A new study by Autonomy has revealed the viable options for firms wanting to switch to a four-day (32 hour) working week.
The study, which used profitability statistics on over 50,000 leading UK firms, simulated the best and worst case scenarios regarding profit rates for a four-day week.
Under the best-case scenario, the group reported that a reduction in hours would be “entirely offset” by increases in productivity and price increases. Whilst under the worst-case scenario, a four-day week with no loss of pay would be affordable for most firms once the initial phase of the Covid-19 crisis passed.
Additionally for the worst case scenario, some firms in high-labour cost industries could experience cash flow problems but only if a four day week was implemented too quickly.
The report recommended that the public sector should “lead the way” in adopting shorter working hours and that trade unions should be given a “stronger voice” to negotiate working time reductions in their specific sectors.
Will Stronge, director of research at Autonomy, said: “For the large majority of firms, reducing working hours is an entirely realistic goal for the near future. By providing a hypothetical ‘stress test’, we can dispel any myths about the affordability of a four-day working week.
“Any policy push will have to be carefully designed, and different strategies would need to be deployed for different industries. However, what is remarkable is that if it happened overnight, with no planning, most firms would still remain profitable.”
He added: “The four-day week is picking up momentum across the world post Covid-19 and we’re calling on the government to begin investigating the best options for rolling it out.”