As a business owner, it’s important to embrace innovation in your industry. Be it the adoption of technology or a hybrid working model post-Covid, your company will have undergone some changes in the past four years.

One new working model that several businesses around the world are trying out is the four-day workweek. The first official four-day workweek trials were largely funded by 4 Day Week Global, an organisation devoted to promoting this working model, in 2022.

In its pilot programs (among others around the world), government bodies, non-profit organisations, and for-profit businesses tried out the four-day week for a six-month period, without reducing pay for any employee.

While many of the four-day workweek trials have been successful, it’s important to assess the pros and cons of trying out this model before you do so in your own business. With fiscal targets and employee productivity still at the heart of your operation, you may have questions about how this working model could affect these elements on a long-term basis.

So, here are five data-driven pros and cons of adopting the four-day workweek.

3 pros of adopting the four-day workweek

One study of 61 businesses, conducted by the University of Cambridge, produced very positive results. Amazingly, after the trial was over, 92% of participating businesses said they wanted to continue the model, with 18 companies making the four-day week permanent.

Here are three of the reasons they gave for doing so.

1. Lower levels of burnout

The University of Cambridge pilot program showed that employee burnout was reduced dramatically.

71% of participating employees self-reported lower levels of burnout, and 39% said they were less stressed. What’s more, employers reported a 65% reduction in sick days.

We’ve written before about the effects of burnout on business owners, and the negative effects it could have over the long term. So, according to the findings of this study, fewer working days could reduce the effect of stress and burnout in your business.

2. Better staff retention

On top of fewer sick days and less burnout for employees, employers trialling the four-day week said that there was a 57% fall in the number of employees leaving the company altogether compared to before the trial started.

You may have experienced the stress and expense involved in constantly recruiting new employees in the past. Retaining talent for longer could help you build a solid team and work more cost-effectively.

3. A small increase in revenue

23 participating companies were able to provide financial data for the study, and the results were conclusive: the four-day workweek contributed to a 1.4% average increase in revenue.

Of course, this does not mean your business is guaranteed to see fiscal improvements from a four-day workweek, but it is worth knowing that these companies did not suffer financially from this working model. Improved employee productivity, fewer absences, and better retention may all have contributed towards improved financial performance across the board.

2 possible cons of the four-day workweek

While preliminary studies of the four-day week have been overwhelmingly positive, with many participants saying they would make the model permanent, that does not mean there aren’t cons to consider.

Let’s look at two potential negatives of adopting the four-day workweek.

1. Employees could feel pressured to complete work more quickly

If you were to compress your 40-hour week into just 32 hours, the workload would remain the same – you’d just have less time in which to do it. While pilot program participants did not report this as an issue, it could be worth considering how your team would cope with decreasing their hours in this way.

Only you know your employees well enough to judge their ability to perform the same tasks in a shorter time frame – and it is important to note that the four-day week studies did report an increase in efficiency with a dip in timewasting activities.

Nevertheless, discussing a potential increase in pressure on employees could be a helpful move if you are considering adopting a four-day workweek.

2. The model may not suit your industry or customers

Not all businesses are suited to a four-day workweek. If you run a hospitality business, or another form of hands-on service, reducing your opening times to just four days could have a significant financial impact.

So, while the results of the four-day week trials have been extremely positive, it is important to consider your unique circumstances and make a decision based on the needs of your employees, customers, and financial circumstances.

Get in touch to work with financial planners and push your personal wealth to its full potential

Whether you’re adopting a new working model, expanding your team, or looking for new customers, being a business owner can be all-consuming. As such, your personal finances might often end up on the back burner.

Working with a financial planner could help your personal finances work harder for you, without increasing your workload or stress levels. Here at iQ Financial, we specialise in serving hard-working business owners who wish to pursue clear, ambitious personal finance goals.

To get started, email us at clients@iqf.ie, or call 353 71 915 5560.

Please note

This article is for information only. It does not constitute advice.

It describes financial planning services that iQ Financial can offer to you. Financial planning services are not regulated by the Central Bank of Ireland.