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A new report from think tank Autonomy says most firms could afford to move to a four-day week on full pay.
Most firms could afford to switch to a four-day working week with no loss of pay if it is introduced gradually, according to a study by think tank Autonomy.
Using profitability statistics drawn from a database of over 50,000 leading UK firms, Autonomy simulated best and worst case scenarios regarding profit rates under a sudden imposition of a four-day week and found that under the best-case scenario, a reduction in hours would be entirely offset by increases in productivity and price increases.
Under the worst-case scenario, a four-day week with no loss of pay would be affordable for most firms once the initial phase of the Covid-19 crisis has passed and that some firms in high-labour cost industries could experience cash flow problems, but only if a four-day week was implemented too quickly.
The report says the process of changing expectations and behavioural norms could be sped up by the creation of more bank holidays, and the reintroduction of pro-union legislation. It adds that, even if a four-day week in the private sector took longer than expected, a four day week in the public sector could support the UK’s long-term recovery from the Covid-19 crisis.
The report recommends that the public sector should lead the way in adopting shorter working hours and trade unions should be given a stronger voice to negotiate working time reductions in their specific sectors.
A survey undertaken by Survation on behalf of Autonomy found that 79% of business leaders were either ‘very open’ or ‘quite open’ to a four-day working week.
The report’s authors say: “The confluence of economic crisis, widespread job losses, and a private sector ready to embrace change make the introduction a four-day week a huge opportunity. More jobs would be created, more people would enjoy a balance between work and leisure, and livelihoods would be protected. We argue, in summary, that a four-day week with no loss of pay should play a central role in post-Covid economic and social policy.”