Are Shorter Work Days Better for Growth?

Till date, we have been paid and no paid leaves argued in state houses, campaigns and assemblies. However, now the whole debate is about short work days for personal and professional growth. The idea of paid leaves require support, but does short working hours deserves the debate?

The idea of shorter working hours is being argued for a long time, but it may not seem profitable to the business owners. However, according to a study conducted in Denmark, short working hours can enhance the quality and quantity of productivity.

Often we see that increase in industrial productivity is the result of technological advancements and new inventions. It is also believed that technological advancements make every labour unit effective and efficient. However, rather than investing in technological inventions, institutional inventions can prove to be more healthy for the work environment.

The five day a week work culture is one of those institutional inventions. Though many of us may not agree with it, as five day work week has now been deeply integrated into our minds. The five-day work culture is human-made and can be changed as per the requirements.

Labour productivity and economic growth

Around the 1950s, American economist and achiever of the John Bates Clark medal, Robert M. Solow structured a model for conventional economic growth that became the most important part of the neoclassical economic theory.

The idea behind this growth model is that the economic output is a combined result of some labour, capital and total factor productivity, which is a residual variable. This includes all additions to results which aren’t accounted for either capital or labour. Therefore, the economic growth has to be a characteristic of either increase in any one of the primary factors of productivity, labour or capital, or with an enhancement in total factor productivity.

Here the full factor productivity is elucidated as a reflection to the methods in which the technological inventions and advancements have drawn either of two important factors included in productivity more efficient. Maximum advancements made in the increase of production happened in the previous 250 years.

Woman relaxing in a hammock, Relaxation, Holiday, South Australia, Australia

Increasing indulgence of technology and Industrial Revolution

We all know, during the late 1700s and early 1800s, the Industrial Revolution took place, which was the major industrialisation in the history. Other than introducing economic growth, Industrial Revolution brought improvements in the standard of living, which eventually added to increased productivity through technological inventions and advancements.

Significantly, every Industrial Revolution, contributed to technological advancement, time to time. From the steam engine to the telephone and from electric lighting to internet and robots, every Industrial Revolution awarded human race with many technological inventions.

While all the brilliant inventions during Industrial Revolution, supported the increase in output per capita, intelligent economic historians accepted the importance of institutional advancement. Perhaps, institutions were much more dominant, and influential is maintaining longer periods of healthy economic growth, even before the first Industrial Revolution. Institutional advancements and inventions empower peace, communication, trust and, law and order in the society, which shows enormous advantages in developing higher worker productivity and fruitful economic growth.

Stretch of weekly working hours as an institution

While discussing institutional advancement and importance, we focus on law and property rights enforcement, money and credit. However, we forget to understand the most critical component of institutions, which is the work hour distribution and length over a week.

The persisting five days a week work culture is not something that cannot be changed. As mentioned above this typical five-day work a week is human-made too. The first implementation of the five-days a week work culture started in an American industry by a New England mill. Henry Ford is accredited with the introduction of the eight-hour shift per day and five days a week culture in 1914. This institution was implemented to distribute the work during the problem of unemployment in America.

However, with the passing time, many types of research have been conducted, which proved that this institution is highly inefficient. Also, these studies suggest that shorter working hours increases productivity, improves employee health and maintains employee retention rates.

Advantage of short working hours

The study conducted in Denmark, suggests that individuals who work six hours a day are healthier as compared to those who work for eight hours. Which means workers who will work for fewer days a week or fewer hours a day, will require less sick leaves and less offs for other personal reason. Hence, fewer working hours will contribute to higher productivity.

As Stephen Aarstol, the Founder and CEO of Tower Paddle boards says, they used to operate for traditional eight hours work culture at the start of Tower, but later limited the daily working hours to five hours a day. Stephen put this theory to the test for three months and found a growth in productivity and employee loyalty. Although the employee rate at Tower is not more than ten people, shorter working hours raised the effectiveness of the hourly work rate of every employee. Without investing any additional finance, Stephen received a growth of 40% in revenue, in a year.

Another study conducted in 2013 by OECD brings out the fact that workers who are more productive and active tend to work less than those who are not so productive. This study shows that where Greek employees had to invest approximately 2,000 hours every year, Germans needed only 1,400 hours per year to bring in 70% more productivity. Also, the workers who are more productive tend to get better pay, which motivates them to enhance their productivity. Additionally, by working for fewer hours employees feel less stressed which keeps them healthy.

If you are looking for efficient productivity growth, you will have to reduce the stress of your workers and give them time to improve their health. Shorter work days or shorter work weeks can be your master stroke in increasing productivity. If the income of your employees will be based on some working hours, short working hours will reduce the pay. Which means your employees will focus on completing work hours rather than increasing productivity. However, if you link your employee’s pay to their rate of productivity, you can gain higher returns in short period.


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