Episode 37: quality of hours

00:00:01: About a hundred years ago, a professor from Cambridge in the UK published a book called Economic Possibilities for Our Grandchildren.

00:00:10: His name was John Maynard Keynes.

00:00:13: He's up there with the most influential economists of the twentieth century.

00:00:18: In the book, he examined how productivity and the economy would develop over the following one hundred years.

00:00:25: He reckoned that by twenty thirty, People would only have to work fifteen hours a week.

00:00:31: He thought that improvements in production would benefit prosperity.

00:00:36: He supposed the standard of living, based on income and the possibility to buy goods, would be four to eight times higher than in nineteen thirty.

00:00:45: He was wrong.

00:00:46: Actually, the standard of living today is seventeen times higher.

00:00:51: But... Keynes would never have thought that people today would consume so much more than they did in his day.

00:00:58: However, at the same time, income has not increased in direct proportion to the increase in living standards, meaning that people nowadays need to earn more money to satisfy their needs.

00:01:10: But does this automatically imply they must work longer in order to maintain this level of consumption?

00:01:18: Is time directly related to performance?

00:01:21: We'll find out.

00:01:47: In this podcast series, we examine various working time models.

00:01:52: In episode one, Greece presented its strategy for counteracting the shortage of skilled workers in the country.

00:02:00: By letting people work up to thirteen hours a day for six days a week, financial incentives included.

00:02:07: Episode two focused on a different strategy, the four-day week.

00:02:11: Belgium has enshrined the model in law, but with little success so far, while in Germany, a cooperative bank now only operates four days a week and has been able to increase its productivity and its attractiveness to skilled workers dramatically.

00:02:28: In this episode, we take a different approach.

00:02:31: We change from the individual cases to scientific evaluation.

00:02:36: We want to examine which model suits which scenario and what the future of work could look like.

00:02:45: We actually made a call, so we basically said that there will be a German-wide study on the FORE workweek and we actually asked organisations to apply to participate.

00:02:58: Julia Bachmann is a professor at the University of Munster, Germany.

00:03:04: Her role focuses on the transformation of work.

00:03:07: In twenty-twenty-four she conducted a comprehensive study.

00:03:12: She wanted to find out about the consequences of a four-day week with reduced working hours but with the same pay.

00:03:20: At the organisational level, so productivity, employer attractiveness and so forth and at the employee level such as well-being, stress and their individual performance.

00:03:34: Initially, three hundred companies registered to participate.

00:03:38: Together with a consulting firm, the researcher selected fifty-one organizations that would cover as broad a spectrum of the German economy as possible.

00:03:48: Organizations of varying sizes from a wide range of industries.

00:03:52: A few dropped out of the test early on, stating either economic reasons or issues inside of the organization.

00:04:00: About forty-five companies were involved in the experiment from end to end.

00:04:05: They received training materials went to workshops and swapped ideas with other companies.

00:04:11: They were pretty flexible about how to implement the change to the working week.

00:04:16: They could decide whether the whole workforce or just part of it would work for days.

00:04:21: They could choose when the days off would be and how many hours to reduce.

00:04:26: Asked about their motivations, participating companies stated the following.

00:04:31: Eighty-nine percent of them wanted to make their organization more attractive to employees.

00:04:37: Seventy-seven percent wanted to improve the health of their employees, and fifty-seven percent wanted to increase productivity.

00:04:46: Julia Buckman and her team gave out questionnaires at the beginning, halfway through, and at the end of the test.

00:04:54: Management and employees were both surveyed.

00:04:57: They collected data including profit and turnover, carried out interviews with the people involved, and tried to survey and track the effects on morale and health.

00:05:07: So we try to also measure these bit more objectively by using fitness trackers to capture stress by heart rate and heart rate variability.

00:05:19: We also measured their activity by sport minutes, for instance, and steps walked each day and how they slept both in quality and quantity.

00:05:30: And we also took care samples of employees that measured cortisol, which is a stress hormone that you can measure it here.

00:05:41: At the end of November, the team publicly presented the findings of the report.

00:05:47: The results relating to the organisation's expectations are the following.

00:05:55: According to surveys, more employees are satisfied with their jobs, and the companies say they're better at attracting and keeping hold of staff too.

00:06:04: However, beyond the surveys there's not a lot of solid evidence from more objective measurements.

00:06:11: Health.

00:06:12: Surveys, fitness tracker data and hair samples show that stress has gone down, especially on Fridays, which seems reasonable as a lot of organisations chose this to be the day off, but also on Saturday and Sunday.

00:06:28: Employees have been more active.

00:06:30: People who haven't done sports before the experiment started some, while those who have been active before increased their time for sporting activities and have been getting more sleep.

00:06:42: But it didn't actually lead to fewer sick days.

00:06:46: The impacts on a social level are also interesting.

00:06:50: The participants were asked before the test if they wanted to have more time for self-care, hobbies and social contact.

00:06:58: At the end of the experiment, they were asked the same question.

00:07:01: But the answer was different.

00:07:03: The need for more time to use for social activities has dropped, meaning this one day off has given them enough time to spend on those sorts of things.

00:07:12: Profits and turnover have stayed the same, but productivity went up.

