IBEC thanks the Joint Committee on Enterprise, Trade and Employment for the opportunity to address the considerations of a campaign for a four-day working week. IBEC is Ireland's largest lobby and business representative group. Our purpose is to help to build a better, sustainable future by influencing, supporting and delivering for business success. IBEC engages with key stakeholders in Ireland and internationally and its positions are shaped by our diverse membership, which ranges from small to large and from domestic to multinational businesses. Our 39 trade associations cover a wide range of industry sectors and include financial services, food and drink, medtech, small firms, retail, property and biopharmachem, to mention just a few. IBEC represents members who employ over 70% of the private sector workforce in Ireland.
The accelerating pace of change in our workplaces has driven the adoption of new technologies and facilitated many new ways of working for our members. This era, described as the fourth industrial age, is bringing changes to the way we work, live and relate to one another due to the digital revolution. While it could be seen as an extension of the third industrial age, that of computerisation, it is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. This speed of change has been further fuelled by the events of the past 18 months. The experience of flexible, remote and hybrid working has grown significantly as a result of the Covid-19 pandemic, with many organisations now considering how they might incorporate the continued benefits of new work structures for the longer term.
The relaxation of the remaining Covid-19 restrictions announced by the Irish Government has employers engaging with the return to the workplace in a significant number of ways and with a significant number of employees who have been working remotely, some for up to 18 months. Many employers are putting in place for the first time formal remote and hybrid working policies where these are possible.
An IBEC survey of 370 organisations in May 2021 showed that of the employees working remotely at that time, 81% of IBEC members were planning for a hybrid working model, with 15% returning all employees to work fully on site and 4% of those working remotely to continue to do so fully after the relaxation of restrictions. Across all respondent organisations, three quarters expected the use of hybrid working to increase over the next two to three years, 70% saw a change in the training of managers in managing flexibility, 70% envisaged new ways of working to facilitate that flexibility and 45% foresaw an increase in flexibility on start and finish times over the next two to three years, post Covid. It is therefore very clear that the traditional working model is changing and that the four-day week or compressed work schedule model is one practice that may provide other opportunities for the right work-life balance for some organisations. Some members in IBEC have conducted successful trials in this area.
The Four Day Week Ireland website sets out that it seeks as its objective "to move towards the four day week being the standard work arrangement across the economy, with no loss of pay". It further states:
Strong management and clever rostering will need to ensure that businesses and public services can function for 5 or in some cases even 7 days, alongside a shorter working week for all workers.
There are a number of well-publicised successful pilots of four-day working weeks, in particular, as mentioned, that of Perpetual Guardian, in New Zealand, an estate planning firm, Microsoft Japan's 2019 trial and the trials in Iceland between 2015 and 2019 in which working hours were reduced to 35 hours a week without pay reduction for 2,500 employees. The latter covered about 1.3% of the country's population. All were declared successful on the basis of increased productivity, employee satisfaction and well-being, and reduced absenteeism. It is clear, therefore, that a four-day working week may suit some organisations and some ways of working.
However, the four-day working week does not suit all organisations. In the UK, the Wellcome Trust, the second biggest research donor foundation, abandoned its plans to implement a four-day work week in September 2019, with Ed Whiting, its director of policy and chief of staff, stating:
After extensive internal consultation on whether we should trial the four-day week, we have concluded that it is too operationally complex to implement.
A pilot in the city of Gothenburg, in Sweden, introduced a six-hour day for some nurses. The results of the two-year trial were encouraging, with the nurses becoming "healthier, happier and more energetic", but the costs were too high. For 68 nurses to change from eight-hour days to six-hour days on the same salary, 17 new workers were hired at a cost of €1.26 million. The cost was deemed simply too high and the pilot was abandoned as a result. The Microsoft trial in Japan, while promoted heavily in the media as having increased production by 40%, noted in its report under "lessons learned":
More issues must be considered and arranged before the four-day workweek can be implemented in Microsoft Japan. After new preparations have been laid out, implementation cannot be readily made. Thus, another experiment may not be as successful because some employees by nature may not be as patient as the others.
I understand that that trial has not been recommenced.
Will a four-day working week attract the same complexities and additional costs as the Wellcome Trust and city of Gothenburg experiences illustrated for some organisations? While the benefits highlighted by the pilot schemes include increased productivity, reduced stress and increased well-being, and a company's ability to attract and retain talent, there are increased costs and complexities for employers. It is not possible for all roles to be performed across four days only. In many circumstances the employer will have to recruit to cover for the fifth day in traditional five-day roles, in particular in service and professional industries. Roles that involve shift patterns that cover 24-hour days, seven days a week also see additional resources required to cover what is already budgeted and paid for in an employer's eyes.
Also, the Perpetual Guardian trial identified a number of challenges, for example, resourcing in some of the smaller teams. By way of illustration, there could be a team of three where an employee has to fit his or her own work into four days and provide cover for others who are not available as they are also compressing their working week.
The complexities that may arise in the educational sector, across early childcare services, primary, secondary and third level providers must also be considered as falling outside the ease of introducing a four-day working week. The introduction of a four-day week in such sectors would require an increase in headcount to cover service provision in that fifth day. It may not be possible to source the necessary skill set or to attract employees to cover one-day-only roles.
While the new resources required would increase employment, it sees increased costs for employers and complexities in its management while disruption for service users, clients, children and third level students is evident. The argument may be that the increased productivity would cover these additional costs and that it would be a win-win model for both employer and employee, but the reality is these complexities remain and some more so than others for certain industries and organisations. Certain roles cannot be compressed into four days without reducing the corresponding service offering to four days, which for many businesses, organisations, clients and service users is simply not feasible.
Many flexible working arrangements exist, and with the national remote working strategy committing to legislate to provide employees the right to request remote working, this will further galvanise the evolution of the remote and flexible working landscape. As a relatively new concept, the emerging evidence is mixed and for some organisations the complexity and cost of managing a four-day workforce over a five-day or seven-day working week has been and will continue to be prohibitive. In other organisations, flexibility is considered more broadly, with policies tailored to reflect the different types of flexible working requests that employees may need rather than a one-size-fits-all model.
Announcing the €150,000 research fund to launch a pilot scheme in Ireland in January 2022 to run parallel with several countries, including the United States, the United Kingdom and New Zealand, the Tánaiste, Deputy Varadkar, has said it is "too early to say" whether a four-day week could work in Ireland, but the idea is "ambitious".
IBEC would accept that the four-day working week holds many advantages for some organisations and sectors, and IBEC acknowledges the importance of innovative working models to continue to strive for better and more efficient workplaces, but it must be balanced in its approach and its application must benefit all parties to the arrangement. Organisations must be allowed to introduce flexible modes of working that suit the particular needs of their businesses. The imposition of a four-day working week on all organisations would be counterproductive to this aim.