December 16, 2019
One of Labour’s flagship policies for its 2019 general election campaign was to introduce a four-day week. More accurately, its policy is to introduce a 32-hour week. This brought flexible working again into the media spotlight. Research suggests that flexible working and reduced hours can have multiple benefits, including improved mental health and greater productivity.
Flexible working can relieve stress from new mothers and fathers. It can therefore help to keep parents in the workforce. It can make work possible for those with disabilities. Happier, less stressed employees require less sick leave and healthcare. They also have more time to do voluntary work and to care for relatives. The myriad benefits to society of reduced working hours are complex and difficult to calculate, but they could be enormous.
Recent research by Henley Business School suggests that a four-day working week could save UK businesses some £104 billion annually. The report surveyed businesses that had already adopted a four-day working week on full pay. It found that 64% of businesses noted improvements in productivity. Further, 78% said staff were happier, while 62% noted a reduction in sick leave. 63% of businesses said their four-day working week policy helped them attract and retain talent.
The most important effect of reduced working hours for families is an improvement in overall quality of life. All parents must take leave to care for children at some time or another. Yet most families cannot survive on the government allowance paid during parental leave. This means many employees can become severely overstretched, attempting to juggle caring responsibilities and a full-time job.
Thriving at work
The 2017 UK government report Thriving at Work: a review of mental health and employers revealed the impact of mental health in UK workplaces. The report found that 300,000 people with a long-term mental health problem lose their jobs each year. It also found that 15% of workers have symptoms of an existing mental health condition.
In many cases, the UK standards already exceed the EU directive’s minimums
As part of the report, the government commissioned Deloitte to estimate the costs of poor mental health. The annual cost to employers alone was estimated at between £33 and £42 billion. About half of this was estimated as being due to presenteeism, and resulting reduced productivity combined with increased stress, sick leave and staff turnover. Presenteeism was defined as “as showing up to work when one is ill, resulting in a loss of productivity and sometimes making an individual’s condition worse.” The phenomenon of presenteeism was found to be increasing. The cost of poor mental health to the economy as a whole was estimated as between £74 billion and £99 billion annually.
The EU directive 2019/1158 on work-life balance for parents and carers means that EU member states have until 2 August 2022 to implement the directive into national legislation. Whilst it seems that the UK will now implement Brexit, it is notable that most of the directive’s provisions already exist in UK law. In many cases, the UK standards already exceed the directive’s minimums. For example, the directive sets out an EU-wide minimum standard of at least 10 days of paternity leave, to be paid at the same level as sick pay. However, fathers in the UK already get two-weeks’ paid paternity leave. Indeed, there has been a discussion about introducing up to 12 weeks’ paternity leave for new fathers – with the first four weeks of this being paid at 90% of the normal salary.
On the other hand, the directive requires EU member states to give employees a right to five days carer’s leave each year. The UK does not mandate specific carer’s leave, although it does offer a right to request flexible working, as well as emergency time off for dependants leave and parental leave.
Here to stay
Overall, it is clear that the trend towards flexible working and reduced hours is here to stay. Ultimately, the demand for flexible working is coming from employees themselves, who increasingly prioritise wellbeing and quality of life.
Employers who embrace the trend towards flexible working and reduced hours will be able to attract and retain the best talent – often at a more completive salary. UK employers already have a legal duty to consider requests for flexible working. They also have a legal responsibility to protect the health, safety and welfare of their employees. Even as technologies such as AI and automation reduce the demand for workers in some areas, technology is also making it easier than ever to work from home.
Reduced hours and increased home working are an obvious solution, which can improve employees’ wellbeing while improving productivity and reducing the burden on the healthcare system. It can also reduce traffic congestion and consequently carbon emissions. It is clearly good government policy to incentivise employers to make meaningful moves in this direction.