May 20, 2021

Wellbeing, productivity, and the future of work

Author:
David Thompson, Consultant
Beyond this, around one in five businesses say they are likely to implement a variety of measures related to productivity and wellbeing. Some initiatives also aim to give employees a greater degree of control over their working lives.

Balancing both the wellbeing and productivity of employees has always been a key challenge for businesses.


Conventional wisdom perhaps suggests that these two factors are competing – if employees are working very hard for sustained periods of time, they are likely to burn out and their wellbeing will suffer. However, employers are starting to recognise that a satisfied and motivated workforce is likely to be more productive.

There are many initiatives that claim to boost productivity and satisfaction at the same time. Many companies are adopting policies such as a condensed working week where contracted working hours are reduced for an early finish or enforcing more strict bans on working outside of office hours. Governments and policymakers also have a role in defining ways of working, most notably in discussions around adopting a four-day working week. The idea has gradually been gaining traction around the world, with Spain the latest country looking to implement the practice, after the left-wing party Más País proposed the change to the Spanish Government. There has also been recent criticism of overworking culture, such as when information came to light about junior bankers at Goldman Sachs working 100+ hours in a typical week.

Over the course of the pandemic, the world of work has dramatically shifted, so discussions around initiatives such as the four-day working week are now taking place in a vastly different context. According to Savanta’s Coronavirus Data Tracker, as of April 2021, 91% of businesses were operating with at least some of their staff working outside the office or business premises, with 55% of businesses having more than half of their staff out of the office. These changes have placed renewed focus on questions about productivity and wellbeing. Employers are grappling with questions about how productive workers are in and out of the office, and the different types of tasks that both locations are best suited to (e.g. collaborative versus individual work). In addition, there are questions about the effects of working from home on employee’s physical and mental health – a complex picture given that most surveys suggest that employees would like a mixture of home and office working.

The pandemic has also stimulated new conversations about workplace wellbeing. The unimaginable efforts of NHS staff to save lives throughout the COVID-19 crisis has highlighted that not all employees can work from home. There is rising concern about retention of talented NHS employees given the immense strain they have been under, and the recent resignation of Jenny McGee, the nurse who cared for Boris Johnson whilst he had COVID-19 is perhaps symbolic of the general feeling within the organisation.

Six in 10 businesses are looking to implement some form of new working initiative related to productivity and wellbeing in the future. Perhaps unsurprisingly, blended working (a mixture of office-based and home working) is the most common initiative that UK businesses are looking to implement. Blended working is likely to be much more common for medium-sized and large businesses (those with 250+ employees), with 39% likely to adopt such as model going forwards.

Beyond this, around one in five businesses say they are likely to implement a variety of measures related to productivity and wellbeing. Some initiatives also aim to give employees a greater degree of control over their working lives. 20% of businesses are looking to introduce ‘start when you like, leave when you like’ policies, where working hours are more set by ensuring work is done, allowing employees to move away from a traditional 8-hour day model. Across most of these measures, medium-sized and large businesses are the most likely to say they are likely to adopt them, suggesting that these approaches may become mainstream practices for larger employers that arguably set the benchmark for other companies. However, medium-sized and large organisations aren’t particularly more likely to adopt ‘start when you like, leave when you like’ policies, suggesting that smaller organisations (those with less than 250 employees) are more open to a flexible working culture, whilst larger employees will likely take a more structured approach to employee wellbeing (e.g. ensuring all employees finish early on Fridays).

Our Coronavirus Data Tracker shows that 15% of businesses are already either operating (fully adopted) or trialling (e.g. for a limited time period) a four-day working week. This varies by sector, with 21% of arts and entertainment businesses in an operation or trial phase, whilst industry and financial/professional services slightly less likely than average to have done so (13% and 14% respectively). In addition, just 21% of businesses have completely ruled out the practice, with the majority of organisations currently deciding whether or not to introduce it. Smaller organisations are most likely to have already adopted the four-day week, possibly because it is easier to implement with fewer employees (sole traders are the most likely to have adopted the practice). Nonetheless, medium-sized and large businesses are more inclined to say they are likely to introduce the four-day working week in future, suggesting that there may be a swathe of larger organisations introducing the practice soon.

Proponents of the four-day working week maintain that it boosts productivity, as employees have a better chance to rest at the weekend and are then more productive when they are at work. However, only 41% of those businesses who have currently adopted the initiative say that they are paying their employees their full salary. In contrast, just over a quarter asked their employees to take an equivalent salary cut, i.e. their wages have been reduced by 20%. A further 8% have reduced their salary, though by less than 20%. This suggests that appetite for the four-day working week may also stem from a desire to cut costs, in addition to questions of productivity and wellbeing.

The way forward in the debate over productivity and wellbeing is likely to depend on public sentiment as well as the success of businesses that are implementing four-day weeks and other measures to reduce working hours. If sufficient data emerges that these measures boost productivity, it is likely many more businesses will adopt of their own accord. There is also a question of appropriate policy involvement – in Spain, the plan is for Government to support businesses through the transition to a four-day week by covering the cost of employee’s salaries on the days that they would have worked, though that support is likely to be phased out over time. Given the Government’s extensive support for businesses during the pandemic, a precedent may have been set for greater public spending to support employees.

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