When Will the Four-Day Workweek Come to the Global South?

The wellbeing of employees continues to deteriorate as the world enters the third year of the COVID-19 pandemic, forcing companies to continue exploring new mechanisms to boost morale and retention. The latest emerging trend involves condensing the workweek into four days for equal pay, as more companies champion its implementation dissecting the conditions that led to its expanding implementation becomes worthwhile

“The four-day week challenges the current model of work and helps companies move away from simply measuring how long people are ‘at work,’ to a sharper focus on the output being produced,” said Joe O’Connor, Program Manager, 4 Day Week Global.

The past two years have been a learning experience and transformational period for company human resource departments, which have been challenged with maintaining company productivity while remaining empathic to stresses produced by the COVID-19 pandemic. The immediate solution many companies arrived at was implementing more flexible work conditions such as remote and hybrid work solutions. The success of these models demonstrated to employers and employees alike that the traditional office 9 to 5 model was outdated and inefficient. This realization prompted companies to take a closer look at other internal processes such as work culture expectations, management style and its employee-value proposition. As more companies explored retention and attraction strategies outside of the norm it has become clear that the traditional top-down work model and singular remunerative incentive had become a standard of the past.

From here on out, companies will have to put in effort to communicate and identify how they can add value and impart a sense of shared purpose, also known as the “emotional salary,” said Maite Delgadillo, HR Director, Scania, during MBN’s 2021 Talent Forum. 

Despite these mitigating efforts the initial hardships of the COVID-19 pandemic remain, which along the way have inflamed the creation of secondary grievances such as burn out, depression and inflation. These cumulative pressures have led to a mass exodus from the labor market. “The Great Resignation” is a phenomenon that has amplified turnover rates and created an increasingly competitive labor market, forcing companies to compete for talent and develop creative attraction and retention strategies. The latest consideration, as it builds traction, is switching from the standard 40-hour work week to a 32-hour work week at the same earning rate. The idea, while more than two centuries old, has remained largely ignored until now.

There have only been a handful of companies to permanently adopt the four-day workweek model, an operational decision that has been borne out of health concerns, improving work-life balance and or greater performance indicators. Regardless of their motivation, companies have apparently realized its potential, as reflected by the string of announcements sharing either its continuation or its full adoption throughout 2021. Such companies include Reboot, a UK based SEO company that made the final decision following a 702 percent increase in results and output. Tech companies' Radioactive PR and Software SELSOL found they were able to reduce turnover rates, which respectively stood at 69.4 percent and 30 percent at its peak.

Crucial Socio-Political Divergences

Now, as the New Year kicks off, MNC Panasonic and fintech unicorn Bolt have both announced that they too would be implementing a four-day work model; thereby indicating that the movement has begun to gain traction with industry leaders. Notably, however, the majority of the companies making the move are from the Global North, where people have access to social welfare programs, organizations contend with talent deficits and federal governments offer political support. One of the most progressive proposals was made by Spain, which announced a voluntary, nationwide, three-year trial in March of 2021. Since then, other countries have followed suit with New Zealand, Finland and Japan suggesting its adoption as a productive mechanism amid the pandemic.

Most of the countries in the Global South, however, lack the important socio-political conditions that have moved companies to pilot this work model, specifically a robust social welfare system and talent deficit. In Mexico, at the direction of President Andrés Manuel López Obrador, the country has taken a stance of fiscal austerity which has resulted in limited financial assistance, budget cuts and the dissolution of public serving institutions. These outcomes have coalesced to push almost 4 million more people in to poverty and an additional 2.1 million into extreme poverty. With no recourse, people have seen themselves obligated to return to the workforce, which in turn has pushed down unemployment to its lowest point since the COVID-19 pandemic began.

Moreover, as reflected by federal law, the federal government continues to support 48 hour, six-day workweeks—well above its counterparts in the Global North. Although private industry in Mexico has largely deviated from the federal standard, outliners remain, mainly in the manufacturing sector. This is evidenced by an OECD report which found that Mexicans work the longest hours, spending an average of 2,255 hours at work per year for an average of about 43 hours per week. This average far exceeds Japan’s annual average of 1,713 hours, a surprise in light of the country’s reputation for having a workaholic culture. Unsurprisingly, these working expectations have contributed to one of the worst global rates of work induced fatigue, estimated to afflict about 75 percent of Mexico’s working population.

“In Mexico, there is still a lot of ground to cover. Up to 85 percent of corporations might not offer the optimal conditions to take care of their employees, generating toxic environments to work and causing social disorders such as stress, work addiction, fatigue or even bullying,” said Cardona Mora, Co-founder and CEO, 1DOC3, during MBN’s 2021 Talent Forum.

Mexico lacks the socio-political conditions to incentivize companies to make the transition to a four-day workweek. With no initiative at the federal level and a plentiful talent pool to choose from, there is no real motivation for companies to adopt the four-day work model for the immediate future. However, foreign influence has a long history of driving institutional changes in Mexico’s business culture, best exemplified by a sudden prioritization of cybersecurity standards now required in international contracts. This would require companies abroad to undeniably prove that the benefits of a four-day workweek considerably outweigh the customary productivity of 40-hour workweeks.