Is Iceland really living the four-day work week dream?

Iceland’s four-day week trial has been heralded as a resounding success but does it really work as well as the results suggest?
The four-day week trials were run by Reykjavik city council and the Icelandic government

The concept of a four-day work week, where employees can enjoy an additional day off without sacrificing any pay, has been promoted by unions and activist groups in recent years. While many recognise the benefits a reduced working week would have for work-life balance, implementation has been limited to a small number of businesses and trials.

Earlier this month, the push for a four-day working arrangement was meant to have reached a turning point after the results of the world’s largest four-day work week trial were published. The trials saw 1% of Iceland’s working population take on reduced working hours between 2015 and 2019. 

But despite being described as a shift to a four-day working week in much of the media, the reality was that a majority of the Icelandic workers moved from a 40-hour to 35- or 36-hour work week. For some shop workers involved in the trials, working hours were only cut by 35 minutes a week.

Henley Business School professor Rita Fontinha explains: “It is important to clarify that the Icelandic experiment did not necessarily include a move to a four-day working week. The trials only included a reduction in working time of between four and five hours.”

This compares favourably to the current hours worked by employees in the UK. The latest Office for National Statistics results show that full-time employees worked an average of 35 hours a week between March and May 2021. 

Although the pandemic has likely had an impact on these figures – with 3.4 million workers still on furlough, according to data from the end of April – the average work week in the UK pre-pandemic (November to January 2019) was 36.9 hours. 

“This is not to say that the Icelandic trials didn’t have important consequences,” Fontinha adds. “Iceland was one of the Nordic countries that had longer working hours, compared to Finland, Denmark, Sweden and Norway. Studies have shown that moving to a shorter working week, regardless of whether it’s a four day week or not, may have positive consequences for occupational health and organisational level performance.”

What did the Icelandic four-day week trial achieve? 

Analysis from Icelandic progressive think tank Alda and UK equivalent Autonomy, found that a reduction in working hours either maintained or increased productivity, improved workers’ wellbeing and crucially remained revenue neutral for Reykjavik council and the Icelandic government, which ran them. 

Autonomy researcher and co-author of the report Jack Kellam says: “These trials showed you can affect changes in working time and reduce your hours for no loss in pay and through a revenue neutral approach. This isn’t necessarily something that’s particularly expensive and can benefit organisations and their employees.” 

The pandemic has shown that we can make drastic changes to working life, so there’s no reason a four-day week can’t happen

Although all those involved were public sector workers, the trial included a mix of those involved in a nine-to-five working pattern, as well as shift work, and included hospital employees, childcare workers and police. “It shows that shorter working time can be a real possibility beyond just office-based administrative work, as sometimes people assume,” Kellam says.

As a result of the positive impact of the trials, 86% of Iceland’s working population now work reduced hours or have the option to decrease their hours as part of their contract of employment. 

Could a four-day week work in the UK?

Outside Iceland, the concept is also gaining popularity. The Scottish Nationalist Party has promised a four-day work week trial, while Spain also has plans to test reduced hours as part of a pilot project.

A 2019 YouGov poll of 502 UK businesses revealed that 64% support the idea of adopting a four-day week. Larger businesses - those with 500 or more employees - were even more receptive to the idea, with 73% backing it.

Kellam says: “The desire for better work-life balance has been there for quite a long time and it’s been growing given the overwork culture lots of UK workers suffer. The pandemic has shown that we can make drastic changes to working life, so there’s no reason a four-day week can’t happen here.”

However, backing for a four-day week is not universal. A briefing paper from the Social Market Foundation claimed that a reduced working week could exacerbate existing inequalities, with higher earners and men most likely to benefit from its introduction. It suggests that a fairer redistribution of the domestic workload and more opportunities for the underemployed would need to come alongside a four-day work week in order to make it a success for all. 

Fontinha says: “It is crucial to identify the specific needs of individuals and businesses so that we don’t emphasise social inequalities, rather than implementing a blanket approach for all.”

Flexibility will therefore be key to making the transition to a shorter working week a success. 

One company that has moved to a more flexible working arrangement is content marketing agency RedSprout Media. After initially trialling a strict Monday to Thursday work week, it found a work anytime policy had more success. 

Company co-founder Mark Gaisford says: “On the surface, four days a week is great but the problem we found was that it is still too rigid as a system. Some people are night owls, some people are early birds. By allowing people to work at a time that their brain is at its best, we’ll hopefully get more out of our employees.”

Employees at RedSprout are now expected to dedicate 30 hours a week to work but are free to decide when and where this happens. Gaisford adds: “It’s no longer about hours at a desk, it’s about what you achieve in the hours that you’re working.” 

While a shorter working week has repeatedly been shown to have tangible benefits for both staff and employers, it is important to carefully consider how it should be implemented. Henley Business School has estimated that the four-day week already creates combined savings worth £92 billion each year for UK businesses that have already implemented it, while the qualitative data from Iceland’s experiments shows the positive impact reduced working hours have for workers’ well-being.

For employers looking to tap into these benefits, discussions with employees and a flexible approach will be key to ensuring a positive outcome for all.