Key takeaways
Evidence from trials in the UK, US, Iceland, and parts of Australia shows that a four-day workweek can boost productivity, reduce stress, and improve retention without hurting profits.
In fact, 90% of UK companies that tested the model stuck with it a year later.
Compressing the workweek forces organisations to streamline.
Meetings get shorter, processes become leaner, and automation finally gets prioritised. When time is scarce, inefficiencies are exposed — leading to smarter, not harder work.
While the model suits knowledge-based industries (like finance, tech, and real estate), it’s impractical for sectors like healthcare, education, and retail, where productivity depends on physical presence. For many frontline roles, hours can’t simply be compressed.
The most successful approach has been the 100–80–100 principle — 100% pay, 80% hours, 100% productivity.
Australian companies such as Unilever and Medibank are testing this framework, with early results showing stable output and happier teams.
The four-day week isn’t a cure-all, but it’s becoming a powerful retention and recruitment tool in tight labour markets.
Imagine a world where Australians could work just four days a week, without a pay cut, without a drop in productivity, and still deliver the same results.
It sounds too good to be true, doesn’t it?
Yet mounting evidence from around the world shows that the four-day workweek isn’t just a feel-good idea; it may actually be good for business.
Trials in the UK, the US, Iceland, and even parts of Australia suggest that shorter workweeks can boost productivity, reduce stress, lower staff turnover, and improve wellbeing, all without hurting the bottom line.
But the big question is: can it really work here, in Australia’s unique economic climate, where we’re facing chronic worker shortages, rising costs, and slowing productivity growth?
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A radical idea in an age of worker shortages
In our latest episode of the Demographics Decoded podcast, leading demographer Simon Kuestenmacher admits he was once a sceptic.
“In an environment where we’re running out of workers, it seems really bold to call for reduced hours,” he said. “Traditionally, when we face labour shortages, we work existing staff to the bone. The four-day workweek is the polar opposite of that.”
But after reviewing global trial data, Simon changed his tune.
In the largest trial to date, a UK study involving 61 companies yielded eye-opening results.
“A year after the trial ended, 90% of those companies were still running a shorter workweek,” Simon explained. “They obviously wouldn’t stick with it if it wasn’t working. These are profit-driven entrepreneurs.”
That statistic alone should make any business owner pause.
Because if productivity can stay the same, or even improve, with fewer hours, the potential benefits to employee health, retention, and engagement are enormous.
How can less work lead to more output?
It’s counterintuitive, but the answer lies in pressure and focus.
As Simon put it:
“This limiting, compressing of time somehow creates enough pressure for an organisation to do the hard work of optimising workflows.”
When time becomes a premium, inefficiencies suddenly stand out.
Meetings become shorter and more purposeful. Redundant processes are streamlined.
Automation that’s been “on the to-do list” for years finally gets implemented.
Simon pointed to some compelling examples — not just in office settings, but even in manufacturing.
“A US motorhome plant moved from five days to four and kept productivity the same,” he said. “And a brewery in London managed to maintain full production by rotating staff more efficiently.”
The four-day workweek, in many ways, forces businesses to confront inefficiency, something every leader knows exists but rarely has the motivation to address.
But it’s not a universal solution
Of course, it’s not all sunshine and long weekends.
The four-day work week doesn’t fit neatly into every industry.
Healthcare, for example, remains a challenge.
“You can’t cover the same number of shifts without more staff,” Simon noted. “Even if patient care improves, which it did in some Swedish hospital trials, the model becomes unaffordable when you already can’t hire enough nurses.”
The same goes for education and retail.
You can’t teach a classroom or run a supermarket checkout “more productively” in fewer hours. Some jobs simply require presence, not just output.
Simon summed it up nicely:
“It’s probably not for everyone, but it’s an option for more businesses than we thought. And in a tight labour market, it’s a powerful retention tool.”
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The 100–80–100 Model: a simple but powerful framework
The model that’s gaining traction globally, and now in Australia, is the 100–80–100 principle:
- 100% pay
- 80% of the hours
- 100% productivity
“It’s a promise from workers to deliver full productivity,” Simon explained, “and from employers to pay in full for 80% of the time. It’s a two-way deal.”
Major Australian companies, including Unilever, Medibank, and Our Tree, have begun trialling this model.
Early reports are encouraging, showing stable or improved performance and higher employee engagement.
But Simon warns against governments mandating it:
“Part of the magic is that it’s not the norm. If it becomes mandatory, the incentive to put in extra effort might fade.”
What would it mean for Australia?
Australia’s workforce dynamics are unique.
We’re facing an ageing population, a shrinking labour supply, and a rising demand for care and service roles that can’t easily be compressed into fewer hours.
Simon points out that some of the country’s largest job sectors, retail, teaching, and healthcare, simply can’t benefit from reduced-hour models.
“You can’t make a supermarket worker or a teacher 20% more productive just by working smarter,” he said. “Their productivity is tied to time on the floor or in the classroom.”
But for knowledge-based sectors, finance, technology, consulting, design, and even real estate, the model could be a game-changer.
It could attract top talent, improve work-life balance, and cut turnover costs in industries where human capital is everything.
And there’s an economic upside too.
With an extra day of leisure, people spend more on travel, dining, entertainment, and family activities.
That means more money flowing through the economy, more small businesses benefiting, and a boost to local consumption.
A competitive advantage, not a cure-all
We shouldn’t think of the four-day work week as a silver bullet.
It’s not a universal policy; it’s a strategic tool.
Simon said it best:
“Providing a four-day workweek job will set you apart. It won’t be a majority thing, but it’ll be a competitive advantage if you can pull it off.”
In industries where attracting and retaining skilled workers is a constant battle, that edge matters.
Employers who offer flexibility, whether through hybrid work, compressed hours, or creative scheduling, will win loyalty.
Those who don’t risk losing their best people to those who do.
The bottom line
The four-day workweek might have started as what Simon called “Gen X’s dirty little fantasy,” but it’s no longer just a daydream.
It’s a data-backed, globally tested model that’s changing the conversation about productivity and wellbeing.
For some industries, it could be a revolution, delivering happier, healthier, more focused teams.
For others, it simply won’t fit.
But in a time when Australia is running out of workers and burnout is rising, perhaps it’s time to stop asking if it can work and start asking where it can.
Because, as the global evidence shows, less might truly be more.
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