[뉴스쉽] Will the company go bankrupt if I work 4 days a week? What the experiments for ‘Mon-Tue-Wed-Thu Toto’ say
Now, the five-day workweek system is taken for granted, but there was a time when people thought that the country would collapse if they took two days off a week. In the 90s, when I was the youngest office worker in my 20s, Saturday was my work day. Even on Saturdays, there were many cases where I couldn’t leave the company until dinner time.
It was in July 2004, two years after the excitement of the semifinals of the World Cup, that the five-day workweek system with the legal working hours of 40 hours per week was introduced in Korea. The five-day week system was introduced in stages depending on the size of the business, starting with public institutions. It was only applied to businesses with fewer than 20 employees in July 2011. The limitation of the maximum working hours, including overtime and holiday work, to 52 hours per week is relatively recent, as everyone knows, and there are a lot of aftereffects and controversies.
Ahead of the implementation of the five-day work week in 2004, controversy arose in Korean society at the time. It could be said that it was a worldview struggle between the payer and the payer. A sense of crisis that the company (or shop), the economy, and the country would collapse if they played like that existed between the payers and those who represented their interests. There was even a warning that it was against the will of God. God told us to work 6 days a week.
However, even at that time, there were many countries in the world that took two days off a week, and Korea also joined the trend. As a result, the country did not collapse. According to a 2017 study conducted by KDI, a national research institute, that analyzed data from 2004 to 2011, labor productivity (calculation of real added value per person) increased by 1.5% for manufacturers with 10 or more workers after the implementation of the five-day system. At that time, KDI suggested that the wage system be reorganized accordingly, stating that short, efficient work yields more results than inefficient long work.
17 years after the implementation of the five-day work week, there is an active discussion in our society about reducing the number of working days by one more day. Is it really possible? What were the results of the cases that were first implemented at home and abroad? What lessons can we learn from it?
Surprisingly old domestic 4-day week experiment
There are also companies in Korea that have established a four-day work week system. Enesty, a cosmetics manufacturing company located in Chungju, North Chungcheong Province, is mentioned as the company that succeeded in the four-day system for the first time and the longest. The company makes skin-improving cosmetics using Suanbo hot spring water. In 2010, it started with three female employees raising children, and for three years, 80% of the employees were piloted with a four-day week system. Since then, the problem has been corrected, and since 2013, it has been extended to all employees. All 30 employees work 38 hours a week. Sales in 2013 were 6 billion won, and 2016 sales were about 10 billion won.
Eduwill, a comprehensive education company, is probably a more well-known case among urban workers. In June 2019, a system called ‘Dream Day’ was introduced, with one more day off except weekends. It is a system that works 8 hours a day, 32 hours a week. Instead of taking a day off on Friday, they each have their own days off. If you choose a holiday well, you can only see the team leader three days a week.
In the start-up industry, where long, high-intensity work for growth was a culture, a four-day system or similar reduction in working hours is being expanded to retain and attract excellent talent. Game company ‘Endorphin Connect’ and reading platform company ‘Milli’s Library’ operate 4 days a week. Introduced the ‘4.5 days a week system’, where people go to work at 1pm. Viva Republica, which operates a complex fintech platform ‘Toss’, introduced the 4.5-day early leave system on Friday.
Among large companies, the SK Supex Council, the control tower of the SK Group, introduced a biweekly four-day workweek system. SK Telecom also designated the third Friday of every week as a holiday.
In this case, the four-day system was attempted in the hope of a positive effect, but in some cases, the four-day system had to be implemented for survival as sales plummeted due to COVID-19. Samsung C&T’s fashion division entered an emergency management system last year, such as closing the ‘Beanpole Sports’ brand, and worked four days a week from July to the end of the year. It was an ’emergency measure’ accompanied by a decrease in the number of employees, partial return of employee salaries, and some unpaid leave. The Shilla Hotel and Lotte Duty Free, which had had their sales hit hard due to COVID-19, also survived the crisis by freezing wages and applying flexible working hours 4 or 3 days a week.
It was Rep. Jo Jung-hoon Cho, who was in the Seoul mayor’s by-election this year, who brought the four-day week system into the arena of political public debate. However, at that time, the election was swept away in the mud of the so-called ‘ecological bath controversy’, and the discussion on the four-day system did not receive much momentum.
This time, the presidential candidate of the Justice Party, Sim Sang-jung, who is a political ‘named’, is pushing the four-day workweek as the ‘first promise’, and the socially telecommuting situation is spreading, so the repercussions are different.
What if I told you to take an extra day off and get less?
