Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / How a 4-Day Workweek Boosted Productivity 40 Percent
Transcript
- Lucas: If someone told you that cutting a full day off the workweek would actually make your company more productive, you'd probably ask for the fine print. But a mid-sized tech consultancy called Redwood Digital ran a year-long trial starting in June of 2025, and the results are pretty striking. Luna: I've seen headlines about four-day weeks before. Usually they're buzzy but the numbers are soft. What did Redwood actually find? Lucas: They went from a standard five-day, 40-hour week to a four-day, 32-hour week — no pay cut, no reduction in benefits. After twelve months, revenue was up 38 percent year-over-year. Employee turnover dropped from 22 percent to 11 percent. And sick days? Down 25 percent. Luna: Those are huge moves. But I'm wondering — was the revenue growth just a coincidence? Maybe the market was hot for whatever they do. Lucas: Fair question. Redwood is a custom software shop, so project-based revenue. They compared their growth to a peer group of similar consultancies in the same metro. The peers averaged 12 percent growth. Redwood did triple that. And here's the thing: they didn't add headcount. Same number of engineers, one fewer day. Luna: Okay, so you've got my attention. How did they actually pull it off without just pushing five days of work into four? Lucas: That's the central question, isn't it? The company made three structural changes. First, they banned all internal meetings on Tuesdays and Thursdays. Those days became deep-work blocks. Second, they moved from tracking hours to tracking outcomes — each team agreed to a set of deliverables per sprint, not a time log. And third, they automated a ton of status reporting so managers didn't need stand-ups to know what was happening. Luna: Before we go deeper, I want to say something. Episodes like this are exactly why we keep Hiring & Firing completely ad-free. No sponsors, no mid-roll interruptions. If these conversations have helped you think differently about your own team, supporting that choice is easy: buy me a coffee dot com slash fexingo. It's a small way to keep the show independent. Lucas: Absolutely. That support is what lets us drill into real data like Redwood's instead of chasing clickbait headlines. Alright — back to the four-day week. The meeting ban alone freed up about six hours per person per week. That's nearly a full day of reclaimed time. And they didn't just cut meetings arbitrarily; they evaluated every recurring meeting for necessity. About 40 percent got killed outright. Luna: I imagine client-facing folks had a harder time. If your client expects a call on Thursday, you can't just say 'sorry, it's our deep-work day.' Lucas: That was the biggest friction point. Redwood's solution was to create 'client-facing hours' on Monday and Wednesday afternoons, and they trained clients to batch requests. They even offered a 5 percent discount to clients who agreed to use a structured request system. Surprisingly, most clients adapted within two months. The ones who couldn't — they were usually the ones with chaotic processes themselves. Luna: So the four-day week actually acted as a filter for bad clients. That's interesting. But what about the employees — did they just work harder the four days they were there? Lucas: Some did, initially. The company tracked what they called 'intensity scores' based on keyboard activity and task completion rates. In the first two months, intensity went up about 15 percent. But then it tapered off. By month six, people had learned to pace themselves. They also found that errors — buggy code, missed specs — actually decreased by 18 percent. So it wasn't just speed; it was quality. Luna: What about the Friday off? Did people actually unplug, or did they check email from home? Lucas: The company explicitly discouraged any work on the fifth day. They even turned off Slack and email access for non-executive staff on Fridays. Interestingly, the one group that struggled was the executives themselves. A few of them admitted they still worked a half-day on Friday. But the policy was clear: unless there was a production outage, Friday was off-limits. Luna: That's a really important detail. If the leaders aren't modeling the behavior, the policy is dead on arrival. Did they have any issues with resentment from people who worked different schedules? Lucas: Great point. Redwood has a small customer support team that had to cover five days. They gave those employees a rotating three-day weekend — basically a compressed week — but that created some scheduling complexity. The company ended up hiring two part-time support people to fill gaps, which cost about $80,000 a year. But they calculated that the savings from reduced turnover alone covered that cost three times over. Luna: Let's talk about turnover. You mentioned it went from 22 to 11 percent. That's a massive improvement. Did they survey leavers to understand why? Lucas: They did exit interviews for everyone who left during the trial. The top reason cited before the four-day week was 'work-life balance.' After the change, that reason dropped to third place. The new top reason was 'career growth' — people wanted more advancement opportunities. So the four-day week actually exposed a different problem: they hadn't built clear promotion paths. That's a good problem to have, but it shows that fixing one pain point reveals others. Luna: So the four-day week isn't a silver bullet. It forces you to get better at the fundamentals — prioritization, communication, and actually trusting your people. Lucas: Exactly. And I think that's the real lesson from Redwood. The