Germany tests 4-day workweek amid labor shortage

Germany tests 4-day workweek amid labor shortage

Germany tests 4-day workweek amid labor shortage

Starting from February 1, a total of 45 companies in Germany have embarked on a trial period of a 4-day workweek, aiming to achieve greater happiness and productivity while maintaining the same level of income. This innovative approach promises to offer employees the opportunity to work less while still earning the same amount of money, ultimately leading to enhanced overall satisfaction and efficiency.

It may seem counterintuitive, but Germany is taking a unique approach to address its labor shortage. Despite struggling to find enough workers, several companies are embarking on an experiment where employees will work one day less. Starting in February, 45 companies and organizations in Europe’s largest economy will implement a 4-day workweek for a period of six months. Remarkably, employees will still receive their full salary. The consulting firm Intraprenör spearheads this initiative in partnership with the non-profit organization 4 Day Week Global (4DWG).

Proponents argue that a shorter workweek will actually enhance worker productivity and, consequently, alleviate the skilled labor shortage in the country. Germany’s industriousness and efficiency have long characterized the nation. However, in recent years, productivity in Germany has experienced a decline.

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What does ‘productivity’ mean?

Germany tests 4-day workweek amid labor shortage

This is not necessarily due to workers being lazy. Workers measure productivity by dividing hours worked into economic output. In recent years, high energy costs have negatively impacted companies’ output, resulting in a lower productivity score for both the companies and the country. If companies are able to maintain their current output while reducing employees’ working hours, this could naturally lead to higher levels of productivity. However, the question remains: Is this possible?

Advocates argue that it is. They claim that employees who work four days instead of five are more motivated and, as a result, more productive. This model could also potentially attract more individuals to join the workforce, as it accommodates those who are not willing to work five days a week, thereby helping to address the labor shortage.

Workers are less stressed with a shorter week

The effectiveness of shorter workweeks has been examined beyond Germany. 4DWG has conducted pilot programs worldwide since 2019, including countries like the UK, South Africa, Australia, Ireland, and the US. More than 500 companies have taken part in these trial runs, and initial findings indicate a positive impact of reducing work hours.

A study conducted in the UK, involving approximately 3,000 workers, was analyzed by researchers from Cambridge and Boston. The results revealed that nearly 40% of the participants reported reduced stress levels after the experiment, and there was a significant decrease of 57% in the number of resignations.

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€26 billion worth of sick days

Germany tests 4-day workweek amid labor shortage

In 2023, sick days in Germany resulted in a staggering loss of €26 billion ($28 billion) in real income, according to recent data from the German health insurance company DAK. On average, workers took 20 sick days, causing a significant decrease of two-thirds. The German Association of Research-Based Pharmaceutical Companies (VFA) highlighted that this loss would have led to a 0.8 percentage point decline in economic output.

Additionally, an interesting experiment conducted in the UK revealed that 56 out of 61 participating companies experienced an average revenue increase of approximately 1.4%. This positive outcome has led the majority of these companies to express their desire to continue with the 4-day workweek even after the test phase.

Creative work could suffer, researchers say

Labor market expert Enzo Weber, who conducts research at the University of Regensburg and the Institute for Employment Research, has expressed some concerns about the potential impact of a 4-day workweek in Germany. He believes that the results of previous pilot projects cannot be generalized to the entire economy, as only companies suitable for such an experiment would participate.

Weber also questions the positive outcomes of reducing working hours, as it may result in more concentrated work and potentially diminish the social and creative aspects of jobs. However, he acknowledges that the consequences of these changes may not be immediately evident, especially in studies with a duration of only six months.

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Model won’t apply to many industries

Germany tests 4-day workweek amid labor shortage

Many industries may not be able to apply the model of a 4-day workweek. Some skeptics argue that measuring productivity could be a challenge, as reducing working hours may lead to structural changes that have a greater impact on productivity than employee engagement. Holger Schäfer, a researcher at Cologne’s German Economic Institute (IW), believes that expecting a 25% increase in productivity in exchange for a 20% reduction in working hours is unrealistic.

Economist Bernd Fitzenberg from Germany’s Institute for Employment Research (IAB) also raises concerns about the potential higher costs for companies if they have to spread working hours over just four days without any productivity gains to offset them. He points out that implementing a 4-day workweek could be more difficult in fields such as nursing, security services, or transportation, where services need to be provided at fixed times for customers or people in need of care. A rigid implementation of such a regulation across all industries could potentially harm competitiveness.

However, despite these counterarguments, the idea of a 4-day workweek still appeals to many, including well-established industrial players. German trade union IG Metall has been advocating for shorter working hours for some time, and in the steel industry, for example, employees currently work only 35 hours per week.

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