Here, let’s play a balance game. 1) I work as I do now and receive the same amount of salary as I am now. 2) Take another day off and receive 20% less. (There is a ‘Vote’ link at the bottom of the article, so please read it and participate for fun.)
Each person will give a different answer depending on their circumstances and values, but if you are not an employer, you will not like this question in itself. Fortunately for the employees, the four-day week system, which is currently being discussed in European countries, Japan, New Zealand, and Korea, assumes that wages do not decrease. To do that, you have to work a day less and get results so that the workplace doesn’t collapse…
Are the employees really just wanting to play? There is an often cited survey in this regard in the United States. Kronos, a HR management company, and Dan Schovel, an expert in working time efficiency, asked about 3,000 workers in eight countries (USA, UK, Australia, Canada, France, Germany, India and Mexico). If paid the same, how many days a week would you like to work?
0 days? It is said that only 4% of the respondents answered that way. The highest number of responses was 4 days (34%). 28% of respondents said they would work for 5 days like now.
In an interview with NPR on public radio in the United States, Schovel said: “This research is important because it shows that people want to work.”
4 days a week: What kind of job will it be and what kind of job will it be difficult?
In order to be able to work 4 days a week, they must have some confidence in their products or services. If you cannot persuade customers (individuals or companies) who are your counterparts in corporate activities, ‘the reason why we need to take an extra day off’, it is difficult to work 4 days a week. For example, it is difficult for small and medium-sized enterprises (SMEs) with “B” to implement a four-day system, which suffers from frequent whims and demands for delivery by large companies.
In the case of the aforementioned SK Supex Council, it is advantageous to introduce a four-day system as it acts like a control tower that encompasses each SK affiliate. However, since there is a lot of work itself, it is known that there are quite a few cases in which employees actually work more than four days. Government offices and public institutions are also advantageous because they are in a superior position to private companies. In 2004, when the five-day week (Saturday holiday) was introduced in Korea in stages, it started with public institutions.
Even a small company in a highly competitive industry can benefit from a four-day workweek if it is necessary to secure excellent talents with a ‘work-life balance’. Endorphin Connect, a game developer, is a start-up company that registered as a business in April of this year. In these days, when large IT companies that you know by name are scouring engineers with money, the ‘four-day workweek’ can be an attractive card that companies can offer instead of money.
It is very difficult to implement the four-day system without hiring additional personnel if a certain amount of customer service is required continuously in stores such as service or retail business, or if a certain amount of service or content production is required for each time period.
If a founder or CEO with strong charisma wields full control over management and leads growth or innovation, it can be difficult to even talk about a four-day system. Silicon Valley’s leading companies, such as Apple, Google, and Facebook, are famous for their intense work intensity even now that they are not startups, and there is no separate day and night. In 2018, Elon Musk, who is also called the real model of ‘Iron Man’, the founder of the electric car company Tesla, who gained the nickname ‘Chensla’ due to the recent stock price surge, said, “How do you change the world by working 40 hours a week!” said,
Jeff Bezos, who founded Amazon, grew into a giant, and is now pursuing space development, says the term ‘work-life balance’ itself is wrong.
If the head of the company has such a mindset, it is better to have the same dream and choose one of the two, whether to join growth and innovation or to leave quickly, than to wait for a four-day week with no promises.
If you take an extra day off, your performance will rise?…Cases at home and abroad
It is natural that the introduction of a four-day work week will reduce employee fatigue and increase satisfaction. The question is, will the results be the same even if you work less for a day? An attempt to switch to a four-day system is possible only when it is judged that it is possible.
Companies known as best practices for the four-day workweek in Korea are generally known for their good management performance and internal response. The sales of Enesty, a cosmetics manufacturing company in Chungju, were 8.3 billion won in 2013, but gradually increased after the implementation of the four-day week, exceeding 10 billion won in 2016. The sales of education company Eduwill increased from 81.5 billion won before the implementation of the four-day system to 119.3 billion won after the implementation.
An employee who appeared in a video on Eduwill’s official YouTube channel said that because of the four-day workweek, he became more focused and tried to get things done faster.
Iceland is a small Nordic island country with a population of 340,000 pursuing a welfare state model. Iceland conducted a four-day week experiment from 2015 to 2019. Although it is a small country, it is a national experiment anyway, so it is often referred to as ‘the world’s largest four-day-week experiment’.
