Advise & Growth

Forget work-life balance, and focus on productivity. You’ll have more free time

If workers are having trouble concentrating on the job, it is likewise all too easy for employers to misunderstand how work flexibility can be a solution to poor productivity. Most of the conversation about flexibility focuses on the work-life balance benefits and treats the improvement of productivity as a by-product of the policy. That is, a reduction in working hours generates higher productivity as a consequence of a better work-life balance.

There is conclusive evidence to support this assumption, including a 2009 analysis by the National Bureau of Economic Research in the United States, which suggested an interactive symbiosis between productivity and work-life balance (WLB): “[W]ell managed firms tend to be more productive and more energy efficient . . . better-managed firms also have better WLB practices.”

Despite the data, boards and senior managers are inclined to encounter the four-day week as if it were a risky proposition. They fear either the anticipated benefits to productivity will not accrue, or the workforce will–sooner or later–give up its initial enthusiasm for the project, and productivity will revert to the norm. Workers, for their part, tend to worry that the flexible working arrangement is merely a ruse to reduce pay and benefits.

The Perpetual Guardian four-day week offsets these risks by making productivity, not work-life balance, the point of concentration. This is what differentiated our policy from many that had been attempted previously, and it was the driver of success in every metric, from employee satisfaction to company revenue. Indeed, the four-day week policy was referred to internally as the ‘productivity week policy.’

Based on this core agreement between management and staff to deliver mutually agreed levels of productivity in four days rather than five, everyone understood their role and responsibility within the trial, and everyone stood to benefit in tangible ways.

The purpose of our pretrial planning period was to determine the measures of productivity to be applied to individual teams. I have to admit, before the trial we lacked adequate productivity measures across some of our business units. Ironically, even if the trial had failed spectacularly, we would have emerged with a greatly enhanced understanding of the dynamics and appropriate performance benchmarks necessary for the efficient running of the company.

I would venture the same is true for many companies. If so, a trial will at least produce a comprehensive picture of appropriate output for each team or worker, which can only be to the advantage of boards and shareholders who are constantly seeking valuable insights about their business or investment.

If all parties enter a trial knowing the mandatory outcome is the maintenance of standard company productivity, the exercise is much easier for the CEO to defend and for boards to justify to shareholders. When the concentration is on output and output does not change, there is no adverse impact on the economics of the organization from implementing the policy.

Its focus on output makes the four-day week part of the solution. The typical work patterns and performance rewards of corporations prevent men from being the best dads they can be and hinder the career progression of women who are primary caregivers. As long as the time-based approach to work remains the standard, this cannot improve much.

Recognizing this, many firms–while stopping short of trialing or adopting a four-day week outright–are now focusing on improving the gender balance, closing the pay gap, and offering more flexibility to allow for family and childcare obligations.

Flexible working arrangements are allowing more people to become employable and employers to draw from a deeper pool of talent, with work-from-home arrangements offering paid work to skilled women and men who are caring for young children. Technology facilitates remote conference calls and webinars, and organizational cohesion is maintained by periodic face-to-face meetings with the team.

I fear there is an inherently ad-hoc bent to these arrangements, which in many cases are based on the argument of the individual worker that flexibility in their case will benefit the company. Better for workers and companies is a truly comprehensive approach, one that frees up some of the time of all of the people by setting a base productivity level. This can directly reduce gender inequality in personal labor and professional compensation. It can help couples find balance in their personal responsibilities and save some money on childcare.

In particular, productivity-based flexibility removes many of the obstacles that have historically prevented women from ascending to senior levels of business and governance in the same numbers as men.

In our experience at Perpetual Guardian, the four-day week empowered staff to make decisions and also gave them a collective ownership of the future of work. It is evidence of how this work model levels the playing field for all workers because compensation is negotiated on productivity. Differences in gender, ethnicity, age, and even work history are irrelevant, as long as the worker is qualified for and capable in their assigned role.

The four-day week proves definitively there is no need to resort to gigs and zero-hour contracts and risk losing hard-fought-for protections for workers. The companies that persist in this behavior are intent on milking every last drop of human capital.

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