When he first heard about the five-hour workday, David Rhoads thought: I want to give this to my employees.
David is the CEO of Blue Street Capital, a California-based company that arranges financing for enterprise IT systems. He’s also an avid surfer. So when he saw an article about how Tower Paddle Boards – an online, direct-to-consumer company that sells stand-up paddleboards – had moved to a five-hour workday, he was intrigued.
Stephan Aarstol founded Tower in 2010. Stephan was convinced that they could use the same technologies to change how his company worked, not just how it reached consumers. If they focused on their most important tasks, cut out distractions and used technology to automate routine tasks and make their hard jobs easier, he thought, they could dramatically improve their performance – and give him more time for surfing.
So in June 2015, Stephan offered his employees a deal: if you figure out how to do the same work in less time, you can keep the same salary and leave at 1pm. He also implemented a 5% profit sharing plan, further increasing people’s hourly pay.
The day they announced the change on their website, Tower broke its previous daily sales record and booked $50,000 in sales for the first time. By the end of the month, they had sold $1.4m worth of paddleboards, breaking their previous monthly sales record by $600,000.
You couldn’t find two products more different than bespoke financial deals that fuel high-tech investments and surf equipment inspired by Polynesian sailors, but David Rhoads started thinking about whether a shorter workweek could be implemented at Blue Street Capital too.
After a couple “brutal” quarters, he was looking for ways for the company to improve and start taking on challenges again, rather than just responding to them. He had dedicated workers, but “if we took out our breaks, took out our lunch, and took out all the [unproductive] nonsense that we do over the course of the day,” he thought they could compress the workday to five hours. They’d need to figure out how to keep customers happy during a shorter workday – companies depend on Blue Street Capital to help them finance mission-critical upgrades or expansions, and every deal is different so his employees spend a lot of time on the phone to clients – but he was sure they could figure it out.
“We knew it would be a huge productivity tool for the business,” David says, “but we also knew we were going to get part of our lives back.”
David announced the plan at an all-hands meeting. “I want you to have the lifestyle that I have,” an employee recalls him saying, “and I believe that you’ll be as successful as I am or more successful as a result.”
He answered a few questions. No, salaries wouldn’t be cut. No, the company wasn’t about to go under. Yes, the new schedule would become permanent after 90 days if productivity remained the same and if customers didn’t complain. Summer was a slow period at Blue Street, so it was a good time to start a trial.
A single quarter wasn’t enough time to see a big change in revenue – in contrast to Tower Paddle Boards, Blue Street Capital has a long sales cycle – but after three months David could measure the impact of five-hour days on their leading KPI (key performance indicator), the number of calls per salesperson. More calls means more business: working the phones, staying in touch with clients and pitching to new customers is essential if people are going to meet their sales targets and the company is going to grow.
What did he find? When they cut the length of the workweek by three-eighths, calls per person … actually doubled.
David made the new schedule permanent after three months, and Blue Street has operated on an 8am to 1pm schedule ever since. After three years, revenues have gone up every year – 30% the first year, 30% the second – and the company has grown from nine to 17 employees.
Few things sound more southern California than “Let’s shorten the workday to have more time to surf!” But shortening the workday to boost productivity and improve the company? That’s pretty counterintuitive. We live in a world in which business operates 24/7, the global economy never stops and competition is relentless.
Yet in the last few years, hundreds of companies in a variety of industries around the world have followed the same path as Tower Paddle Boards and Blue Street Capital: they’ve shortened their workweeks without cutting salaries, lowering productivity, sacrificing quality or driving away clients.
And we really need to improve work. A century ago, the philosopher Bertrand Russell and the economist John Maynard Keynes argued that by 2000 – eight decades in their future and two decades in our past – we could all be working as little as three or four hours a day. In Russell and Keynes’s lifetime, technology, labor unions, rising educational standards and greater prosperity had reduced the length of the average workday from 14 to eight hours a day. They thought that as technology continued to advance through the 20th century, productivity could continue to rise, economies could continue to grow and working hours could fall further.
But Russell also warned that while “modern methods of production have given us the possibility of ease and security for all”, if productivity gains and profits were hoarded by factory owners, executives and investors, those same advances could be used to create a world that offers “overwork for some and starvation for others”.
That’s not a bad description of work today. In the United States, working hours have barely fallen since the second world war, despite enormous productivity gains and economic growth. The rise of Silicon Valley in the 1980s brought with it a new model of work and success that glamorized long hours, made workaholics into heroes and turned overwork into a badge of honor. As a result, we now live in a fast-moving, unstable world in which overwork is a source of riches for some and a necessity for survival for the rest.
But this way of working is costly for individuals, for companies and for economies. The human cost of overwork and burnout – in lost earning potential, happiness and creativity – is huge. Overworked people suffer from higher rates of chronic disease and depression. The Stanford business professor Jeffrey Pfeffer argued recently that the health costs of badly designed workplaces make work as significant a health hazard as smoking.
Overwork is also counterproductive for companies. Overworked or burned-out employees are actually less productive than well-rested workers. They’re also less engaged at work, more likely to leave and even more likely to cut ethical corners or steal from the company. Employee burnout costs the global economy an estimated $300bn a year in sick days and lost productivity.
And, even in countries where formal workplace discrimination ended decades ago, long hours make it difficult for women to manage the demands of bosses, professions and family, and to maintain their careers after they become parents.
Workers are caught between a present that feels unbalanced and unsustainable and a future full of uncertainty, disruption and inequality. Small-scale solutions to these problems are no longer enough. We need bigger, more holistic approaches that help fix today’s problems and offer a better future.
The shorter workweek offers a solution to all these problems – the culture of overwork, gender inequity, and unequal division of economic gains, and the massive indirect costs of burnout and shortened careers.
Rest is not work’s competitor; it is work’s partner. In today’s always-on, globally connected, 24/7 world, it’s easy to think that overwork is inevitable and inescapable. It’s not.
Excerpted from Shorter: Work Better, Smarter, and Less – Here’s How, by Alex Soojung-Kim Pang. Copyright © 2020. Available in the US from PublicAffairs, an imprint of Hachette, and in the UK from Penguin Business
Alex Soojung-Kim Pang is the founder of Strategy and Rest, a visiting scholar at Stanford University, and the author of Rest and The Distraction Addiction