business world is asking what the exact financial implications this could have. For the most part, early indications show that financially, companies adopting this way of working are reducing costs, and here’s why…

Reduced overhead costs

Of course, with your office closed for one day a week your overhead costs will drop significantly, this not only includes heating and lighting, but also in office amenities such as tea, coffee, and milk.

Happier, more motivated employees

A happy employee is a more productive employee which will ultimately mean more work achieved and to a higher quality – a win win for both you and your clients.

Higher retention

Expanding on the above point, happier employees will mean higher retention of your employees. Not only will this reduce recruitment costs to replace those that leave, but the further training costs for new employees.

Attract top talent

When it comes to hiring the ideal candidate for a role, a four-day working week is a huge draw for many, meaning quicker and more effective recruitment with the most suitable person for the role. Again, in the long run, this could save you a great deal of money and time.

Of course, we must look at the other side of the coin; the four-day working week won’t suit every business model and with some opting to condense the hours of a five-day week into four, employees may find the longer working hours stressful.

Ultimately, when looking to incorporate this new way of working, companies must consider all angles and identify whether it makes strategic sense to take this path.

What are your thoughts on the four-day week? Is it something your business would consider? Speak to us today if you’d like to discuss the financial implications of this move with our team of accountants!