What does the four-day week mean for contract and freelance rates?

The march towards a four-day workweek

With the cost of living crisis driven by seemingly runaway inflation, productivity is seen by many as one potential remedy. In economic theory, increasing productivity is part of a corrective mechanism that can help to arrest inflation.

If increasing productivity is the aim, then for many, reducing the working week by 20% may seem to be a counter-intuitive step. However, that’s just what is happening as companies around the world undertake trials of a four-day work week, with Belgium now even offering it as a permanent option to employees who want it.

Findings from Microsoft Japan in 2019 saw a 40% increase in productivity. In Australia and across APAC the idea has already been given wings too. The progressive thinking New Zealand Prime Minister, Jacinta Arden, has already suggested companies roll out four-day working weeks to jump-start post-pandemic economic activity.

Last week saw the UK initiate the world’s biggest trial so far, with more than 3,300 workers at 70 UK companies, ranging from a fish & chips fast food outlet to large financial firms, start working a four-day week with no loss of pay.

It’s thinking-cap time for recruiters!

This is certainly going to drive some conversations between recruiters and their clients! Key issues and challenges might include:

• Risky business: One issue can be simply defined as risk. For permanent roles, offering 5 days’ money for four days’ work, employers may see this as a risk. What happens where productivity is not uplifted?
• Employee retention: One of the factors contributing to the phenomenon of The Great Resignation has been burnout. Although it’s a little early to draw definite conclusions, four-day workweeks may combat burnout and persuade employees to stay, as well as having other beneficial effects, such as reducing employer costs for resources such as such energy.
• A shrinking pool of temps: Of course this is likely to reduce the numbers of temps entering the freelance and contract market after resigning from permanent employment; and others may be attracted to leave temping for a four day week deal. These effects may cause some issues for staffing agencies.
• What it means for temp rates: And for those that continue contracting, how does the four day week translate onto temporary worker contract and freelance roles? One answer is that the rates for such jobs may have to be based on results and productivity… Thinking caps on now!

Agencies adapt better to change with ETZ

The world is evolving at a seemingly faster pace than ever. Technology is at the forefront of change, pushing forward with innovation and increasing efficiency. ETZ is the RecTech partner of choice, helping agencies to navigate the pitfalls and obtain excellent value from technology.

ETZ’s leading timesheet, invoicing and payment solution, and complementary Caspian business intelligence platform are both purpose-built for the recruitment industry. To find out more call us on 0800 311 2266 or book a demo.