Done Well, 4-day Week Could Boost Productivity, Employee Happiness

The idea of the four-day workweek has been tossed around increasingly in the past few years. Working fewer hours, the arrangement’s advocates argue, is not about working less but engaging in more efficient and productive deep work. But how did our five-day, eight-hour work pattern evolve?

“In 1926, Henry Ford introduced the 40-hour workweek for the employees of Ford Motor Company. He aimed to increase the workers’ efficiency, give them more time to rest, spend time with their families, and engage in leisure activities, making them more satisfied with their work,” Tamás Jagodics, CEO of Cégmenedzser, the developer of an enterprise resource planning (ERP) software, tells the Budapest Business Journal.

Together with the assembly line launched in 1913, the five-day, 40-hour workweek increased productivity tenfold for Ford. It reduced production time and costs. At the same time, it made Ford’s workplace more attractive to workers and left a lasting impression on how we work today, a century later.

However, there is change on the horizon. The four-day workweek has become a go-to canteen conversation for employees internationally. It allows workers to spend more free time with their families, friends and hobbies.

“In Sweden and Denmark, six-hour workdays are already common in certain sectors and companies. While labor models can vary by country and industry, there is a general trend of placing increasing emphasis on workers’ quality of life and maintaining a work-life balance,” Jagodics explains.

Such arrangements are not only well-liked by workers but provide businesses offering them with competitive advantages in the labor market and increase economic efficiency.

Growing Feedback

“There is growing feedback that shorter workweeks or consideration for employee well-being benefits not only employees but also companies. Satisfied employees perform better, are less prone to sickness, and are more loyal, which gives companies a competitive edge,” Jagodics adds.

Like its peers across the continent, the Hungarian labor market is a cut-throat environment. Competition is fierce. With scarce specialized talent and many open positions, a company’s employer brand is a crucial factor in winning over prospects who may have more than one employment offer on the table. The four-day workweek will attract staff, who can work equally effectively on fewer hours at maintained productivity if companies properly automate and optimize processes.

Another tempting factor is the possibility of working remotely. Hybrid working arrangements have become a decisive factor for employees, and even the most reluctant companies are adjusting to the needs of the market. Cégmenedzser recently conducted an online survey of 300 small and medium-sized business leaders, among whom the four-day workweek emerged as an important pillar.

About one-third of Hungarian entrepreneurs are considering experimenting with or implementing a four-day work week, the Cégmenedzser survey has found. However, only companies with controllable processes may be able to introduce such a working arrangement effectively.

Pundits opine that if working conditions are good and a company’s operations are sufficiently digitalized and automated, employees can complete the same amount of work in four days that previously required five.

“Unfortunately, the SME sector lags significantly behind large companies in terms of digitalization, which could provide momentum for catching up. In summary, if a four-day work week were introduced in Hungary, it could make Hungarians happier and allow them to spend more time with their families and hobbies, but few Hungarian companies are currently ready for it. The solution lies in optimizing and automating with software support,” Jagodics says.

Hesitant Approach

The Cégmenedzser survey found that manufacturing companies are hesitant to adopt this work schedule.

“Primarily because I believe it is a company’s strategic issue. It is difficult to imagine that healthcare providers, waste management companies, or bakers would only work four days a week,” Jagodics adds. Recruiting additional talent for the spare days would enable the introduction of a four-day workweek in this industry, but that would bite into the financial bottom line and assumes you could find the necessary staff.

“However, even in these companies, efficiency can be increased, and stress can be reduced if there is ‘order’ in the company, that is, optimization and automation through controlled processes and enterprise management systems,” Jagodics says.

Could a four-day workweek be on the cards for Hungary? Some companies have completed experiments, and some reports have shown benefits for employees and employers in these cases.

Magyar Telekom, the local unit of German telco giant Deutsche Telekom, launched a four-day workweek pilot project last year. Four teams adopted the arrangement for four months, receiving the same salary. MTel found the pilot so successful that the telco vowed to expand the test to more employees by August 2023.

But further research and pilots are likely to be necessary before Hungary is prepared to roll out a four-day workweek for everyone.

“However, if large companies take steps in this direction, small and medium-sized businesses must adapt to the new conditions. The wider adoption of artificial intelligence (AI) solutions and the increased digitalization of businesses could significantly assist in implementing a four-day work week, as these measures can significantly shorten work processes,” Jagodics concludes.

This article was first published in the Budapest Business Journal print issue of March 24, 2023.