For centuries, the traditional nine-to-five workweek has been the bedrock of modern employment. But is this outdated model still fit for purpose in today's fast-paced world? As the debate over work-life balance intensifies, companies and policymakers are increasingly exploring alternative work arrangements. Can shorter workweeks boost productivity and job satisfaction, or is the traditional model still the most effective?

A few years ago, Iceland conducted two experiments to understand the effect of shorter working weeks on productivity and work-life balance. The experiments had positive results, so the country introduced a shorter working week without cutting the salaries. Iceland is now reaping its benefits with its economy outperforming most European countries, according to a research released recently. 

Between 2020 and 2022, at least 51% of the public sector workforce had accepted the government offer of shorter working weeks. Iceland recorded faster economic growth than most European countries last year with low unemployment rate, according to the Autonomy Institute in the UK and Iceland’s Association for Sustainability and Democracy.

Between 2015 and 2019, two experiments were conducted in Iceland, especially in the public sector to understand the effect of shortened workdays. About 2,500 workers (over 1% of the workforce) were surveyed in the country. 

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The experiments were conducted across different types of workplaces to improve the work-life balance of employees and their families, provide more equitable worktime for males and females in paid work and at home, and reduce the difference in the hours usually worked in Iceland compared to other Nordic countries (Sweden, Norway, Denmark, Finland, among others), according to the report ‘On firmer ground: Iceland’s ongoing experience of shorter working weeks’.

The report analysed the results of an employment market survey conducted by the Social Science Research Institute (an institute at the University of Iceland) for the Ministry of Social Affairs and Labour and the Administration of Occupational Safety and Health, to understand job patterns, work environment, and the reasons why people left paid employment. 

Satisfaction with reduced working time

Reduced working time became widespread in Iceland with 59% workers offered reduced working hours, while 62% workers who opted for shorter hours were happier. Satisfaction with this working schedule was high, according to the survey. 

Further, international comparison shows that work hours reduced considerably across the course of the last decade and stood closer to other Nordic countries.

Shorter working hours helped them balance work with their private lives, with 42% felt that they experienced low level of stress. Work and private lives were in better harmony, which was the main purpose of the new reduced work hour arrangements. Over 95% respondents felt that their work-life balance had improved.  

Beneficial for women employees

The experiment was aimed at reducing the difference in working hours between women and men, and it was achieved with majority of women felt their work-life balance has improved. They were able to make use of the reduced hours at home. 

Labour productivity in Iceland has improved the most among the Nordic countries during the period. This is noteworthy as critics had always warned that productivity would not increase in relation to reduced hours. A likely cause of this change is the re-organisation of work and more organised shifts, strategies meant to prepare for the reduction of hours, but also widespread consultation on the implementation of reduced working hours. The economy of Iceland remained strong with the reduction of working time.

The trials remained revenue-neutral for policymakers, providing a crucial blueprint of how future trials should be organised in other countries. 

Survey recommendations 

The survey made a few recommendations that would further improve the work-life balance, such as the private sector needs to participate fully in the reduction of hours; special measures should be taken for those working very long hours; health, social and educational sectors need investment to relieve workload, and the productivity should be further utilised to reduce working hours. 

Global trials of shorter workweeks

The UK has been testing four-day workweeks since 2022, inspired by Iceland’s success. In a six-month trial involving 60 companies, employees worked fewer hours for the same pay. Post-trial, 54 companies continued the policy, with 31 making it permanent.

Spain launched a three-year trial in 2021, allowing small businesses to reduce hours without cutting salaries, engaging 200 companies and 3,000-6,000 workers. Valencia also piloted a shorter workweek in 2023 by eliminating holidays on four consecutive Mondays, finding significant benefits.

In Japan, Microsoft’s 2019 ‘Work-Life Choice Challenge’ saw 2,300 employees trial a reduced workweek, boosting happiness and productivity by 40%.

Iceland's groundbreaking experiment with a shorter workweek challenges the very notion of the traditional 9-to-5 grind. By demonstrating that reduced hours can lead to increased productivity and employee satisfaction, Iceland offers a compelling vision for the future of work. As we grapple with the demands of modern life, it's time to question the status quo and explore innovative work models that prioritize both productivity and well-being.