Australia’s largest health insurer Medibank has announced its intentions to trial a four-day work week in an effort to boost the well-being of its employees.
The company’s trial will be facilitated in conjunction with Macquarie University’s Health and Wellbeing Research Unit as well as 4 Day Week Global—an international organisation aimed at taking the emphasis away from hours worked and onto productivity and output.
Beginning this month, the experiment will be based on the 100:80:100 model prescribed by 4 Day Week Global, where employees maintain 100 percent of their pay, reduce their working hours by 80 percent but are supposed to sustain 100 percent productivity.
Medibank Group Executive Kylie Bishop believes it is the next step in the company’s ambitions to lead the charge when it comes to progressing office culture.
“For more than 18 months now, we’ve been exploring how we can work smarter, offer greater flexibility, and create the best health and wellbeing for our people, in support of our customers”, Ms. Bishop said in a statement on Oct. 23.
Ms. Bishop is adamant the transition will yield a net benefit.
“Our hypothesis is that by creating the opportunity for even greater flexibility, our people and teams will adjust their way of working to improve the value of their outputs and reduce unproductive time. As a result, our people will be happier and healthier, and absenteeism and employee retention will improve. We think that’s worth trying and learning from.”
“We want our people to genuinely enjoy their work and what they do. We believe that by developing a creative and innovative culture within our organisation, we will be able to improve the experience for both our people and customers in the process.”
Effects on Productivity
There is a move to investigate methods to combat declines in productivity in Australia.A study conducted by the Reserve Bank of Australia (RBA) found that over the past three years, labour productivity rates have slumped over the past decade—drawing widespread concern.
Firstly, boosting productivity is imperative during inflationary periods due to its impact on the supply of goods and services.
When productivity is low, general supply within the economy becomes low which then contributes to high prices.
When workers are more productive, they are able to demand higher wages and therefore gain increased purchasing power at a rate faster than the general rate of inflation of goods and services.
Conversely, low rates of productivity mean that an increase in the price of goods and services will quickly outpace wages.
The breakout of the COVID-19 pandemic only exacerbated an already worrying slowdown in productivity growth, spurring many Australians to work from home and a mass interruption of international supply chains seeing business falter nationwide.
Proponents of the four-day work week advocate it as the most feasible way to swiftly increase labour productivity.
Entrepreneurs Charlotte Lockhart and Andrew Barnes founded 4 Day Week Global after saying the model succeeded at their New Zealand-based estate planning company Perpetual Guardian.
“You can have a productive organisation and have these happy well-rested people. We know from our research that people’s levels of stress, insomnia and fatigue decrease when working hours are slightly curtailed”, Ms. Lockhart said.
“Do you want to be operated on by the surgeon who’s been working for four twelve-hour shifts straight or do you want the guy that’s just come off a nice break?”
Ms. Lockhart is also certain the trend is inescapable.
“We used to be the crazy people in the room. Now, I think everybody recognises that it’s inevitable, we will reduce work time. More employers are contacting us to help them make it work.”
Proponents against the idea claim that it is only needed in nations where productivity levels are already low.
Ireland, for example, currently boasts the second-highest rate of productivity in the world at AU$193.26 per hour, suggesting that it is already operating at maximum capacity.
To maintain this level of productivity whilst working one less day a week, Irish employees would need to significantly increase output per hour.
In 1988, Japan shortened their work week from 46 to 30 hours. Already enjoying one of the world’s most productive economies, the move did little to further improve outcomes. The nation’s economic output between 1988 and 1996 was 20 percent lower than what it would have been.
There are also claims that the idea that happiness will improve is contradicted by the hedonic treadmill theory, which states that extra levels of permanent happiness are temporary.
In 2000, France marginally reduced its work week from 39 to 35 hours. Research later found that workers failed to report any increased levels of happiness.
