Canadian Companies Try 4-Day Work Week, Discover Pros and Cons

Commuters wait to take the subway at Ossington Station in Toronto on June 22, 2018. The Canadian Press/Tijana Martin

Canadian companies have been trialing the four-day work week with many saying it improved staff morale and retention, but it’s not for everyone.

About 96 percent of workers say they have happier and healthier workplaces after switching to a four-day work week, according to a York University study.

York researchers found that 90 percent of employees reported productivity increased or stayed the same during the study. Eighty-six percent said that four-day work weeks improved retention and recruitment.

The study looked at data from 30 companies and about 3,500 workers collected between July 1, 2022, and June 30, 2023. The companies used one of two models of a four-day work week: a four-day 32-hour work week or a 40-hour four-day work week.

However, data from Statistics Canada raises the question of how practical a shift would be, given labour shortages across the country.

“Ultimately, it depends on the individual employer to make the call—one that would have to take into consideration economic and labour conditions,” StatCan said in a 2023 report.

If employees were to work one less day a week, organizations may need to consider hiring more workers to ensure customer service is not negatively impacted, the report notes.

Improving Staff Morale

For non-profit Imagine Canada, keeping staff and seeing an improvement in employee mental, emotional, and physical health was a top benefit of the trial.

“Allowing employees to enjoy an additional day off has undeniably improved staff morale and well-being,” CEO Bruce MacDonald said in an online post.

Employees took fewer sick days, and the organization held a steady retention rate, he noted.

“One undeniable advantage of the 4-day work week is that it helps to retain and attract talent. No employee has left the organization since we started the pilot, and since we launched the trial,” he wrote.

He said a four-day work week comes with other challenges to manage.

“There are unique challenges, however, when implementing innovative initiatives in the nonprofit sector. There is often resistance to change and concerns about reactions from stakeholders - both understandable,” CEO Bruce MacDonald said.

One of the challenges was working with companies that do not have a four-day work week.

“The 4-day work week model is not universally accepted as a work practice. For us at Imagine, this translated into a reduced opportunity related to some anticipated funding as this new practice wasn’t in alignment with the vision of a particular funding prospect,” he wrote in the post.

Another obstacle was the need to adjust company goals to be more realistic.

“One of our goals going into the pilot was to adjust workload,” Mr. MacDonald wrote. “Before the trial, we consistently planned more output than our capacity actually allowed. This may still feel true at times, but we have made considerable, intentional efforts to have more realistic expectations.”

Imagine Canada has extended the trial into 2024 before they make a final decision on whether to return to a five-day work week or stay with four days.

Impact on Revenue

A study done in 2022 looked at nine Canadian companies that trialed a four-day work week to track the benefits and the drawbacks.

Employers who participated in the study rated it as 8.7 out of 10 when it came to attracting workers, but only 7.7 out of 10 when it came to productivity.

However, a Vancouver law firm that moved to a four-day week in 2021 said its seen revenues rise.

YLaw’s Leena Yousefi, told The Globe and Mail that her firm has doubled its net income, as well as its size, something she attributes to her team.

“They’re all players in this movement to achieve better mental health [and] better work-life balance. So, it wasn’t just me, it was my entire company,” she said.

Revenue increased by 15 percent for companies involved in the trial study.

StatCan also notes that costs could increase for some companies, as employees could work longer hours in a day, leading to possible overtime.

“Employers will often offer overtime to respond to increased demand for deliverables or to finish projects on time. Of the nearly 15.4 million employees at work across all sectors in July 2023, 15.5% worked some overtime,” StatCan said.

When it comes to productivity, statistics show that the number of hours Canadians have been working has been falling without impacting productivity.

“What we’ve seen in Canada over the past 25 years is a steady decline in this indicator of job quality. However, productivity has risen over this period,” StatCan said.

Average hours worked per job in Canada dropped from 1,840 in 1997 to 1,716 in 2022, the report noted, adding there was an annual growth rate in productivity over the same period of 1.2 percent.

Legal Implications

Companies looking to move to a four-day work week will need to carefully review labour laws in their province, according to experts.

“If this means employees are working longer hours during those four days, employers will need to be cognizant of the meal break and rest requirements in employment standards legislation, as well as daily overtime requirements [that] exist in some provinces,” Toronto lawyer David Fanjoy said in an October 2023 online post.

Employers will also need to determine if the switch means employees work longer hours, but fewer days.