(Read more articles...)

Small Business

Flexibility in a new economy:  Is a four day week the shape of things to come? During this economic downturn, the business case for flexibility is morphing into a new shape, and so is business practice.  In a time of lay-offs and restructuring, pitching flexibility as a strategy to attract staff is missing the mark.  The business focus now is on reducing overheads and finding viable alternatives to redundancy.  Can flexibility play a role in meeting those needs?  We turned to subject matter experts to identify the new (theoretical) drivers of workplace flexibility, and to emerging best practice business case studies to test the practicalities.  In particular we profile a small business in Australia which has shifted all staff onto a four day week.

Practice

Scanning news reports from Australia and overseas, there are examples of large and small businesses adapting to the impact of the new economy via flexible work practices.  KPMG in the UK, for example, has asked its 11,000 staff to volunteer to switch to a four-day week, or take a long sabbatical on 30% pay, to avoid redundancies in the future.  KPMG’s plan has not been implemented, but this contingency is part of measures the company hopes will help it better manage the current economic turmoil.

In a small business closer to home, the North Coast Ad Agency has reportedly introduced a four day week for all staff.  We interviewed the CEO David Kavanagh about his motivation and experience.

The how?  In late 2008, the company switched to a four-day week, closing the business on Fridays, following negotiations with all staff involved.  Other cost-cutting options had been discussed which included the possibility of losing some staff whilst retaining others full-time or splitting the business into smaller units, giving more responsibility to specialist staff, however the four-day week option found the greatest support amongst the staff.

Interestingly, the company decided to close on Fridays rather than roster staff across the five-day week.  David says the reason for this was to maintain the creative energy and cohesion of the group, rather than fracture the team and risk losing the current internal dynamic.  The logistics of this change have been dealt with via extensive communication with all clients and reminder emails or phone calls on Wednesdays to clarify what needs to be completed by the team on Thursdays.  On Fridays there is an answering service and urgent matters can be dealt with for existing clients if needed.

The experience?  David advised that, to begin with, some staff were unsure about the change, as it required a complete cultural and psychological shift, as well as a decrease in salary, while others were extremely enthusiastic and have used their extra day completing study, caring for children and managing rural properties.  David said that closing the door on a Friday is a rarity in advertising, but he believes it will catch on, and he also sees the change as a positive environmental impact in reducing their carbon footprint.

The outcomes?  In terms of measuring success, David reports increased productivity in the few short weeks they have been operating on the four-day week.  Staff are working more efficiently to ensure Fridays are completely clear and management are closely monitoring staff to ensure extra work is not being completed at home.  The financial return of this initiative will not be known for some months, but the hope is that figures will be more positive in the first quarter than had been anticipated prior to the change.

Conclusion:  Whilst it seems that the majority of employers are still reacting to the global credit crisis (and the need to cut costs) by implementing redundancies, Expert opinion and best practice businesses are looking to workplace flexibility for strategic solutions.  Enabling staff to reduce their hours can help cut people costs, working from home can help cut capital costs, and taking periods of leave can reduce leave debts.  There may also be additional efficiency and environmental benefits which are attractive to best practice employers.  In the long term the market will recover and keeping great staff and a reputation as an employer of choice will pay dividends.