four-day week was a catalyst, not the solution itself. They had to improve their meeting culture, their performance metrics, their client management. Those changes would have been beneficial anyway. The four-day week just made them urgent. Luna: Were there any hidden costs beyond the part-time support hires? I'm thinking about things like client churn or slower decision-making. Lucas: Client churn was actually flat — they lost about the same number of clients as before. But decision-making did slow in one area: cross-team projects. When you have a developer who needs input from a designer, and they both have different off days? That coordination took longer. Redwood addressed it by designating every Wednesday as a 'collaboration day' where all teams were expected to be present. That created a natural sync point. Luna: That's clever. So the week has a rhythm: Monday deep work, Wednesday collaboration, Tuesday and Thursday deep work again, and Friday off. Did they see any productivity dip on Wednesdays? Lucas: Actually, yes. Wednesday productivity was about 10 percent lower than other days, measured by code commits and completed tasks. But the company decided that was acceptable because the collaboration was generating value that wasn't captured in those metrics — better designs, fewer misunderstandings, more innovation. They actually started tracking 'collaboration outcomes' separately: things like new ideas generated or cross-team dependencies resolved. Luna: That's a good example of what happens when you measure the right things. If you only track individual output, you miss the value of coordination. I wonder how many companies try a four-day week but fail because they keep measuring by hours or individual tickets. Lucas: That's probably the number one failure mode. There's research from the University of Auckland that looked at four-day week trials across 30 companies. The ones that succeeded had already moved to outcome-based performance reviews. The ones that failed were still clock-watching. Redwood had already been moving in that direction for a year before the trial, which is part of why they succeeded. Luna: So the four-day week is almost an advanced move. You don't start with it; you build up to it by fixing your management practices first. Lucas: Right. And Redwood's CEO said something I loved in their internal post-mortem: 'The four-day week didn't make us more productive. It forced us to stop doing things that made us less productive.' That's the whole thing in a sentence. Luna: For a manager listening right now who's intrigued, what's the first concrete step they should take? Lucas: Start with a meeting audit. For one week, have everyone track every meeting they attend, its duration, and whether it could have been an email or a Slack message. Most teams find that 30 to 40 percent of meetings are unnecessary. Once you've cut those, you've already freed up hours. Then try a 'no-meeting Wednesday' for a month. See if output improves. If it does, you have evidence to go further. Luna: That's practical and low-risk. And if it works, you've built the case for a full four-day trial. I think a lot of listeners could start that next week. Lucas: That's the idea. Small experiments, real data, then scale. Redwood didn't jump into a four-day week overnight. They spent six months prepping — auditing meetings, shifting to outcomes, getting client buy-in. The trial itself was the final step, not the first. Luna: Alright, I'm sold on the concept. But I want to push back a little: isn't there a risk that the four-day week becomes a perk that attracts people who want to work less, not smarter? You might get applicants who are looking for an easy gig. Lucas: That's a real concern. Redwood found that their applicant pool actually got more selective — they saw a 40 percent increase in applications, but the quality went up. Why? Because the four-day week signals that the company values efficiency and trust. That attracts high-performers who hate wasting time in pointless meetings. The people who want an easy gig? They usually don't pass the outcome-based performance bar anyway. Luna: So it's a self-selection filter. That's a nice side effect. One more thing: what about the legal or compliance issues? Some states have overtime rules or exempt/non-exempt classifications that might make a 32-hour week tricky. Lucas: Redwood is in California, which has fairly strict labor laws. They worked with an employment lawyer to reclassify some roles. For exempt employees, it was straightforward — as long as they're paid at least $67,000 a year, California's threshold, and their duties are exempt, you can set whatever schedule you want. For non-exempt, they had to be careful about overtime when they occasionally worked on a Friday. But Redwood simply prohibited non-exempt employees from working on Fridays, and they had enough coverage. So it's doable, but you need legal advice. Luna: Good to flag. I guess the bottom line is: the four-day week can work, but it requires real operational discipline. It's not a hack. Lucas: Exactly. It's a forcing function for better management. And if you're not ready to do the hard work of fixing your meeting culture and your performance metrics, it'll probably fail. But if you are? The data from Redwood and other trials suggests it can be a genuine win-win. Luna: I wonder if we'll look back in ten years and see the four-day week as a standard baseline, like the weekend used to be. Lucas: It's possible. We're seeing more trials — Iceland had one, Japan is experimenting. The evidence is building. But it will take time. For now, it's still an edge case. But for companies in the right position, it's worth a serious look.