It was held for about 2,500 people over 4 years led by the capital Reykjavik City Council and the central government. Various occupations in the public sector, including kindergarten teachers, hospital workers, office workers, and social workers, participated. Even if the work is less, public services must be maintained. To this end, the Icelandic government has spent £24.2 million annually to increase hiring, Wired Magazine’s UK edition reported. Thanks to the increase in the number of people, performance indicators such as the time it takes to resolve each complaint and the number of services provided did not fall or slightly increased.
Thanks to the favorable evaluation of the experimental results, more than 80% of Icelandic workers now have or have the right to reduce the number of working days. This is a good result for proponents of the four-day work week, but there were also a lot of responses that it was questionable whether it could be applied to other countries or private companies.
In August 2019, Microsoft Japan conducted an experiment on a four-day week with a break every Friday. This case was a well-known global company, and it made a big impact internationally by revealing its achievements in clear numbers. In an experimental project called ‘Work-Life Challenge Summer 2019’, Microsoft Japan announced that it achieved a productivity improvement of 40%. For example, the proportion of ‘smart meetings’ such as online increased by 21%. The use of printing paper decreased by a whopping 60% and electricity use by 23%. In August 2019, labor productivity (sales per employee) increased by 40%.
Some domestic media reported overly simplistically, saying, “When MS Japan worked 4 days a week, sales increased by 40% compared to the previous year.” But the party
The Japanese MS side was wary of over-interpretation. It is true that sales per employee increased by 40% compared to the previous year during the period, but it was not achieved by the 4-day experiment alone, but was realized by various factors. It was announced in its own news center.
For this reason, MS Japan conducted an additional 4-day system experiment, but did not advance to the full adoption of the 4-day system.
Reasons for results in the 4 day a week experiment
The reason why the work performance actually rises in companies that have introduced the four-day workweek as a pilot is that the employees work more concentrating despite the shorter hours.
New Zealand-based estate trust management company, Perpetual Guardian, has implemented a four-day work week since 2018, and is often reported to have seen a 20% increase in productivity. The reason for the company’s four-day workweek was an article in The Economist that caught the eye of founder Andrew Barnes. Office workers worked productively on average only two hours a day.
A similar survey was conducted in the UK in 2017. According to a study by discount shopping site Voucher Cloud.com, employees spend an hour and a half a day in the office writing and answering emails and two hours per day reading social media and online news. It was only 23 minutes.
‘In that case, wouldn’t it be better to focus on working and take another day off?’ With this in mind, Andrew Barnes introduced a four-day workweek to his company. In an interview with SHRM, a HR site, Barnes said, “When I did that, the employees themselves stopped wasting time and focused on their work. So, the results were better.”
How good would it be if an office worker who took two days off a week could take three days off? The notion that those benefits should not disappear serves as a strong motivator to work hard, and it should be.
If the 4 days a week experiment fails
However, during the pilot operation, there are cases where the company works well after working for only 4 days, but the performance gradually deteriorates. Slumber Yard, a mattress comparison search site in Las Vegas, USA, is a start-up with 12 employees, but is the number one company in the industry. In 2018, the company piloted a four-day workweek system for two months. Due to the company’s circumstances, it was not possible to reduce the working hours and hire more people, so the daily working hours were increased from 8 hours to 10 hours, and instead worked in the form of an additional day off. Still, the fact that they had one more day off made them excited, they worked very hard, and the results were good. “At first, everyone thought it was a home run,” company co-founder Matt Ross said in an interview with SHRM.
However, as time passed, the tensions of the employees began to ease. The time spent chatting or doing other things together increased, and consumption of various snacks provided by the company increased. Performance deteriorated, but when the cost of food increased to nearly $500 a month, the company could not bear it and returned to the original eight-hour, five-day workday.
The ‘Hawthorne effect’ may work, and results may be achieved only during the trial period.
The Hawthorne effect refers to a reaction that adjusts or acclimatizes one’s behavior to a ‘desirable direction’ when one recognizes that one’s behavior is being observed. In the case of a pilot implementation of a four-day workweek in a certain workplace, employees may work very hard at first for the ‘trial’ to be successful, but as the four-day system becomes a daily routine, over time, the employees may return to their usual level of concentration. Experts on the employer’s side argue that if the Hawthorne effect is dazzled by the pilot results, the company may suffer difficulties if it hastily implemented a four-day work week.
Do you all work hard when you go to work? – Time consumption of office workers
If you want to do what you used to do on 5 days in 4 days, you need to manage your time well. If so, why would employees waste their time? There is interesting content in a survey conducted by Kronos, a HR company, on 3,000 full-time (8 hours a day, 5 days a week) workers in eight countries (USA, UK, France, Germany, Canada, Australia, India, Mexico).
