The four-day working week and will small businesses need to comply?

The rise of the four-day working week

The concept of a four-day workweek is not new, but recent trials and policy discussions have brought it into the spotlight. Several countries, including the UK, Spain, and Iceland, have piloted reduced work hours, with promising results.

A 2022 UK pilot study conducted by 4 Day Week Global found that 92% of companies participating in the trial decided to continue the four-day workweek permanently due to improved employee satisfaction and productivity.

Similar trials in Iceland, covering both public and private sector workers, concluded that shorter workweeks did not negatively impact output. These successes have prompted discussions about whether governments should introduce legislation mandating a four-day working week.

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Will small businesses be required to adopt a four-day workweek?

At present, no country has made a four-day workweek legally mandatory. However, policy discussions suggest that future labour laws could evolve in this direction.

Potential legislative changes

Governments worldwide are assessing the benefits of a four-day workweek in relation to economic productivity, worker well-being, and environmental impact. Some key developments include:

• United Kingdom—While there is no formal legislation yet, policymakers are considering reducing working hours as part of broader labour law reforms. Some employers have already adopted the four-day week voluntarily.
• European Union – Countries such as Spain and Belgium have implemented flexible work policies, including options for a four-day workweek.
• Australia – The Greens party has proposed a national four-day workweek with full pay, but no legislation has been introduced.

Small businesses may need to consider compliance measures if widespread legislative changes occur. However, any transition would likely include phased adoption, government incentives, or exemptions for micro-businesses.

Challenges of a four-day workweek for small businesses

While larger companies may have the resources to adjust work schedules without significant disruptions, small businesses face unique challenges:

1. Maintaining business operations

Small businesses often operate with a lean workforce, unlike larger firms with multiple teams. A shorter workweek could make it challenging to maintain customer service levels, particularly for businesses reliant on direct client interaction.

2. Financial considerations

Some businesses may struggle to maintain the same level of revenue while reducing employee working hours. This could lead to concerns about:

• Paying employees the same salary for fewer hours
• Potential revenue loss if fewer working days impact service availability
• Increased reliance on automation or temporary staff to fill operational gaps

3. Industry-specific constraints

Specific industries, such as retail, hospitality, and healthcare, require continuous staffing. A mandated four-day workweek may not be feasible without restructuring shift patterns or increasing workforce numbers.

4. Legal and compliance concerns

Small businesses must adhere to employment laws set by Fair Work Australia. Any legislative changes introducing a four-day workweek require firms to adjust employment contracts, payroll structures, and compliance measures.

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Opportunities and benefits for small businesses

Despite potential challenges, small businesses could benefit from a four-day workweek in several ways.

1. Increased productivity and efficiency

Studies indicate that a well-structured four-day workweek can maintain or even improve productivity. With better-rested employees, businesses may experience:

• Higher engagement and performance.
• Fewer sick days and burnout-related absences.
• Greater retention and attraction of top talent.

2. Cost savings

Reducing working hours could lead to lower overhead costs, including:

• Reduced electricity and office expenses.
• Lower commuting costs for employees.
• Potential savings on overtime payments.

3. Competitive advantage

Offering a four-day workweek could position small businesses as attractive employers, helping them stand out in a competitive hiring market. Employees increasingly prioritise work-life balance, making flexibility a key factor in job selection.

4. Environmental benefits

Fewer working days mean fewer commutes, reducing carbon footprints. Businesses adopting this model can enhance their corporate social responsibility (CSR) profile and contribute to sustainability efforts.

How small businesses can prepare

Even if a four-day workweek is not mandated, small businesses can take proactive steps to explore its feasibility.

1. Conduct a feasibility study

Assess whether reducing working hours is practical for your business by evaluating the following:

• Workload distribution – can tasks be completed in fewer days without affecting quality?
• Customer expectations – will clients be impacted by reduced availability?
• Financial impact – can productivity gains offset potential revenue loss?

2. Run a trial period

Before committing to a permanent change, test a four-day workweek for a fixed period (e.g., three to six months). Monitor key performance indicators such as:

• Revenue and productivity levels.
• Employee satisfaction.
• Customer feedback.

3. Implement automation and efficiency tools

To maintain business performance, consider leveraging technology:

• Automated accounting software – platforms like Thriday can reduce administrative workloads.
• Project management tools – applications such as Trello, Asana, and Monday.com help streamline operations.
• AI-driven customer service – chatbots and automated responses can handle client inquiries outside working hours.

4. Consider flexible alternatives

If a full four-day workweek is not viable, explore other flexible work arrangements:

• Compressed workweeks – employees work longer hours over fewer days (e.g., four 9.5-hour shifts).
• Staggered schedules – different teams have different non-working days to ensure business continuity.
• Hybrid models – a mix of remote work and reduced in-office hours.

Final thoughts

At this stage, small businesses are not legally required to implement a four-day workweek. However, it remains a possibility with growing interest from policymakers and companies worldwide. Rather than waiting for legislative mandates, small businesses should proactively assess whether a four-day workweek could offer benefits. By trialling flexible work options, leveraging automation, and preparing for potential policy changes, small businesses can stay ahead of the curve and create a workplace that is both efficient and future-ready.

Would your small business consider adopting a four-day workweek? Start by reviewing your business model and running a short-term pilot to explore its potential benefits.