By Daniel Lanyon on Friday 26 August 2022
Who doesn’t want an extra 52 days off per year?
If you’re reading this you probably don’t work at Atom Bank.
Some, according to the UK’s first app-only digital bank, are choosing to add in more quality time with young children or to volunteer as a medical courier, others walk the dog or head for a paddle board. I imagine a fair few probably also just catch up with doom-scrolling social media too.
Will the trend catch on? Yes, that would be my guess but the road to wider adoption will be quite complicated. A dire level of sentiment for the next 12 months, would suggest for bosses who have to make the calls it is a tough sell as markets price in economic catastrophe.
“Sure, let’s drop 20 per cent of productivity just as our costs are increasing by double digits and the economy moves into recession…or something worse.”
This fictionalised but not hard to imagine sentiment misses the point, according to Atom’s learnings from its six-month experiment of a four-day week. Atom says its experience so far is “overwhelmingly positive” with no loss in productivity.
“Over six months on from introducing our new four-day working week, it’s clear that it has been a huge success for our business and our people,” Atom chief people officer Anne-Marie Lister said.
The company’s research suggests somewhat unsurprising that 91 per cent of employees said they could accomplish everything they needed in four days, and 92 per cent said they found efficiencies in how they work because of the shorter week.
It also found, somewhat unsurprisingly also that applications for roles at the company increased, by 49 per cent from January 2021 to 2022.
What about the competition? Surely, Atom’s - or other 4-day-a-weekers (FDAWs) competitors will see it as an opportunity to steal a march on the opposition in a market where the speed of execution to launch new features and products is a strong predictor of success.
While it may seem a quintessential tech/fintech move also from Atom that many in other industries would simply roll their eyes at, the four-day week has growing support.
In fact, as part of a nationwide pilot scheme launched in June of 2022, there currently are 3,300 workers participating from across 70 companies who have committed to what’s called the 100:80:100 model scheme to explore the four-day week idea.
This means workers will receive 100 per cent of pay for 80 per cent of the time if they commit to 100 per cent productivity while they’re working.
A number of non-profit organisations 4 Day Week Global and the 4 Day Week Campaign, in partnership with UK-based think tank Autonomy, and researchers at Cambridge University, Oxford University and Boston College, are behind the trial which is the largest of its kind in the world.
The six-month trial will conclude at the end of the year, just as many fear that we could tip into recession and the worst of inflation.
For many firms, this will simply mean a hard no when it comes to considering the adoption of a 20 per cent shorter week for staff. Many firms, especially those not in white-collar industries will find it hard to find the efficiencies that could lead to the same level of output at 80 per cent of in input. Manufacturing, services or construction seem obvious examples. It’s quite hard for a hairdresser to find efficiencies, for example.
That being said, unless you can lock in a double-digit pay rise then in effect you are set for a real-time pay cut in the coming year. With some predictions that in the UK inflation may peak at closer to 20 per cent, most companies will struggle to lock in real-term pay rises for their employees.
Reducing hours instead may in some circumstances be a good compromise.
What is most likely, and similar to the question of new working patterns prompted by the pandemic, is that the labour market within industries bifurcates with some companies choosing the newer style of remote working and/or four-day weeks while others order staff back to the office and tell them they need to work harder in order to survive the next few years.
What this does to companies' long-term productivity relative to industry peers, wage growth at both types of firms, and talent acquisition are some questions that will remain unanswered until a new equilibrium has settled.
And if you are an Atom employee and reading this on your day, thanks for reading AltFi.