This is the second entry in a five-part series from the Madison Business Review. Check back for Part 3 next week.
Employers: Want to save money and boost productivity, workplace satisfaction and worker retention rates?
Have employees work fewer hours — an ocean of data and studies show it’s really that simple.
Conventional wisdom dictates that working more hours per week on average will lead to high productivity, as measured by gross domestic product (GDP).
To test this claim, the Madison Business Review conducted a data analysis of nominal GDP per capita by country from the International Monetary Fund’s 2019 estimates and average hours worked per week by country from the Organization for Economic Cooperation and Development (OECD) reviewed by 24/7 Wall St. in USA Today.
At a glance, the results may be shocking.
It’s commonly thought that workers in countries with shorter average workweeks enjoy better benefits like higher overtime pay and longer parental leave periods. Employees in countries without such benefits report lower life satisfaction ratings, according to surveys from the OECD.
But the Madison Business Review’s analysis found a relatively strong cross-sectional data correlation between fewer hours worked per week and higher nominal GDP output per person. In other words, countries with shorter workweeks are more productive, and vice versa.
This graph of average hours worked to nominal GDP per capita showed that, as the average workweek dragged on — shown by a horizontal move to the right — countries’ nominal GDP per capita tended to fall, reflected in a lower move vertically.
An optimal landing spot in this graph would be in the upper-lefthand corner, as that would indicate a short workweek and a high nominal GDP per capita mark. While GDP is an imperfect metric that doesn’t account for non-measurable production or under-the-table payments for cutting lawns, babysitting and countless other tasks, it’s a trusted tool for economists to gauge the size of economies.
This next graph illustrates selected countries’ rank in most hours worked per week and highest nominal GDP per capita. Again, countries that work fewer hours — reflected in a move to the right signifying a shorter workweek — tend to rank higher in nominal GDP per capita, which in this graph is lower vertically, as a smaller number — like No. 1 — means a larger GDP mark.
Countries would ideally be in the bottom-right corner of this graph, as that would reflect fewer hours worked and higher productivity through a nominally high ranking in hours worked and a nominally low ranking in nominal GDP per capita.
The three countries clustered in that bottom-right corner are Denmark, the Netherlands and Norway from right to left, respectively. Workers in those Northern European nation-states work 37 to 38 hours per week, on average, though the countries are No. 9, No. 11 and No. 3, respectively, in nominal GDP per capita.
It’s worth mentioning that correlation doesn’t equal causation, so the results of this analysis can’t necessarily lead to the conclusion that reducing hours worked per week will boost productivity per person.
A contrarian could argue that countries with long average workweeks and a weaker nominal GDP per capita number to show for it may be even worse off if the workers cut back their hours. There are additional complex factors at play that may not be fully measurable, but the data suggest a correlation between fewer hours worked and higher productivity, which is associated with a higher quality of life.
Ditching rigid workweeks for an “entrepreneurial mindset”
Normal, healthy hours worked per week varies greatly by country, as shown in the data, and by industry. It’s far easier and more practical to structure a standard 40-hour workweek for a teacher or nurse than for a lawyer or writer.
But there’s little doubt that more small businesses, especially those in creative industries, could shift from a rigid hours-per-week mindset to an entrepreneurial mindset, which often means ditching a clock-in, clock-out mentality. This shift maximizes efficiency by working employees when necessary and not giving them time off or a break when there’s not much to do.
The gig economy largely operates this way, as those project-based fields aren’t confined to a tight hours-per-week schedule. Their workday shrinks and grows as projects get done or arrive.
Employers who find creative ways to give workers time off will find it easier to get them in during crunchtime while keeping total hours worked reasonable fosters a productive, happy workplace.
In an ideal world, bosses should aim to find ways where workers would work on projects wherever or whenever they want, so long as the work gets done. That’s not possible in some fields, but it likely is in many, and the shift to videoconferencing in recent months is only making it easier.
Killing time theft boosts productivity
Time theft, defined as when an employee gets paid for time they didn’t complete work, is a massive costly problem that can largely be eliminated. Seemingly harmless habits like checking social media or calling a friend during work hours, not a break, is considered time theft.
Time theft takes 20% of all money earned by American companies, according to a study by the American Society of Employers cited by MITC Agencies.
Around 43% of American employees admit to stealing time, which affects 75% of businesses and costs them $400 billion annually, according to Software Advice, citing studies by the American Payroll Association. The same study found that the average time stolen is between 50 minutes and 4.5 hours per week, and 25% of respondents steal time 76-100% of the time.
It’s impossible to completely end time theft, but making time off predictable and required can abate much of the issue, Leslie Perlow and Jessica Porter of the Harvard Business School argue.
The two cite research from the Boston Consulting Group shows that planned, uninterrupted time off doesn’t hurt standards of service — it raises it by improving communication and making work more efficient and effective. Employees benefit from strict, predictable time off with higher satisfaction with their job and work-life balance, and employers gain quality, efficiency and higher retention rates, according to the study.
Simply put, forcing employees to work too much without regular time off kills productivity and is therefore counter-intuitive. For employees paid by the hours, it’s also costly for companies. The data analysis from earlier reflects the conclusion that increasing hours worked can backfire.
Does working more make a difference? Not always
Many believe working exorbitantly long hours, especially early in one’s career, will get them ahead. That may not be the case, according to research by Erin Reid, an associate professor at McMaster University in Ontario, Canada.
Employers often can’t tell who’s working more and who’s pretending to, Reid wrote in the Harvard Business Review.
In America, both men and women overwork and have lower satisfaction rates, Reid said, and — as a result — many devise creative strategies to do less work without their bosses knowing.
Surprisingly, bosses generally can’t tell who’s working 80 hours a week and who’s cruising by with 50. One colleague praised a senior manager called Lloyd as a “rising star” who worked “much harder than” he did, completely unaware that his co-worker had spent five workdays skiing in the last week alone.
Another team in the study created a shared agreement to travel little and work from home with reasonable hours. There was no penalty for this team, which was “one of the most successful parts of the company,” and most partners had “no idea” how little they worked. Meanwhile, men that asked for a reduction of hours were “marginalized and penalized.”
Perhaps the most important takeaway of the study is as follows: “A critical implication of this research is that working long hours is not necessary for high-quality work.”
It’s very possible for employees to reorganize work more efficiently, and ideally, companies will lead the charge for their workers to increase efficiency and worker satisfaction while decreasing shame and the negative stigma associated with making time for family in highly competitive industries.
Ignore outsiders, prioritize sleep
In the overworking epidemic, sleep is often seen as an afterthought for workers looking to advance in their careers. Such thinking is foolish, according to research published in the Harvard Business Review.
Staying awake for more than 18 hours in a row reduces reaction speed, focus, short- and long-term memory and decision-making capacity, the Harvard Business Review’s Bronwyn Fryer found.
Sleeping just five to six hours a night for consecutive days compounds and amplifies those harmful effects and hurts job performance. Running on too little sleep hurts workers and is “every bit as risky as intoxication,” according to Charles Czeisler, a professor of sleep medicine at Harvard Medicine School.
But in America, an often toxic culture of overworking — especially among young people — leads some to mistakenly believe that sleeplessness reflects high performance and dedication.
Once again, evidence shows workers and bosses should learn to work smarter — not just harder.
It’s the difference between trying to ram one’s way through a wall head-on and pausing to take a second to realize it’s easier and less of a headache to walk 10 feet to the side and go around it.
James Faris is a senior media arts and design major. Contact James at firstname.lastname@example.org.