British economist, John Maynard Keynes, predicted in 1930 that successive generations would enjoy more free time than his generation could possibly imagine. Even the basic concept of the weekend – brought about by the gruelling working conditions of the Industrial Revolution – was relatively new to the UK when Keynes was born.

Today, thanks to increasing levels of automation, and a greater focus on employee wellbeing, Keynes’ prediction has come true – but the gradual reduction of working hours continues.

When the dust settled after the Great War, the International Labour Organisation used its first convention to limit working hours to eight a day and 48 a week – thus establishing the standard model we all operate under today.

By 2019, Jeremy Corbyn had included in Labour’s manifesto a 32-hour work week proposal – with zero impact on pay. While Labour never had a chance to implement the manifesto, the idea of a four-day work week was given impetus by the pandemic-induced paradigm shift in the way we work.

Today, amid the ‘Great Resignation’, more firms are taking seriously the evident benefits of a four-day work week, which include a reduction in employers’ costs, as well as increased productivity, employee satisfaction, and staff retention. In January 2022 – following the example of Spain, Iceland, Scotland, Ireland, New Zealand, Japan, UAE, and Belgium – the UK launched a six-month, four-day work week trial, via 30 employers.

Interestingly, Atom Bank is one of the few financial services firms on the list. With the project sitting at the halfway mark, and a 500% surge in job applicants to the bank, Finextra caught up with Anne-Marie Lister, chief people officer, Atom Bank, to understand how things are progressing.

The challenge for banks

Lister told Finextra the trial is going well: “We have been monitoring departmental, organisational and employee feedback monthly. They are all trending positively and we are taking a deeper dive into some areas of feedback to really understand the drivers and what continues to influence some of those measures.”

It is not all plain sailing, though: “There are challenges in terms of how we work and align our working practices to continue to find efficiencies,” said Lister. “It, of course, is a work in progress and we knew it wouldn’t be an overnight shift in terms of finding efficiencies. But the metrics are telling us that the benefits are outweighing the challenges, at the moment.”

The wider financial sector is watching Atom Bank’s progress closely. In many ways, the transition to a four-day work week is toughest for such a highly regulated industry, depending heavily on international communications and business with overseas clients. Indeed, if the majority of other countries do not transition, there could be a danger that corporates simply jump ship to banks that still offer the five-days-a-week service.

And what of the global markets, such as currency, which is worth $6.6 trillion? How will the UK retain its top share with a workforce that is online 20% less than the US or China? Might Britain’s standing as a global financial hub be at risk? These questions are yet to be resolved.

Managing director of Matrix Recruitment, Kieran McKeown, commented: “For many businesses, it might not be possible to simply cease operating on a Friday. If the business operates in certain industries…it cannot decide to close its door one extra day a week without significant consequences, including the loss of business or custom to a competitor.”

Business models > industry

Of course, this is also a matter of business models. As a retail bank, Atom Bank may have fewer concerns in this area than the average corporate-facing institution.

“From a business-to-consumer standpoint,” said Lister, “customers wouldn’t be adversely affected by a four-day work week. With advancing technology and the advent of e-commerce, the days of requiring an ‘always available’ bank manager are over. But, from a business-to-business perspective, those that make themselves unavailable would inevitably lose out to competitors who maintain five-day availability.”

Lister added that Atom Bank is “structured like any other organisation, with a service window for customers on the phone from 8am – 8pm. For this reason, we are no different from any other company. In fact, our 24/7 coverage from a technology and service perspective means that perhaps we have more to consider than some other 9-5 organisations. We are an incredibly lean team, and our business model is centred around efficiency and low overheads, so we are therefore unlikely to grow in employee numbers vastly, instead focusing on automation of services. Small teams and specialist individual roles can pose a challenge in four-day week however, not in an insurmountable way.”

According to Atom Bank, then, all firms could potentially benefit from four-day week, irrespective of the sector. What matters most is the nature of the business model.

For the firms that can make the 32-hour week work, productivity and efficiency wins can be expected, as well as an uplift in employee wellbeing. This is continually proven to be the case. According to The Guardian, a New Zealand firm that tested the four-day week model concluded that 78% of employees could more effectively balance their work and home life. This compared to 54% prior to the experiment.

