Ever since the Industrial Revolution, our work contracts have been mostly based on a straightforward equation: the more hours we put in, the more work we get done, and the more we get paid. But while this relation between the length of our workdays, our pay and output made sense during the times when most people worked in factories, our economies have since gone a long way. The arrival of the knowledge and gig economy, underpinned by the technological revolution, raised questions about the definition of productivity and how employees should be paid for their work.
For decades, our work contracts have been defined by the number of hours we work. But with the transformation of our economies, technological revolution, and COVID-19 that has accelerated the future of work, it is time to review how we define and measure productivity.
Photo by Kevin Grieve on Unsplash
For many people in the 21st century, the old equation of working more and achieving more no longer fully applies. The zeitgeist of today has shifted the focus towards more flexibility and smart work, and away from equating productivity with longer hours. And while these changes have been gradually taking hold in our workplaces and businesses over the past years and decades, they have been more recently significantly accelerated by COVID-19.
Companies search for new ways of working: from 4-day week to shorter workdays
Recently, companies have been experimenting with the length of their workweeks and workdays. Last year, Microsoft in Japan ran a pilot project, temporarily shortening the workweek by one full day. The conclusions of this experiment were encouraging: a 4-day workweek led to an increase in workers’ productivity by an impressive 40%.
Other businesses have decided to make these changes more permanent. One such company is Perpetual Guardian, a New Zealand trust management firm that embraced a 4-day workweek in 2018 after its trial showed a 20% boost of employee productivity and a 45% increase in employee work-life balance.
Similarly, Blue Street Capital, a California-based company that arranges financing for enterprise IT systems, had previously decided to shorten the length of workdays, instead of workweeks, to 5 hours. David Rhoads, the CEO of the company, got inspired by the success of Stephan Aarstol, the founder of a business trading in paddleboards, who offered his employees a deal: if you figure out how to do the same work in less time, you can keep the same salary and leave at 1 pm. As a result, the company broke one sales record after another.
Therefore, it is safe to say that the discussion on how to best measure productivity and how to re-arrange our workdays and weeks to fit the 21st century is not new. What is new is the acceleration of this change due to COVID-19.
The end of 9-5? COVID-19 has accelerated the change
If the past years have been about a gradual shift in our thinking about restructuring the way we work, COVID-19 has been a great accelerator of this change.
Despite the difficult circumstances of working these past months remotely, the coronavirus pandemic has led to an increase in people’s productivity. According to our global survey of 8,000 office-based workers, managers, and CEOs, there has been a 31% net improvement during COVID-19. This has been underpinned by a number of other factors:
First, people gained more autonomy. 76% of those surveyed said they had either partial or full control over their work schedule. That’s an increase of 21% from the pre-pandemic levels.
Second, across the eight countries surveyed, including the US, Japan, Germany, and Italy, the demand for more flexibility at work has increased. Be it for their work-life balance or improved wellbeing, workers would like to retain flexibility over working hours and schedule and over how and where they can work.
Furthermore, 67% of working parents would appreciate if their employer would flex around their childcare needs.
To keep higher flexibility and productivity, we need to change employee contracts
Therefore, it is no surprise that the positive correlation between higher flexibility and higher productivity is reflected in the way people want to restructure their employee contracts.
Our global survey Resetting normal: Defining the new era of work shows that more than two-thirds of respondents feel that employee contracts should focus more on meeting the business needs than on hours worked. This suggests that workers want to be measured more by their results and achievements than by their presence at work.
As a consequence, such a demand would mean changes to the length of our workdays or weeks. In fact, 67% of those surveyed agreed that employers should revisit the number of hours employers are expected to work on a daily or weekly basis.
The change is here. It’s time to adapt
The world of work is rapidly changing and with it, our expectations of how, where, and when we want to work. COVID-19 has accelerated many of these processes, including how we define and measure productivity.
For decades, the 9-5 workday has been the norm, and our contracts have been defined by the number of hours we work. However, with the transformation of our economies, businesses will be under growing pressure to keep up with the changing times. They will need to embrace flexibility, give employees more autonomy, and restructure work contracts to reflect people’s expectations. The good news is that this would not have to be done at the expense of their productivity—quite the contrary.