German Cancellor Olaf Scholz (L) talks to a worker at the assembly line during his visit to the German automaker BMW's car factory in Munich, Germany, 05 December 2023. EPA-EFE/ANNA SZILAGYI


German companies begin four-day working week experiment


Some 45 German companies have made a radical change; their employees will be able to work one day a week less for the same salary.

For the next six months, it was decided on February 1, the firms will try out a four-day working week. The main backers of the experiment are German consulting firm Intraprenör and the non-profit organisation 4 Day Week Global (4DWG).

The goal is to get part-timers into more regular work and combat wage inflation. In addition, improving “work-life balance” is expected to boost productivity to offset a decline in man-hours.

Bringing in more part-timers is aimed to help in reducing a skilled-labour shortage in the nation.

Despite Germany’s image as an industrial powerhouse, the country is going through economic difficulties. It is experiencing “degrowth” as companies reduce their presence due to the rapid deterioration of the market outlook and amid rising energy costs.

Overall productivity – the ratio of hours worked to output – is in decline.

Intraprenör and 4DWG argue that workers who put in four days of labour as opposed to five are more driven and, consequently, more effective.

In addition to helping to address the labour shortage, it is felt this strategy may encourage individuals who are unwilling to work five days a week to enter the workforce.

Other nations already have similar initiatives in place including South Africa, the US, Canada, the UK and Ireland.

4DWG claims the concept leads to a 36 per cent increase in revenue, a 42 per cent decrease in employee resignations, a 68 per cent reduction in “burnouts”, a 54 per cent increase in work-ability and that 63 per cent of employers claim they find it easier to attract talent.

The French Government is also said to be discussing the issue.

Stijn Baert, a professor of labour economics lecturing at the Belgian University of Ghent, told Brussels Signal he did not believe in the strategy of reducing working hours on a national level while maintaining the monthly salary.

“There is research indicating that this could slightly increase workers’ productivity but, simultaneously, it is insufficient to offset the increased hourly labour cost – the monthly salary remains stable while the number of hours worked decreases,” Baert said.

“As a result, companies in such a country would price themselves out of the market when operating internationally.” The professor pointed to his own research on the topic, which invalidates the claims of the plans’ proponents.

“Furthermore, the link between working fewer hours and burnout is not very strong. If an employer merely offers shorter work-weeks without making changes to workload or the work process, it could increase work pressure and contribute to a higher risk of burnout.”

The Economic Times of India noted that Asia’s economies, replete with excess labour, are gaining a productivity advantage over Europe. It reported that efforts to boost productivity by restricting the flow of capital and labour are usually not viable.

Labour imports and capital exports will still be necessary for economic growth, it added.