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    Technology

    How AI will accelerate the end of the 5-day week 

    by Michael R. Wade Published 6 July 2023 in Technology • 6 min read

    Experiments with different working patterns have been hit and miss, but the potential of generative AI offers a radical new way forward for productivity, employment, and employee happiness. 

     On 1 May 1926, Henry Ford took a radical step that divided opinion in the fast-growing automotive sector. Industry peers regarded his move with derision and skepticism. His five-day, 40-hour work week – first for factory workers, then for office staff – came at a time when many employees worked 12-hour days, six or even seven days a week. Yet within two decades it had become the norm. 

    The benefits of the five-day working week were apparent: higher employee morale, satisfaction and retention, lower absenteeism. Predictions of lower factory and office productivity did not come to pass. Efficiency increased. More recently, as the pandemic has caused us to reexamine working patterns, some have suggested it’s time to change the default model once again, this time to a four-day week. But the experiments to date have been unconvincing. 

    Generative AI (GenAI) could change all that. 

    It has become abundantly clear over the past six months that GenAI will have a significant impact on knowledge worker productivity. A recent study indicated that 72% of executives believe that AI will increase employee productivity across a wide range of tasks. An MIT/Stanford study estimated that AI tools like ChatGPT can increase productivity by an average of 14%, while a Goldman Sachs study put the estimate at 25%.  

    Organizations can take advantage of this in two ways: 

    1. Do the same with less: Since organizations will need fewer employees to complete the same amount of work, they could cut employees.  

    2. Do more with the same: Organizations could add more work to existing employees.  

    “His five-day, 40-hour work week – first for factory workers, then for office staff – came at a time when many employees worked 12-hour days, six or even seven days a week. Yet within two decades it had become the norm. ”

    While the implications for productivity across both options are positive, there are downsides. ‘Same with less’ could lead to mass unemployment, resulting in significant societal discontent. ‘More with same’ could lead to increased employee stress and discontent.  

    However, GenAI could also lead us to another Henry Ford moment, one that could have multiple benefits, including: 

    1.Leveraging the productivity improvements of GenAI, while 

    2. Maintaining employment at current levels, and  

    3. Ensuring that employees are happier and more fulfilled, and 

    4. Providing significant benefits to society.

    Reimagining the five-day work week 

    If we assume that productivity improvements will net out at 20% for knowledge workers, then workers could complete five days of work in four days. Perhaps we could implement a four-day work week?  

    Let’s take a look at those recent experiments. A large trial in the UK found benefits to worker sleep, stress levels, and mental health. Fifteen percent of employees stated that no amount of money could convince them to go back to a five-day working week. Retention skyrocketed. How was performance impacted? Revenue was found to stay the same. After the six-month trial, 90% of companies in the study planned to maintain the four-day work week structure. 

    Other experiments with a four-day working week in Belgium, New Zealand, and Iceland found similar positive results. A US study in 2019 found that 24,000 or 26,000 employees favored a reduced work week even if they had to work the same number of hours over fewer days. 

    Arguments against a four-day week cite a number of concerns, including reduced competitiveness (if we do this and our competitors don’t, we’ll be at a disadvantage), higher costs (it’s going to cost a lot to implement and manage), excessive idealism (come on… we have to run a business here), and impracticality of implementation (we can’t just close down for a day a week).  

    Because of these arguments, few four-day work week schemes have taken off at scale. 

    The four-plus work week 

    Generative AI has given us the gift of productivity, but it would be wasted if it were to lead to productivity improvements alone.  

    Imagine if the fifth day were split into two equal parts. The first part would be given back to the employee. Data from the four-day week experiments show that participants enjoy more fulfilling lives when they have more time for personal interests like spending time with family, pursuing hobbies, and so on. 

    We call this the four-plus work week, and the advantages of the scheme are obvious

    The second part would be given back to society through a variety of mechanisms such as volunteer activity, support for social causes, community outreach, environmental causes, as well as learning and retraining for new skills. The ‘plus’ component would be mandatory, but people could choose the type of activity they pursued. Think of it like school electives: you need to take them, but you can choose which one to take. 

    We call this the four-plus work week, and the advantages of the scheme are obvious.  

    Governments could mobilize more of the population for civic improvement projects like land beautification and environmental improvements. Jurisdictions that pursue four-plus policies could attract more people to live and work within their borders. The ‘plus’ projects could lead to an enhanced sense of community and citizen satisfaction. Four-plus policies should lead to reduced job losses and thus less of a financial burden on welfare schemes. 

    Organizations could benefit from more satisfied, less stressed employees. Based on study data, worker productivity should remain constant. While competitors might use GenAI to increase productivity by adding workload to existing employees, proactive organizations could use the four-plus work week as a tool for attracting and retaining talent.  

    Individuals would benefit from more personal time to balance increasingly complex lives. More than this, however, they would get a sense of purpose and satisfaction from working on projects that benefit society and the greater good. Perhaps this would come as a pleasant surprise to some of them. 

    Imagine Claudia, a working mother with three children, aged four, eight, and 12. She enjoys her work as an accountant at a global consumer goods firm, but struggles to balance the demands of work with her increasingly busy family life. Her four-year-old daughter spends every day at a local day care, her eight-year-old son plays soccer and basketball after school, her 12-year-old daughter, who has a learning disability, spends two days a week at a special needs school. Claudia’s mother is becoming increasingly frail, has stopped driving, and is struggling to cope with day-to-day activities. Claudia, with support from her husband, ferries the children back and forth between school and other activities, and supports her mother, but often has to miss important events and meetings. 

    if we reframe the conversation away from employment and towards employees, we can see that the benefits to people and society can be significant. 

    In a four-plus work week, Claudia has more time to take care of her family. With support from the local department of education, she has started a three-month program to volunteer at the special-needs school that her daughter attends. Prior to this, she worked on a project to revitalize a local salt marsh that had become polluted. 

    The AI tools at work have ensured that she can cover her previous accounting duties in much less time. In fact, she accomplishes more in four days than she used to in five. With the extra time for her family and friends, she feels happier and less stressed. The plus projects she participated in exposed her to a new set of acquaintances and given her a sense of pride in helping the community. 

    Refocusing on workers rather than work 

    Much of the discussion around the impact of AI on employment has focused on job losses. But if we reframe the conversation away from employment and towards employees, we can see that the benefits to people and society can be significant. 

    In a world where more productivity and more wealth have not necessarily led to more happiness, and almost 100 years after Henry Ford revolutionized employment by introducing the five-day work week, GenAI’s introduction of the four-plus work week has enabled us to create another pivotal shift for work – and for workers.  

    Authors

    Michael Wade - IMD Professor

    Michael R. Wade

    TONOMUS Professor of Strategy and Digital

    Michael R Wade is TONOMUS Professor of Strategy and Digital at IMD and Director of the TONOMUS Global Center for Digital and AI Transformation. He directs a number of open programs such as Leading Digital and AI Transformation, Digital Transformation for Boards, Leading Digital Execution, Digital Transformation Sprint, Digital Transformation in Practice, Business Creativity and Innovation Sprint. He has written 10 books, hundreds of articles, and hosted popular management podcasts including Mike & Amit Talk Tech. In 2021, he was inducted into the Swiss Digital Shapers Hall of Fame.

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