00:07:18: However, it is important to use caution when interpreting results based on organisational key figures.

00:07:25: The relationship between working hours and output in the form of financial indicators such as turnover is not the only measure of productivity.

00:07:34: So, what comes next?

00:07:36: Most companies want to keep the four-day week after the trial period ends.

00:07:41: Eighty-three percent of employees would be on board right away.

00:07:46: Basically, the results are in line with what other studies have found in places like Iceland, Portugal and the UK.

00:07:53: But what we don't have are long-term studies.

00:07:57: That's why Julia Bachmann and her team carried on collecting data after the experiment ended.

00:08:04: We are also interested.

00:08:05: how actually were the organisations affected that switched back to five-day working week?

00:08:13: Did it work out for them or was there a huge frustration with the employees?

00:08:20: Probably interesting for organisations that would like to trial reduced working working time on their own.

00:08:29: so what to do when it's not working out, and also the organizations that continue working, reduced working hours.

00:08:37: Are they still doing this?

00:08:38: Have they changed the models?

00:08:41: What effects do they see?

00:08:42: Because there's not much known about the long-term effects.

00:08:46: When we now see, for instance, reduced stress, more well-being, and positive employee reaction, can this be sustainable?

00:08:54: Employees actually... I think that now the four-day week or the reduced working week is the normal time of working and they basically do not see that this motivates them in the long term, actually.

00:09:11: The findings will be published in the next months.

00:09:14: We will see whether they confirm or deny the previous results and whether there will be new insights on aspects that lacked significance before.

00:09:23: The results might seem good at first.

00:09:25: But the economist wants to make clear that a four-day week isn't the one and only answer.

00:09:35: I think that we'll see reduced working hours in the future, but I don't think that there's one certain specific model that will be implemented.

00:09:48: I don't think that a four-day work week is necessarily the way to go for in every sector.

00:09:55: That's why I like to speak about reduced... working hours these days, because we could see that organizations need flexibility in order to implement for their workweek.

00:10:05: Organizations now say, okay, we reduce working hours, but you can still work five days, because then this works better, for instance, for people with smaller children, because then they can work when their children are in childcare and still can pick them up after work.

00:10:28: There are critics who say that a four-day working week or reduced hours are not possible in every sector.

00:10:35: Julia Backman disagrees.

00:10:37: She acknowledges that for some it is more challenging, but her experiment has proved that a range of organisations, from industrial production to the care sector, are able to do it.

00:10:48: And it's worth trying.

00:10:51: She follows developments in working-time models around the world with interest.

00:10:55: She does not consider Greece's decision to increase working hours to be fundamentally wrong, but...

00:11:01: I think increasing working hours is only a short-term solution to productivity.

00:11:06: And more hours do not necessarily always create more value, especially not value created per hour.

00:11:15: What I mean by this, Greece has high working hours anyway, but they also have a... rather low productivity score compared to other countries.

00:11:27: So for me it should be not necessarily a debate about the number of hours one is working, but more how to improve output.

00:11:38: In twenty fourteen, scientists at Stanford University in the US discovered that working too many hours significantly reduces performance.

00:11:48: Although this only became apparent after fifty hours were worked per week, overtime often leads to absenteeism and increased job turnover before such hours are racked up.

00:12:00: Julia Backman therefore does not consider the model of increased working hours to be sustainable, as the price will be paid by the companies themselves.

00:12:10: It also depends a little bit on the sector.

00:12:13: But if you can see longer working hours, you have higher number of errors, higher number of security related issues at work and things like that.

00:12:22: So personally, I think the focus should shift to models that create sustainable performance, innovation and also high quality of work and life.

00:12:34: The debate surrounding working hours has always been a topic of concern for both employers and employees alike.

00:12:42: There is a reason for the saying, time is money.

00:12:45: For companies in some sectors, longer working hours may make sense in the short term.

00:12:51: However, studies show that in the long term, this has a negative impact on the physical and mental health of employees, as well as on productivity.

00:13:00: Do employers really want to risk absenteeism and high-staff turnover?

00:13:05: Because what is this debate really about?

00:13:09: The answer to how a company can boost its profits

00:13:12: isn't

00:13:12: about how much time has worked but how well that time is used.

00:13:17: The way we work in the future needs to be flexible and that flexibility needs to start in the company's structure and not just with the individual worker.

00:13:29: Greece is a good example of this.

00:13:31: It's much easier for politicians to relax the parameters for working hours, allowing companies to increase them if they choose to, rather than start to question traditional work processes and upend the entire system with new solutions.

00:13:46: Organisations that have successfully introduced shorter working hours had to go through individual processes of change that can be lengthy.

00:13:55: These were often a bit of a struggle at first, but in the end they worked out well.

00:14:00: for employers and employees.

00:14:06: If you like WeWork Europe, do give us a five-star rating and don't forget to subscribe.

00:14:12: Also, if you have any interesting topics or feedback for us, just contact isa.org.

00:14:20: WeWork Europe is the podcast from Isa, the European Centre for Workers' Questions, which receives financial support from the European Union.

00:14:29: This podcast was narrated by me, Rebecca Sharpe.

00:14:32: Script and production by Escucha Audio Identity.