Four-day work week requires caution and impact assessment for Australian small business

Trials of four-day work weeks have been taking place both in Australia and overseas with many organisations reporting various successes. However to date these trials have largely been taking place in organisations with 45 or more employees. [1]

Taking into consideration the inflationary impact of multiple types of new leave, plus a move to four-day work weeks on the economy, with no underlying tradeoff for productivity – small business calls for caution before further thoughts of a move to a four-day work week.

Matthew Addison, Chair of COSBOA seeks a vigilant approach in pursuing a four-day work week for five days’ pay.

How does a small business stay open if their retail shop has no available staff? How does that retailer earn sales on day five when it is shut?

How does the customer service centre provide coverage over all hours of operation when the staff only work four days per week?

How does a service business (hairdressing, consulting) continue to provide 38 hours of services if the employee is only working 30.5 hours?

Not every business can produce 38 hours of outcome in 30 hours. For instance, when customers expect a shop to be open and it is not, the customer will shop elsewhere. So many businesses are consumer driven, not process alone. Enhanced productivity expectations do not lead to five days of customers deciding to shop in four days.

Enhanced productivity cannot be the only factor considered.

Small business continues to suffer worker shortages and an inability to remain open or offer full service due to a lack of staff. The proposal to reduce hours means a further reduction in a business’ ability to earn income.

Inflation together with worker shortages are already driving demand for higher wages. A move in some industries towards five days’ pay for four days of work, would likely see all employees seeking similar arrangements. If this concept was to proceed, we would also likely see workers who have already been paid five days for four days’ work, offering to work the fifth day, on the proviso they would then be paid overtime for the extra day.

Further, we may also see employees choosing to move away from an industry that cannot offer four-day work weeks (for five days’ pay) e.g. Hospitality or Retail, to an industry that can. This additional disruption requires careful consideration before any implementation and subsequent management.

COSBOA calls for caution in pursuing a four-day work week; for an employer’s perspective and an impact assessment on small business to be brought into each recommendation of the recently released Select Committee Work and Care Final Report.

View the full Select Committee Work and Care Final Report HERE.

[i] https://www.sbs.com.au/news/article/the-worlds-biggest-four-day-workweek-trial-has-ended-and-the-findings-are-overwhelmingly-positive/z4samz5h5 - “Over 60 companies took part in the experiment, allowing almost 3,000 employees to work one day less per week while retaining the same salary.” https://www.abc.net.au/news/2023-02-23/four-day-working-week-trial-study-flexible-hours/102012464 - “About 2,900 workers were involved across the 61 participating companies.” https://www.theguardian.com/business/2022/jun/06/thousands-workers-worlds-biggest-trial-four-day-week - “More than 3,300 workers at 70 UK companies, ranging from a local chippy to large financial firms, start working a four-day week from Monday with no loss of pay in the world’s biggest trial of the new working pattern.”