How do you improve staff productivity, encourage people to stay with the company, and take less time off sick?

The obvious answer might be to give employees a bigger pay cheque. But insurance business Freedom Services Group has discovered that time is just as important a motivator for achieving the above.

By introducing a four-day week for the same pay as five days, the company has given its 228 employees more autonomy – or freedom – about how they work. Part-time staff have also been given reduced hours for the same pay.

“Staff love it,” says Chantel Emilius, Freedom’s Executive Director of Culture & Engagement, proudly. “We give everybody in our organisation the choice of where they want to work. The four-day working week gives them that extra control in their life and wellbeing, which is critical to our success.

“Our attrition dropped from 31% to 2.6%, and when we asked new staff why they’d chosen us over other insurance firms, everybody said that the four-day working week was progressive and the right culture.

“Other insurance companies have taken a step back. Now lockdown should have told them that people could work from home and still get results. You don’t have to micro-manage people in an office.”

And it’s certainly boosted the company’s financial performance, with an EBIT of over £5 million last year, 500% up on 2021.

Better productivity and wellbeing

Freedom Services’ new working model – it had already embraced hybrid working – started as a six-month pilot, beginning in July 2022. Emilius was initially inspired by reports from Scandinavia about how a shorter working week was better for both the bottom line and people’s productivity and wellbeing.

CEO Andrew Tailby backed the initiative, having seen the benefits first-hand while working as a consultant for a plating and polishing company. “They were looking to improve productivity in what is hard physical work and also difficult and dirty,” he recalls. “When I suggested moving to a four-day week, the board just laughed at me.”

However, the company agreed to shut down operations on a Friday and open on Saturdays, on a voluntary basis, paying extra to those that went in. As a result, the lead time dropped from 16 weeks to seven, and the company recruited more staff.

Tailby adds: “It worked beautifully well for everybody. You’ve just got to think very carefully about the industry that you’re in, how it affects customers and whether it’s going to put people into a detrimental situation.”

Rota system

One of the early learnings in the Freedom Services trial was that Friday was the favoured day off for most people, making some support departments difficult to contact. In contrast, the operational departments worked on a rota basis. This has since been expanded throughout the organisation.

“We give them a 12-week rota so they know well in advance what day they’re going to have off so that they can plan things,” Emilius explains. “We want it to be fair across the board so that everybody has the opportunity to have X number of Fridays and Thursdays off.”

In the months leading up to the trial, she was heavily involved in setting out key performance indicators (KPIs) to track productivity and measure success. “Operational areas’ productivity went up by over 12%, which was fantastic,” says Emilius.

“Our back-office support teams have more fluid KPIs because they’re not on the phone daily. But they said it gave them time to reflect, prioritise and have more of a strategic focus.”

Working smarter

Overall, staff have been inspired to work harder and smarter. But what does working smarter mean? “One of the guys said it best,” offers Tailby. “When I asked him that question, he said that every week he comes into work feels like the week before going on holiday because he gets so much more done.

“There’s certainly an urgency about getting things done quickly, and I’ve noticed that people don’t hang around anymore. There’s a great deal of peer pressure of ‘if you don’t do your job effectively, I can’t do my job effectively, so hurry up’.

“I think everyone realises that, unless they work together as a team to become more effective, there’s a chance that the four-day week will return to a five-day week, and nobody wants that.”

Asked if the four-day week meant a change in the company’s culture, he points out that any organisation that needs to generate a profit to stay in business and serve customers must have a fundamental commercial culture.

He adds: “As a chief executive, there are three things that I could influence and change: thoughts, feelings, and behaviours.

“Now, as a previous industrial psychologist and psychotherapist, I know it’s more challenging to manage peoples’ thoughts and feelings. But as the CEO, I’m actually paying for their behaviours.

“For example, if someone is exceptional with customers and goes that extra mile, I will reward that behaviour. But if someone doesn’t care about customers, then I’m going to take action in a different way.

“We can insist on the core behaviours that people exhibit and demonstrate. Then that starts to embed into the culture, and when new people join us, they are clear on what they have to do. Changing a culture isn’t easy because it’s not about hearts and minds – this is where people go drastically wrong – it’s about behaviours.”

Taking control

The new working model is optional; surprisingly, 15% of employees decided not to take it up. In particular, the sales team saw it as taking away 20% of their opportunity. Instead, they started working longer hours, including Saturdays.

Tailby believes their reaction was “a realisation they were in control of their destiny within the business. We weren’t telling them what to do anymore but giving them enormous autonomy and responsibility in the job.”

Based on the Freedom Services experience, Emilius strongly recommends that other companies wishing to implement a similar model consider a rota system. She says: “Some organisations can completely shut down on Friday, but others, where you have to keep a production line going or your phone lines open, need to have a shift rota.”

Having KPIs was also essential to encourage people to take on personal responsibility. These would become self-regulated over time.

Ultimately, it was about taking a leap of faith and embracing new ways of working. The COVID-19 pandemic and lockdown have shown that the old nine-to-five has become archaic. Hybrid working and shorter weeks were better for the health of employees and the bottom line.