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Iceland: Trialling a Shorter Working Week

Updated: Nov 12, 2021

Samuel Dupret explains Iceland’s recent trials for shortened working weeks, exploring whether other countries might benefit from similar experiments.

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The Covid-19 pandemic has changed the way people work, with many jobs going remote. Some businesses and governments are taking this opportunity to consider other changes; Iceland, for example, has successfully trialed shorter working weeks.


‘Shorter working weeks’ entail fewer weekly hours without a reduction in pay, and hours above the limit considered overtime. This is sometimes presented as a four-day working week, but the important factor is the number of hours: four days with 32 hours is different from four days with 40 hours. The idea is that staff can maintain (or even increase) productivity with fewer hours.



The Icelandic Trials


It is important to note that information in English about the Icelandic trials comes from a report by Alda and Autonomy - two groups in favour of shorter working weeks - who did not participate in the trials but reviewed the data.


The Icelandic Federation of Public Sector Unions (BSRB) negotiated two shorter working week trials: one with the city of Reykjavík (2015-2017), and one with the Icelandic Government (2017-2021). Participation in the trials grew overtime to reach a peak of 2,500 staff, accounting for around 1.3% of the working population.


Some of the staff reduced working hours from 40 hours to 35 or 36 – not four-day working weeks per se, as many headlines wrongly suggested – while other staff in ‘control’ workplaces did not, meaning results could compared. A range of workplaces were involved, such as care homes for special needs, a police station, the Reykjavík City Mayor’s office and more.


The trials seem to be a success. With the exception of some offices and smaller departments who needed to use overtime, staff worked fewer hours while maintaining the same levels of productivity and service provision.


Shorter working weeks produced a host of positive effects for staff. These include improved wellbeing at work, reduced stress and a better work-life balance, allowing more time for family, friends and hobbies. As such, extended family not directly involved in the trials, like grandparents, also enjoyed more family time.


The trials likely gave momentum for lasting change in Iceland. New contracts negotiated between the trade unions and public and private sectors have led to 86% of Iceland’s workforce moving to shorter hours, or at least having access to the option.


These new contracts will come with some costs for workplaces where more staff will need to be hired. The police are worried they will require new staff, and therefore more funding. The report estimates that the Icelandic government will have to spend £24.2 million for new healthcare staff. Nevertheless, according to the authors this is just a fraction of government’s budget (£5.1 billion in 2019).



Evaluating Shorter Working Weeks


Although it seems counterintuitive that working less can lead match or boost productivity, OECD data suggests that the most productive countries tend to work fewer hours. For example, the French are reported to be more productive than their British neighbours, while working less.



Sweden has already seen a series of public and private initiatives with shorter working weeks to combat these issues. Swedish health and day care workers, nurses from the Svartedalens nursing home and staff from Sahlgrenska University Hospital’s orthopaedics unit all showed benefits in terms of health, stress or sleep from trials with six-hour days (30-hour weeks but paid full-time). Not only did the Svartedalens nurses take fewer sick days, they also organised more activities for the patients. However, this trial was met with criticism and political opposition over high costs.


In the Icelandic trials, productivity was maintained by rethinking and reorganising how tasks were accomplished, and shortening or cutting other tasks. Notably, meetings were shortened or communicated through email instead.


Perpetual Guardian – a New Zealand estate planning company – trialed having all 240 employees work 30-hour weeks, but be paid for 37.5. Pre- and post-trial measures revealed that performance was maintained, stress was lowered and work-life balanced improved. Founder Andrew Barnes mentioned that employees engaged more fully at work. For example, staff kept non-work activities outside of work, and used social media on the job a lot less.


The 2021 Stop the Clock report suggests that shorter working weeks will benefit the environment because people will engage less in high carbon activities such as using energy at work, commuting and relying on ready-made meals or deliveries. Furthermore, when people get more time off work, they usually engage in lower carbon activities such as family time.


These studies have not gone uncriticised. Some have noted that the maintained productivity might be due to the Hawthorne effect - a change in behaviour because you are aware of being observed or studied, although the likelihood of this is reduced by the use of 'control' workplaces.



The Future of Shorter Working Weeks


The Icelandic trials shine due to their their large samples and positive results. However, are these results likely to be replicated in other countries with larger populations and weaker unions?


The Spanish and Japanese governments have pilots and guidelines for shorter working weeks on the cards. In the UK, the Trades Union Congress have been calling for a four-day week. Large-scale change might be coming in Scotland first, as the SNP’s manifesto includes a pledge for a 10 million pounds fund for companies to pilot a four-day workweek.


There is also a push for companies themselves to transition to four-day weeks. The 4 Day Week Global Foundation has launched a petition to show companies that employees want a four-day week (32 hours). The foundation will launch a 4 Day Week Global Pilot in 2022.


Shorter working weeks are gaining traction. If more countries see benefits similar to those in Iceland, it might well be the next big change in how we work. If this is well implemented, it may boost employee wellbeing, and could be an important step in organising work for coming changes such as increased automatisation due to artificial intelligence.


 

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