Four-day working week may become permanent for Kiwi company

Newstalk ZB Staff ; Damien Venuto, NZ Herald,
Publish Date
Wed, 18 Jul 2018, 7:55AM
The company has been trialling it for the last few months. (Photo / 123RF)

Four-day working week may become permanent for Kiwi company

Newstalk ZB Staff ; Damien Venuto, NZ Herald,
Publish Date
Wed, 18 Jul 2018, 7:55AM


The Kiwi boss that trialled giving his staff a full salary for four days' work says it was a success and that he wants it to become permanent at his Auckland company.

Andrew Barnes, the chief executive at Perpetual Guardian, says he's already made a recommendation to his board to take the policy beyond the initial eight –week trial.

"The next thing is that I need to get the board to approve the recommendations in the next few weeks," Barnes told the Herald.

During March and April, Perpetual Guardian conducted what was essentially a corporate experiment in allowing the company's 240-person staff to retain full pay as well as a three-day weekend.

To ensure an objective analysis, Barnes invited academic researchers Jarrod Harr, a professor of human resource management at AUT, Dr Helen Delaney, a senior lecturer at the University of Auckland Business School, into the building to observe the impact of the trial on the workforce.

From the outset, there was always the risk that reducing work hours would increase the stress on staff to achieve objectives while also leading to lower levels output as working time was cut by a fifth.

But, as the trial rolled on, the researchers found quite the opposite to occur. 

"What we've seen is a massive increase in engagement and staff satisfaction about the work they do, a massive increase in staff intention to continue to work with the company and we've seen no drop in productivity," says Barnes.

The issue productivity is particularly pertinent because businesses pay their staff for what they produce – and with a reduction of time comes the risk of reducing the output.

Barnes says that the trial shows that the reduced hours, in fact, had no impact on staff fulfilling their weekly tasks. 

"Our leadership team reported that there was broadly no change in company outputs pre and during the trial. They perceived no reduction in job performance and the survey data showed a marginal increase across most teams," Barnes says.

Barnes believes this is important in starting a broader conversation across the New Zealand workforce, particularly in light of the OECD's two-yearly review of the economy showing that New Zealand lags well below leading countries in terms of productivity.

While the headlines accompanying the trial all focused on the number of days staff at Perpetual Guardian were working, Barnes says this really isn't the point of the study.

"We're paying for productivity," he says. "We're making a clear distinction here between the amount of hours you spend in the office and what we get out of that."

Barnes says this is relevant for the issues well beyond Perpetual Guardian, pointing out that a focus on productivity rather than the number of hours worked could help to address the problem of gender inequality in the workplace.

He argues that if a new mother or father, for instance, could fulfil their workplace obligations in reduced hours, then there's no reason why she shouldn't be given a full salary.

"If you can have parents spending more time with their children, how is that a bad thing?"

However, rolling out this theory in the real world isn't without its challenges and Barnes notes there may be a few speedbumps along the way as Perpetual Guardian looks to apply the initiative on an indefinite basis.

"It's one thing to do a trial. It's another thing to do it permanently and there are some problems around the way our employment legislation is constructed, but we think we've found a way around that," Barnes says.

He explains that employment law – from the legislation through to the payroll system – is still largely based on the number of days and hours worked, with vacation accrued according to the amount of time spent in the office, and there are legal concerns when it comes to challenging this status quo.

"Employment law is rightly about protecting the rights of workers and people are worried that if you start changing the dynamics of a working week that might lead to people having to do more in less time and that it could lead to job losses," Barnes says.

"We have to do a little bit of detailed work to ensure that we can comply with employment legislation when we bring this type of four-day week process into the mainstream and make it permanent.

On this topic, Barnes says there's a strong argument to be made that legal framework within New Zealand needs to catch up with the increased demand for flexibility in the workforce if initiatives such as are to prove successful.

That, however, is another fight for another day. For now, he's just focused on getting the board at Perpetual Guardian to give his ambitious scheme the go-ahead.