The Four Day Week: The Answer to the UK’s Productivity Slump?

Ask most economists what they make of productivity in the UK and you’re likely to provoke a groan or a shrug of the shoulders.

That’s because the UK’s productivity has been struggling for a while now – ever since the 2008 Global Financial Crisis which wrecked productivity in many economies across the world. 15 years on, most western countries seem to have recovered from the impact of the Great Recession on their GDP, productivity and economic output.

The UK is a strange case though. Productivity has remained stagnant, and growth, anemic, at best. As a result, many economists and academics are scratching their heads at the possible causes – and solutions.

One potential solution that’s been raised to this productivity conundrum is the four-day week, but could it really have the potential to enhance the UK’s economic output? We explore some of the pros and cons of the four-day week, and whether it could be the answer to the UK’s productivity slump, in this article.

Reasons for the UK’s productivity gap

So, before we can determine if the four-day week has the potential to resolve the UK’s historic productivity challenges, we should look a little more closely at the reasons behind them.

The productivity gap doesn’t really have one unique cause (although some causes likely have more impact than others). It’s created by a series of interlocking, closely related issues that affect each other in complex ways. As a result, things that at first look don’t seem particularly relevant to productivity can end up having playing an outsize impact on the puzzle.

Economists are divided about the exact causes behind the productivity gap but some reasons that have been cited include things like:

Chronic underinvestment

The London School of Economics explores some of the key theories behind the UK’s sluggish productivity performance in an article on its blog.

The ‘Cracking the productivity code: An international comparison of UK productivity’ report published by the London School of Economics’s Programme on Innovation and Diffusion (POID), has some fascinating analysis and conclusions about the reasons behind Britain’s productivity problem.

The authors, John Van Reenen and Xuyi Yang, argue that an international slowdown in productivity happened after the 2008 Global Financial Crisis. This affected every country in the world but the UK suffered a much larger and more damaging reduction in productivity than others. The report argues that this could be due, in part, to the UK cutting back on investment and skills in the economy more than compared with other countries, in the aftermath of the crash.

Their analysis ultimately suggests that had UK productivity followed its pre-crisis track in terms of productivity, it would be around a quarter higher today – a startling assertion.

Chronic skills shortages

Research suggests that skills shortages are a key cause of productivity problems in many organisations. We’ve explored this topic, and examined how skills shortages are affecting the UK economy more broadly, in a number of other blogs, particularly in this infographic.

To recap, the UK is currently in the grip of a growing skills-shortage that has the potential to escalate in the long-term, as more skilled workers retire and new technologies start to filter into the workplace.

A report by the Learning and Work Institute  identifies that by 2030 in England alone, there’s likely to be a shortage of around 2.5 million workers with in-demand, high-level skills and an excess of 3.1 million workers with low to intermediate-level skills. This mismatch has the potential to cost the English economy alone upwards of £120 billion in lost economic output and productivity.

Pros of a four day week

On the face of it, it might seem that arguments like those above ultimately suggest that the underlying cause of the UK’s productivity slump is unrelated to anything that the four day week could solve. After all, we’ve spent a few paragraphs telling you that the reasons behind the productivity slump are potentially related to underinvestment in the economy, right? Not underinvestment in the four day week?

In fact, the lack of investment in the economy is actually the key reason why the four day week could help to enhance productivity. That’s because, arguably, the four day week could tackle an area that’s often a perennially afterthought in the workplace – the people in your organisation.

The theory goes that by making the working experience of employees less stressful, more enjoyable and more flexible – achieved through the introduction of a four-day week – productivity could rise overall.

 Adding a four-day week to your organisation’s working practices could help improve a whole number of other areas that impact productivity too. Here are a few of the main productivity-focused benefits that could potentially come with a reduction in weekly working hours:

It could reduce employee absences

Studies by the Office for National Statistics (ONS) have shown that 185.6 million working days are lost to employee absences each year, making it a serious issue for companies that are trying to improve their productivity and output.

