Utah's Four-Day Work Week

One of the article discussion assignments I received from this year's MBA class dealt with the four-day work week.

As you may know, over the summer Utah Governor Jon Hunstman announced that state agencies would henceforth be open only four days per week. Rather than five eight-hour days, state employees are now asked to work four ten-hour days. The idea is so save energy and commuting time.

One of the most interesting things about this to a human resources economist has been watching the reactions.

One the one hand, we saw some state employees complain bitterly about this. On the other hand, some people who don't work for the state were completely mystified by the state-employees' complaints.

I'm paraphrasing here, but some state employees said "You're wrecking my life! Now I need ten hours of day-care!"

Some folks who don't work for the state said they'd love it if every weekend was a three-day weekend, and so state employees should stop whining.

The economic point that's illustrated here is self-selection.

What does this mean? First, note that individuals all have different preferences. Some of us like three day weekends. Others like eight hour days and longer work weeks.

Second, note that employers offer different bargains to their employees. Some employers offer lots of flexibility in scheduling. Others don't. Some employers offer a job where there's never any overtime. Other's don't. Some employers offer lots of vacation time. Others don't.

So which employees work where? Well, generally speaking employees are going to try to find the employers who offer a bargain that they like. Many people are willing to accept somewhat lower wages in order to get other workplace features that they like. So employees are trading off wages with other workplace features, and also trading off workplace features against each other. Employees self-select; that is, they choose where to work based in part on the job characteristics that an employer offers.

What does this mean for the four-day work week? Let's think about what sort of job characteristics the state was offering prior to last summer. State work is steady (obviously I'm generalizing here, but go with it). There's not much of a chance at overtime. Employees come at 8 and leave at 5. It's not the sort of job where there are going to be a lot of work-related intrusions into personal life. Some people really like that, and so we'd expect the state's work force would be disproportionately composed of people who value that sort of predictability.

So it's no surprise that such a sharp shift in hours would lead to problems.

The more general lesson for management is that employees are going to self-select to any workplace feature you offer. As a result, your employees are going to like any feature you offer much more than the average person likes that feature.

To give a concrete example, suppose some people really like three-day weekends and some don't. If your firm offers three-day weekends every week, then your firm is going to attract a workforce of folks who really value the long weekends. This effect makes it hard to change workplace features once your workforce has self-selected to them. If your workforce signed on specifically because they want a three-day weekend, they're going to be really mad if you change --- much more so than a randomly selected person would be.

This gives rise to a sort of inertia in workplace features.

This sort of self-selection is actually one of our best recruiting tools for faculty at the David Eccles School of Business. For the most part, our school pays below-market wages. That is, many of our faculty could earn a higher salary at working at another university. So why do faculty stick around? Many professors really value the workplace features. And by workplace features I mean things like proximity to world-class outdoor recreation, or proximity to the LDS community.