Forty-five percent of those surveyed said that five and a half hours would be sufficient to complete a day’s work if they were focused and uninterrupted. Thirty-seven percent of respondents said they were working overtime for one reason or another, even though in fact 40 hours a week was sufficient to get the job done.
86% of the respondents said that they waste time at work because of chores that have nothing to do with their job and do not help the organization’s performance. 41% of respondents said that they spend more than an hour a day with such chores.
When asked what is the biggest factor in wasting time at work, the most common answers were ‘going around with other people’s problems (22%)’, administrative chores (17%), unnecessary meetings (11%), and e-mails (11% – In Korea, you have to think about including ‘Kakao Talk’), and they were harassed by customers (11%).
It is said that this question showed different characteristics by generation. While 26% of the baby boomer generation answered ‘taking care of problems committed by others’, the highest response was ‘conflict between employees (9%)’ in the GenZ generation. Among millennials, social media (10%) cited social media as the biggest waste of time.
There are differences depending on the country, industry, company size, generation, etc., but in general, the situation is similar in any workplace. It suggests that enabling employees to focus on tasks that create significant value and reducing time-wasting factors are the most important preparations for a four-day work week.
Things to prepare to introduce a four-day week system
Companies that have well established the four-day work week have made various efforts to minimize the side effects. Enesty, a cosmetics manufacturer in Chungju, has successfully operated a four-day system for over 10 years and has grown in size, but it is said that it has not been established stably from the beginning. In the early stage of the four-day system, the working hours were extended by increasing the commute time to 8:30 a.m. and 6:30 p.m. Wages were also frozen for two years. Due to the nature of the small and medium-sized manufacturing industry, if employees use annual leave individually, work may be disrupted, so a joint annual leave (7 days), in which all employees use annual leave together, was introduced, allowing one more day off before and after the Lunar New Year or Chuseok holidays.
Eduwill hired more people. The number of Eduwill employees, which was 470 before the implementation of the four-day work week, has increased to the current level of 780. In January 2019, when the company announced the implementation of the four-day work week, it was reported that additional personnel were identified by department and actually hired more. A lot of effort was also put into rationalizing the work system, such as sharing who takes a break and when, the rest schedule and work progress, and reducing unnecessary chores.
MS Japan announced that the following points remained as tasks in the self-evaluation of the 4-day week experiment. If there is an organization thinking about the transition to a four-day system, these are the things to consider in advance.
A five-day work week is not a ‘law of nature’… History of reducing working hours
There are some people who worry that reducing working hours further will cause a lot of trouble, but the 40-hour five-day-week system is just one step in the evolution of working hours reduction. Since industrialization, working hours have steadily decreased, but the economy has never suffered as a result.
In fact, it was Henry Ford, an automobile tycoon, who provided the greatest opportunity to reduce working hours in industrial history. He believed that workers, who make up the majority of the population, had to have more time and money to buy more Ford cars, so he was a pioneer in reducing working hours and raising salaries.
Ford’s insight that an industry can grow only when the purchasing power of its customers grows has changed the course of the history of capitalism. Nearly 100 years later, this insight still holds true.
Until now, most of the fruits of productivity improvement due to technological advancement have been taken by companies or capital. In almost all countries, the increase in real wages for employees is far below the rate of growth of the firm or of the wealth of its major shareholders. The demand for a four-day work week means that people who work now also want to share their share a little more.
It is forbidden to enact hasty legislation…
However, even if the new system is good, its introduction should be done with caution. The economic policies of this government have already shown that otherwise the reality will be unreasonable. If the four-day week system is consumed as a popular political commodity and becomes a rigid system, if it is prematurely enacted,
Outsourced working hours tophenomenon will become more severe. The polarization between the working class may deepen. There is also a problem that more companies can participate only when the wage system is adjusted in such a way that compensation is based on performance rather than hours worked.
Looking at the overseas discussions, there is a discussion about incentives for switching to a four-day system, not about how to punish companies that do not have a four-day system. Even within the workplace that chose the four-day system, most of them were allowed to select ‘only available departments or those who wanted to’, and those who did not choose the four-day-week plan were often offered other options, such as expanding telecommuting or flexible commuting.
This is important. If it is difficult for a domestic company to reduce the number of working days, it is to increase the flexibility and autonomy of the employees. In the process, the company will be able to achieve results such as rationalization and efficiency of business processes.
(Composition: Senior Correspondent Lee Hyun-sik, Reporter Jang Seon-i, Kim Hwi-ran Editor / Designer: Myung Ha-eun, Park Jeong-ha)