Organisations that operate with a low level of trust and a high need for control may not like these facts. They must look at this new paradigm as an output/outcome-based philosophy, under which managers within the business are experts at creating efficiencies, by diverting teams away from low-value activities that have little impact on the bottom line.

The drawbacks

By now, the potential benefits of the four-day work week have been firmly established. Spoken of less often are the pitfalls.

“Of 26 key metrics, the two we have seen a decline in are around processing activities and processing times,” explained Lister. Yet, “neither led to any detrimental impact for our customers or business – more so the pace at which we were able to deliver internally.”

Naturally, any firm that trials a four-day week will have their own measures, since productivity is particular to each business, in terms of what it is delivering to customers and the service it wants to provide.  

Not all employers have seen results like Atom Bank.  According to the BBC, Science research foundation, Wellcome Trust, abandoned its plans to test a four-day week in 2019, finding that it would be too “operationally complex”.

But the pushback hasn’t just come from employers. Some employees are yet to be convinced. According to a recent workplace equality report form Matrix Recruitment, 15% of respondents were not in favour of a four-day working week, while over one-third shared concerns that the policy would result in a longer working day.

“The reality is that a four-day week could lead to longer stints or shifts – we’re talking up to ten hours – which could have a big impact on employee stress levels and therefore their overall wellbeing and productivity,” observed McKeown.

Notably, Atom Bank has not yet experienced the downturn described: “We have seen quite the opposite, in that people have worked hard to find efficiencies in how they work,” Lister said. “People are finding the tasks and activities that are ‘time wasting’ or offer low value to the business and to themselves and are being proactive in managing them. There is incredible value to be found in just doing this, but there is also so much to be found when you start analysing the value-add activities.”  

A nuanced approach

Another consideration is the impact on employees that are already working on a part-time basis. “This is where it can get even more complicated,” commented McKeown. “If you have an employee already working a four-day week, the chances are they are being paid on a pro-rata basis. Now, what if the full-time employees move to a four-day week on 100% pay, how will that impact the part-time staff? Do they switch to a shorter week still? Will their salary be adjusted in line with their colleagues?”

Clearly, this is another factor worth considering, as any change must be a fair outcome for all.

McKeown advises business owners to keep an open mind and appreciate the impact of each scenario on the business – both good and bad. “There’s no right or wrong answer and the jury is still out on whether society will benefit from a four-day working week,” he conceded. “Whatever the decision, it has to be right for the business and its operations and the benefits must be tangible.”

Of course, there also needs to be the option of a return to the traditional five-day work week, for any financial firms that find their trials ineffective.

“As a regulated business there have been non-negotiables for us in how we’ve managed the trial, meaning if we’d seen any material detrimental impact to customer experience or service, our regulatory duties or any aspect of compliance, this would be a reason to not continue, if we couldn’t overcome the challenge,” stated Lister.

Start with a yes and work backwards

The promise of a flexible work week is a magnet for talent. It both attracts and retains employees in an unparalleled manner – particularly given the fact that it is, for now, a scarce perk. 

The example of Atom Bank proves that, at the very least, financial services firms can continue to deliver on key performance metrics with a timetable reduced by 20%.

Whether this model can be rolled out across the entire financial sector, and all kinds of banking institutions, is less of a certainty. For this to be achieved, further regulatory pushes may be required. This will become more likely as more countries jump onto the 32-hour model. Without everyone’s buy in, however, gaps in the market will be filled by competitors.   

So, just how likely is it that a four-day work week will be implemented in the UK?

“Highly likely, I hope,” said Lister. “It won’t happen tomorrow but I’m sure this is the model we need to work towards. Planning, preparation, resource allocation and risk mitigation are essential. How many companies make it to this stage, before ruling it out? My view is start with a yes and work backwards – the benefits are clear to see so perhaps more organisations just need to face that fear and do it any way.”

For this to go ahead nationally, “success must be seen in the performance of businesses, with solid metrics around productivity and increased business performance,” continued Lister. “Organisations that are seen to be valuing the success of their business as much as their people will win. This may be the tipping point as people understand that working structure can change and can in fact make their business more appealing.”

In the meantime, we will need to see more positive UK-specific case studies on how the four-day work week benefits all stakeholders.