Could the four-day working week be a possible solution to these issues? Research from the Henley Business School suggests it could be. One of their studies found that implementing the four-day week could help employers reduce absence in the workplace with employees reporting better mental and physical health when a four-day week was introduced. Staff absenteeism had reduced as a result by the end of the study.

The logic behind this improvement is that a four-day week reduces the impact of burnout and gives employees more time to seek medical help for any issues that they might be experiencing in their lives, without fear of being penalised, or falling behind on work, because of it.

It could improve employee mental health and retention

During 2022 to 2023, the University of Cambridge carried out one of the world’s largest studies of the four-day week to date, looking at its effects on a range of areas relating to the workplace.

At the end of the study, they found that levels of anxiety, tiredness and sleep problems had decreased whilst mental and physical health had improved. In total, 39% of employees felt less stress and 71% felt that they had a reduced burnout at the end of the trial.

The same study found that employee retention improved too with the introduction of a four-day week, with the amount of staff leaving the organisation reducing by 57% over the time of the research.

With poor employee mental and physical health contributing to a significant drop in productivity 

It could improve productivity

Ultimately, by improving all of the things that we’ve listed above, the four day week could have the potential to lift productivity figures too. Employee absences, poor mental health and terrible retention can all have significant impacts on the productivity of an organisation.

With evidence suggesting that the four-day week has the potential to mitigate some of the worst effects of employee poor mental health, poor retention and absenteeism, it’s clear that this could have a corresponding boost on productivity. After all, if you reduce the negative impact of some of the areas that bring productivity down, it’s logical to assume that productivity should improve.

This is backed up by real-world studies. The same Henley Business School research we mentioned above found that around 64% of employers reported better productivity and better quality of work after implementing flexible working policies, like the four-day week.

Cons of a four day week

Unfortunately, the four day week isn’t without its negatives. Here are some of the most commonly cited concerns from individuals and organisations:

It could increase costs

As the British Business Bank explores, one of the main ways that the four-day week could end up costing your organisation money is if you find that work starts to pile up once employees take an extra day off every week and you need to expend more resources, like paying overtime or hiring external staff, to get it done.

It could reduce productivity

One of the key arguments against the introduction of the four day week is the impact that it could have on productivity. After all, it doesn’t take Einstein to work out that a four day week involves working one less day in a week. Logically, that means that you might experience a reduction in your overall weekly output, reflecting that lost day.

Whilst any reduction in productivity should probably be weighed against the increase in other areas that you might expect to see from the introduction of a four day week, like a rise in employee morale, many employers will probably tremble at the thought of losing four days of output, per worker, per month.

It could reduce wages

One of the thorniest issues when it comes to the four-day working week is that of pay. How much should an employee be paid for the four-day week? Should they continue to be paid for five day’s worth of work, or should they only be paid for four day’s work?

Debate around this topic is hotly contested. Most trials so far have kept pay the same and best practice suggests that employees shouldn’t be economically penalised for working a four-day week. The logic goes that reducing pay will ultimately cause more harm to productivity.

There’s always the risk that, if the four-day week becomes widespread, some employers could reduce the amount that employees are paid, to compensate for what they view as lost working hours.

How can organisations make the four-day week successful?

The atttitudes of an organisation’s leadership team will play a large part in determining how successful a four-day week is in your workplace. A leadership team that doesn’t really understand a four-day work week, or that, worse, is actively hostile to one can end up inadvertently sabotaging the success of any scheme.

As a result, if you’re serious about trialing a four-day week in your organisation, you’ll need to carry out some prior work to get them on side. The best way that you can do that is by pointing towards the existing evidence from prior research that suggest that the four-day week can improve productivity, rather than hampering it.

We hope this blog has helped provide some of those points and given you a better understanding of the pros and cons of the four-day week when it comes to productivity, that can better inform your own approach to any trials that you implement.

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