Is a 4-day workweek viable option for start-ups?

Until now, implementing a 4-day work week was just a wishful aspect for employees and the company. After the pandemic, great resignation followed. Employees quitting firms for better pay, benefits, and work-from-home facilities shoot up. To test the viability of a 4-day week, many start-ups researched and implemented the policy tentatively.

According to EU-startups research, “In 2022, the largest-ever trial of 4-day a week kicked off in the UK. With 56 companies deciding to keep the policy in place while 18 decided to make it a permanent part of the curriculum”.  

The basic strategy to move from 40 to 32 hours a week was to grant employees the much-needed flexibility, comfort, and opportunity to balance personal lives. In this essence, the employees work for the same pay and same benefits but for limited hours. It significantly reduced stress in the workplace and improved employee retention.

However, startups find it challenging to incorporate a 4-day week due to constant struggles and the need to grow. In this situation, will it be a feasible option? Can Startups keep up with their efforts to retain customers, get new ones, and retain the shareholder’s expectations along with cutting working hours?

As per many similar pieces of evidence like the one mentioned above, there are some possibilities. It just takes a few considerations, planning, setting goals, and implementations.

What does a 4-day workweek look like?

The concept is simple. Employees work 4 days instead of 5-6 days a week without any income reduction. Some firms extend the working hours to implement the policy. For example, instead of working for 8 hours, the employees dedicated 10 hours- a day to the firm. It means the actual length of the working week remains the same with the flexibility of a longer break.

Employers hold full-time operations by working 32 hours instead of 40 hours a week. Initially, the 4-day week seems no more than an illusion for most startups. Most businesses believe it would drop productivity instead of improving it.

 Apart from that, another concern is the implementation costs. From ideation to planning and execution requires sufficient capital. For example, the business might need additional staff, which could prove costly.

The companies would have less time to train new employees and thus have to spend on online and offline training sessions. It may impact the cash reserve for new operations and may lead to salary deductions. It would not be ideal for any startup as it may witness mass resignations amid slashed salaries.

Instead, a company can contact business finance brokers in the UK for quick cash assistance with personalised lenders. Brokers help by understanding the business’s situation and connecting with the most suitable lender. It can help you cover the additional costs without affecting employees’ pay.

On the other hand, it is favourable for workers to work for fewer hours and receive the same salaries. An extra day would help reduce extensive overworking. It would help reduce sick leaves and attract potential job-seekers.

What are some PROS and CONS of a 4-day workweek?

As per Independent Research Organisation Autonomy, “An average worker with a child can cut around £1440 per year on child care. They can cut £340/ day on average on travel or commuting.” However, there are ample benefits to introducing a 4-day week; one cannot ignore the drawbacks. Check some pros and cons of a 4-day workweek.

Grants more time to employees to spend on priorities like child education, travelling, and managing householdIncreased pressure on staff to do more work within the limited time frame
Employees retention increasesMost startups in the initial stage find it hard to introduce a 3-day weekend
Reduction in workplace costs like- electricity, food, and office maintenanceAs per a study in the UK, “75% of firms do not appreciate the idea due to fears of losing customers”.  The unavailability of the business may cause customers to leave.
Ideal from an environmental point of view. It helps achieve sustainable growthIt can impact productivity and lead to additional stress issues for employees
Fewer leaves and more availability of employees.Managers may find it challenging to host meetings and manage projects

Best ways to implement a 4-day working week in your startup

If you are starting a new business or your firm, you can adopt a 4-day working module. After testing the feasibility, you can use it as an attractive feature to attract candidates. It is important to analyse the importance of the same on a realistic basis.

On the other hand, if you are a running startup, efforts towards the implementation. It requires revising the company laws and timings. It also means rethinking the costs and additional expenses. As per Allcaps’s founder Roderick,

“If you’re in professional services, you often have project-based work that affords greater flexibility in meeting deadlines. Here, we have milling machines, a trade counter, and around-the-clock deliveries – work from home is impossible, so you need a minimum number of staff on-site, or you don’t have a business.”

It indicates the challenges of the businesses requiring field work and 24/7 availability for client dealings. However, businesses operating from home permanently can benefit from a 4-day working week. Here is how you can implement a 4-day work week in your startup:

1) Determine the company’s short and long-term goals

Before implementing a 4-day week system, analyse the purpose behind it. Do you want to :

  • Increase employee retention
  • Act for employees’ benefit
  • Attract new talent
  • Boost creativity and productivity

Pen down these objectives and improvise. It will help you prioritise the goals and decide right. Once you short-list or prioritise, draft an actionable strategy. Besides that, revise the payrolls, reschedule salaries, and benefits, among other things.

2) Identify the resource or capital to support the need

Switching the working hours module requires one to have a sufficient capital backup. This transition calls for analysing the viability and costs associated.  

You may need better software for employee performance management, clear goals, analysis of the company’s planning needs, and frequent meeting set-up. Employers’ solicitors can help you draft new legal policies that comply with your requirements.

Invite your employees to draft suitable policies regarding the 4-day week proposal. Collaborate with solicitors and employees to ensure a successful implementation.

3) Identify and monitor the new changes closely

After drafting new operational terms, monitor the viability closely. It will help you experiment right.

Identify the extent to which the situation may act in mutual favour. One aspect is to draw the attention of your employees and explain the changes from leadership levels to new joiners. It would invite too many suggestions which can help you optimise the implementation process.  

A 4-day working situation may not be ideal if the implementation affects the business’s bottom line. Identify whether each department can operate efficiently with team members or not.

4) Try the option tentatively

If you are unsure about the impact of a 4-day week, implement it tentatively. Choose a few months to test the option. If your business is seasonal with less work in some months, you can relax with the new rule. After implementation, your cash reserve may fall drastically. Every business requires money to keep up with the competitive requirements.

 If you invest a large portion of capital into optimizing and launching a 4-day set-up, guarantor business loans can help you meet business essential needs. You can use the funds for inventory updates, buying new equipment, training sessions online., etc.

Is a 3-day weekend ideal for your startup?

In today’s challenging business frame, a 4-day weekend is compelling. As per experiments, it leads to productivity, employee retention, and job satisfaction. It helps engage employees better. The viability of the same depends on the company industry, size, employee preferences, capital, and company age.

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