Everyone’s talking about the four-day work week, the hottest new trend in the benefits world. So how do sponsors know if it’s right for them?
In the wake of the great resignation and the rise in so-called “quiet quitting” (a recently coined term that simply means employees in exploitative work environments do their job and don’t go above and beyond without compensation, more commonly known as “work to rule”), it’s more important than ever to recruit and retain the people that make the wheels spin in an organization. There have been several trendy benefits that have recently gained popularity, but as with all other things, whether or not those are right for your organization depends on several factors like size, staffing, industry, and culture. Here are the pros and cons that every plan sponsor should consider before getting swept up in the three most popular “next big things”.
The Four-Day Work Week
Everyone loves a three-day weekend, so wouldn’t it be grand to have them every week? Maybe in theory, but in practice it’s far more complicated than that, and can require a complete restructuring of an organization’s workforce. If employers are extending the workday from eight to ten hours for the four remaining days, not only will employees’ productivity diminish (studies show that workers are only productive for about three to four hours a day, so cutting days and extending hours will naturally cut productivity), but it will heavily impact their personal lives for those remaining four days. What happens to parents who have to pick their children up from school, bring them to soccer practice, or make dinner? If they’re expected to get to work early or return home late, that may be a non-starter for many people. Ideally the workday would notextend for the remaining four days, and full-time benefits aren’t cut now that employees aren’t expected to meet a 40-hour workweek. With that said, however, employers would then have to determine whether their employees’ jobs could be done in fewer hours, or if they need to hire additional staff. Given the fact that many workplaces already practice lean staffing, and that the COVID-19 pandemic and great resignation have additionally impacted many organizations, it may simply not be possible for some individuals, teams, or businesses to meet deadlines, complete tasks, and deliver projects on-time with less, well, time. Many employees are already working more than 40 hours, so creating a four-day work week may be counterintuitive and instead create additional resentment that half of the company gets a three-day workweek while the other half is still working 50 hours, six days a week out of sheer necessity. As understaffing is a heavy contributor to employee burnout and encourages employees to seek out a new, better fitting position, sponsors should ensure that adequate staffing is the first item on their list, far before considering a four-day work week.
Unlimited Sick or Vacation Time
It’s a benefit that can be truly fantastic and persuasive in work environments that encourage employees to use it, perhaps via a “minimum vacation time” suggestion, or even a modified version with a vacation “range” of 3-5 weeks. However, the numbers don’t lie; while it sounds great on paper, unlimited sick and vacation time has been shown to actually decrease the amount of time off employees use. The combination of unclear boundaries and concern about not looking like a “team player” mean that employees instead work from home or even come in sick (rather than taking a sick day) and end up taking fewer vacation days than they would have with a more straightforward, limited plan. Additionally, for those who bank those days and carry the balance forward over years to gird against unexpected circumstances, additional parental leave, or simply a payout before they retire, those safety nets disappear with these benefits due to the “use it or lose it” nature of unlimited time off. With that said, if managers actively encourage employees to use their vacation time and stay home when sick, this is a benefit that may be key in attracting younger talent, as new junior employees are the ones who typically have the least amount of time off and feel the highest pressure to “prove themselves”.
Remote Work / Hybrid Schedules
Remote work is a double-edged sword these days. On one hand, employers who have tried to force their employees back into the office have seen massive resignations because remote work has become so heavily normalized and easily accommodated. After all, it’s hard to convince workers who have been doing their job effectively while also saving money on gas, tolls, parking or transit passes, and other commuting or office expenses, and who genuinely enjoy the flexibility of remote work, to do something that doesn’t benefit them at the expense of something that does. There are several models we see today that we wouldn’t have dreamed of five years ago, and each have their positives and negatives. Like everything else there’s no perfect solution for everyone across the board, but the important thing is to be fair: if in a team of six employees, two use a hybrid schedule and come into the office half the time, two work fully remote, and two work fully in-office, it’s important for their bosses and supervisors to keep equally in contact with all of them, and be aware of the very human bias in-person face time produces. The other edge of this proverbial sword is that those who are in-office with their supervisor are statistically more likely to have their work recognized, while those who work from home are very much “out of sight, out of mind”, so creating a workspace that has actively cultivated structural checks and balances to ensure that talent is recognized equitably regardless of location is key, especially when coworkers aren’t on the same schedule or getting the same amount of time with their bosses or supervisors.
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
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