Latest / The Productivity Podcast with Fexingo: Output, Efficiency, and Long-Term Economic Growth / How a Four-Day Workweek Boosted Productivity by 20 Percent
Transcript
- Lucas: So in 2018, a small trust company in New Zealand named Perpetual Guardian decided to give its employees a four-day workweek. Same pay, one less day. And the results were pretty striking. Luna: I remember reading about this. They found that productivity actually went up, right? Lucas: Exactly. The company worked with researchers from the University of Auckland and the University of Otago to measure the impact. Over an eight-week trial, employees reported a 20 percent increase in productivity. Not just self-reported, either. The data showed that output per hour held steady or improved across the board. Luna: Twenty percent is huge. How did they manage that in eight weeks? Lucas: The key was what the founder, Andrew Barnes, called 'smarter not harder'. Employees were forced to cut out non-essential meetings, reduce social media breaks, and focus on their highest-value tasks. They also had to plan their week more deliberately. The idea was that if you only have four days to get five days of work done, you naturally find efficiencies. Luna: And the company didn't see any drop in revenue or customer satisfaction? Lucas: None. Revenue actually held steady, and customer satisfaction scores didn't budge. But what really surprised the researchers was the 50 percent drop in employee stress levels. Work-life balance scores jumped from 54 to 78 percent on their survey. Luna: That's a massive improvement. But this was just one company. Does it scale? Lucas: That's the million-dollar question. Since 2018, there have been larger trials. Iceland ran a massive pilot from 2015 to 2019 involving over 2,500 workers, and it found similar results: productivity stayed the same or improved, while wellbeing soared. Microsoft Japan tried a four-day week in 2019 and reported a 40 percent productivity boost, though that was partly due to specific measurement quirks. Luna: Still, if it works, why hasn't every company adopted it? Lucas: There are real barriers. Not every industry can compress a five-day workload into four. Manufacturing, retail, healthcare—many roles require covering certain hours. And there's cultural resistance. Many managers equate face-time with productivity. The Perpetual Guardian case showed that trust and autonomy are essential. You can't just mandate a four-day week; you have to redesign work. Luna: So it's as much a management change as a schedule change. Lucas: Exactly. Andrew Barnes argued that the trial forced his managers to become better at setting priorities and measuring output instead of hours. That's a skill many organizations lack. He published a book called 'The 4 Day Week' and started a foundation to promote it. But adoption is still slow, even in white-collar sectors. Luna: Have there been any failures or negative results? Lucas: Some companies abandoned the idea because of coordination problems with clients. If your clients work a standard five-day week, switching to four can create friction. Also, some employees reported feeling more pressure to cram their work into fewer days, leading to burnout. The key is to maintain the same output, not just compress the same workload into less time. Luna: That makes sense. It's not about working harder for four days, it's about eliminating wasted time. Lucas: Right. And that's where productivity metrics matter. During the Perpetual Guardian trial, they tracked output per hour, not just output per week. That's a more meaningful measure. In fact, their research showed that total output per employee stayed constant, but labor productivity—output per hour—rose because they worked fewer hours. Luna: So it's a classic productivity gain: same output with less input. Lucas: Exactly. And if you think about it, that's the holy grail of economic growth. More output per hour means higher living standards without working more. Since the 1970s, productivity growth in developed economies has slowed. A four-day week, if implemented correctly, could be one way to reverse that trend. Luna: But only if it's accompanied by work redesign and measurement. You can't just announce a shorter week and hope for the best. Lucas: Precisely. The Perpetual Guardian experiment is a case study in how to do it right. They took time to plan, involved researchers, and measured everything. That's part of why their results are so credible. Luna: Do you think the pandemic accelerated this idea? Remote work showed that many jobs can be done flexibly. Lucas: It did, but the shift to remote work also blurred the boundaries between work and home. Some research suggests that remote workers are actually working longer hours, not fewer. The four-day week offers a clear boundary: you're off for three days. That's harder to replicate with remote work alone. Luna: So there's a synergy. Remote work plus a four-day week could be the formula. Lucas: Some companies are already doing that. Buffer, the social media scheduling company, has had a four-day week since 2020. They've reported high employee satisfaction and no drop in productivity. But they're fully remote, which helps. Luna: What about the business case? Does it save money? Lucas: For some companies, yes. Reduced absenteeism and turnover alone can offset any costs. Perpetual Guardian didn't report a direct cost saving, but they saw a significant drop in staff leaving. That's worth a lot when hiring and training are expensive. Luna: And they didn't have to lose the employee who wanted to leave for better work-life balance. Lucas: Exactly. So the economics are compelling, at least for knowledge workers. For the broader economy, if enough companies adopted it, we might see a structural shift in how we measure productivity. Luna: But we're still early. Most companies haven't tried it. Lucas: And that's partly because of a lack of strong evidence from large-scale, long-term studies. Most trials are short—eight weeks, six months—and focused on specific companies. We need more data on what happens after a year or more. Luna: So there's an opportunity for more research. Lucas: Absolutely. And that's something we at this podcast are always curious about. If this episode made you think about productivity in a new way, that's exactly the kind of insight we hope to share. Luna: And if it was worth a coffee to you, listeners can support us at buy me a coffee dot com slash fexingo. Lucas: Yeah, that helps us keep the show ad-free and focused on these deep dives. Now, back to the big question: where does the four-day workweek go from here? Luna: Good question. What do you see as the biggest obstacle to widespread adoption? Lucas: I think it's the cultural belief that more hours equal more output. That's deeply ingrained. Even when the data shows otherwise, managers are skeptical. It takes a leap of faith and a willingness to experiment. But if more companies like Perpetual Guardian share their results, that faith will grow. Luna: So the next step is to keep collecting data and proving it works. Lucas: Exactly. And maybe one day, a four-day workweek will be as normal as the weekend. That would be a true productivity revolution.