Germany Gives Nod to Four Day Work Week, Will Bold Experiment be Successful?

Work Week Germany: Germany is poised to embark on an experimental phase in its efforts to revitalise its flagging economy as numerous enterprises explore the benefits of reduced work hours. Hundreds of workers will receive a weekly day off with full pay under a six-month programme that begins on February 1. The purpose of the study is to determine whether labour unions' claims that it may make employees happier, healthier, and more productive are accurate.

Investments in 'New Work'

"Investments in 'new work' pay off because they boost motivation and well-being, which in turn increases efficiency," stated Sören Fricke, co-founder of Solidsense, an event planner and one of 45 participating companies, in regards to the trial. "If the four-day workweek is successful, it won't end up costing us anything either."

The project highlights a more general change in the German labour market, where businesses are under pressure to hire more competent workers due to a shortage of available labour. Employees in all industries now feel more empowered to demand pay raises and protect the flexibility and freedom they acquired during the pandemic as a result of the shortage and high inflation.

German Employers Experiment with Four-Day Workweek

In an attempt to gauge potential productivity advantages from working fewer hours, about 45 German employers are testing a four-day workweek. Worker-employer conflicts are being exacerbated by the imbalance. Train drivers in Germany are presently on a six-day strike, demanding that Deutsche Bahn reduce the workweek from 38 to 35 hours without lowering wages. A measure that some economists fear could fuel inflation is the country's construction union's demand for a wage increase of more than 20% for many of its 930,000 members.

German Businesses Struggle to Fill Open Positions

A poll conducted last year by an industry organisation revealed that half of German businesses are at least partially unable to fill open positions. Software behemoth SAP SE discontinued requiring candidates to have a university degree in 2022, but real estate company Vonovia SE hired individuals from Colombia last year to fill the void. And things are only going to get worse: by 2035, almost 7 million Germans are predicted to be out of the labour force due to low birthrates and immigration, which will not be enough to replace the country's ageing population.

Strategic Choice for Modernization

“I can either get involved and position myself as a modern company, or I can say that we all have to work more and at some point I won’t have anyone left to work for me,” said Henning Roeper managing director of the program-participating window manufacturer Eurolam, situated in Wiegendorf.

Additionally, disgruntled employees bear a high expense. A recent Gallup survey estimates that last year's low engagement cost the world economy €8.1 trillion ($8.8 trillion). That represents 9% of the GDP of the entire world.

4 Day Week Global's Productivity Paradigm

According to New Zealand-based non-profit 4 Day Week Global, which is spearheading the trial, staff should maintain or even boost their output throughout the experiment even if they work less hours for the same income. In addition to the increase in output, businesses should see a decrease in expensive absences from work resulting from illness, stress, and burnout. Germans missed an astounding €207 billion in value added due to their average 21.3 days of unavailability from work in 2022, according to the Federal Institute for Occupational Safety and Health.

Untapped Talent Pool

In addition, proponents of the four-day workweek contend that it would draw untapped talent to Germany's labour market, which, according to Eurostat, has one of the highest rates of part-timers in the EU, particularly among women.

Despite having by far the largest economy in Europe, productivity increases have been hampered by a lack of investment in innovation and digitization. Enzo Weber, an economist at the Institute for Labour Market Research in Nuremberg, believes it's improbable that German workers would experience a large productivity rise just by cutting back on hours without improvements in those areas.

Political Critique by Free Democrats Party

A member of the business-friendly Free Democrats Party, Christian Lindner, the minister of finance, has criticised the shortened week more sharply, claiming that it will jeopardise economic progress and prosperity in Germany. However, prior US and Canadian tests indicate that increases may be achievable, according to 4 Day Week Global. Participating workers saw a decrease in burnout and an improvement in their physical and mental health. None of the participating companies intended to go back to a five-day workweek after the study.

International Validation

Similar results were shown in the UK programme, which was the largest to date with 61 participating organisations. Among the benefits was a 65% decrease in sick days. Anxiety and sleep issues decreased by about 20% in Portugal. The participating employees intend to supply hair samples and data from fitness trackers in order to more precisely assess stress levels, and the German companies are expecting for similar results.

Belgium's Progressive Four-Day Workweek

In 2022, Belgium became the first nation in Europe to allow four days a week, provided that the total number of hours worked per week did not change from that of a five-day week. Japan thinks that by encouraging firms to offer shorter work weeks, individuals will take advantage of the extra time to spend money and have children, which will help the country's ageing population and economy. To achieve the results, according to Jan Bühren, co-founder of Intraprenör, a Berlin consultancy working on the pilot programme with 4 Day Week Global, the companies must be adaptable and creative.

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