DATABASICS Time & Expense Blog

The 40-Hour Workweek's Death Is Changing How People Get Paid

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It’s not news that the 40-hour workweek is dead. Gone is the notion that employees are most productive when they are at their desks from 9 a.m.-5 p.m. on Mondays, Tuesdays, Wednesdays, Thursdays, and Fridays. We know now that humans are different; some do their best work at 6 a.m. and others get the most done at 6 p.m. What solutions exist to the problems of stress and unhealthy work-life balance that come from working too much overtime? And how can the 40-hour workweek be restructured to create a more healthy balance?

A considerable problem in the 40-hour workweek is that workers aren’t really working only 40 hours and they’re not as productive even when they work more hours. The device that keeps them connected to their friends and family keeps employees connected to work too. This always-on mode means that when employees leave the office on Mondays, Tuesdays, Wednesdays, Thursdays, and Fridays at 5 p.m., they leave their mind behind in front of their computers.

Because French officials see a problem with this always-on mode, a law instituted on January 1, 2017 required employers to make clear their expectations for how workers should be available outside of work hours. The trick is that the law requires only clarification: employers just have to explain what the rules are and employees can either agree to the rules and continue to work there, or they can quit. 


Related Article: Fun Friday: 3 Tools The Best Employers Use To Retain Their Best Employees


While the law didn’t end up making any large-scale change (so far), it did prompt dialogue about the issue, which is a step in the right direction since recent reports state that 40-hour workweeks might be more hazardous for our health than we think. According to researchers, working more than 39 hours per week is detrimental to mental health, causing fatigue- and stress-related illnesses.

This all adds up to companies, particularly startups, taking a chance on new kinds of workweeks. Here are some possibilities being tried out across the globe

  1. Flexible start/end times: Offering the flexibility to avoid rush hour, this means increased productivity for workers since they spend less time in traffic. A shorter commute gives back large portions of the day to employees who otherwise lose hours out of their day going nowhere. Plus, this assists companies that might have satellite locations across different time zones, allowing them to sync their schedules for teleconferences.

  2. Seasonal changes: Changing schedules with the season is a good idea if business is slower during certain times of the year. An example might be a 10-hour workday from Monday-Thursday with Friday off during the summer.

  3. “Comp time”: This solution involves changing the workweek from 40 hours to 35 hours, but with a salary that matches those 35 hours. This can also be arranged to squeeze 12 hours out of 3 days per week.

  4. Shorter workdays: A 2015 Swedish experiment decreased the workday from 8 hours to 6 hours. The result was that workers were mentally healthier and happier, but more employees had to be hired to complete remaining work. The experiment is still ongoing, but so far results suggest that workers aren’t getting the same amount of work done in those 6 hours.

  5. Unlimited vacation: Those words sound awesome, bringing to mind weeks spent lounging on the beach or hiking the Amazon rainforest. In reality, the concept is a bit more hazy: workers make arrangements with their colleagues and managers for taking whatever time off they want (time that is not tracked by managers), but “unlimited” doesn't really mean “unlimited.” In this context, “unlimited” means something more along the lines of a few weeks. It’s possible for employees to take the time off that they need, but managers say that they would frown upon anything more than a few weeks.

All of these alternative workweeks add up to one major existential question: what matters, or what does the company value? Technically, companies provide benefits to employees partially because some benefits are required by law should an employee work more than a particular number of hours, but benefits like flex-time or “unlimited vacation” are used to attract top talent. Once that talent is acquired, the real question becomes about what’s important to the company: the journey or the destination.

Companies that value the journey value process & product and, perhaps it can be intimated, also value an employee’s physical and mental well-being (and thus the other side of their non-work life that involves family and hobbies and learning). On the other hand, companies (like Netflix) value “great results rather than…process.” This means that the focus is on the product with the process used to create that product considered to be just the means by which the product is made. This could suggest that these companies value dedication to results, which means doing whatever it takes (including longer hours) to achieve results.

There are definitely more questions than answers when it comes to this topic. Remote employees, for example, add a unique twist to the problem. Since it’s not possible to “see” their work in the office, the job becomes entirely about the product. Should there be a new category of labor based on the number of hours that remote employees complete or should they be paid solely on their deliverable? Managers might have one of either two concerns about the practice of working from home: are employees working too little (and reporting too much) or are they working too much (and reporting their usual hours, which is thus too little)?

A 2013 Stanford University study found that telecommuters actually are more productive than those in the office because they took fewer breaks, needed less time off, and didn’t take as many sick days. Plus, workers said that they were more productive because they felt more comfortable at home and there was less distraction from chatty colleagues. As a bonus, home workers reported that they were more satisfied with their work and they felt more positive about their jobs overall.

The negative side of working from home, according to the study, was that the work was not visible, and so teleworkers were less likely to earn promotions in recognition of their work.

From here, the big question then becomes about how productivity can be measured. If hours don’t necessarily equate to results (because the employees have flexibility in achieving those results), then how do we measure work? With the emphasis moving from hours worked to achievements per day, is that the basis for how employees should be paid? What is an effective alternate unit of measure? In a roundtable discussion, DATABASICS Director of Business Analysis Torbjorn Nilsen suggested a $1 billion opportunity: a sharing economy resource management solution, “a system that allows you to plan and manage progress against that alternative unit of measure.”

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