Four-day weeks ‘a bad fit’ for many small businesses

Trials involving larger companies fail to reflect the reality for countless in the retail and service frontline, says COSBOA.

Four-day weeks will be a bad fit for many small businesses and make some unviable as they struggle with rising wages and staff shortages, COSBOA says.

Chair of the small business body Matthew Addison said many questions needed to be answered before the idea, currently being trialled in larger businesses, became mainstream.

“How does a small business stay open if their retail shop has no available stuff? How does that retailer earn sales on day five when it is shut?” asked Mr Addison.

“How does the customer service centre provide coverage over all hours of operation when the staff only work four days per week?”

“How does a service business (hairdressing, consulting) continue to provide 38 hours of services if the employee is only working 30.5 hours?”

COSBOA acknowledged trials of four-day work weeks had met varying levels of success, but said the majority had taken place in organisations with 45 or more employees, neglecting the effect it could have on small businesses.

“Taking into consideration the inflationary impact of multiple types of new leave, plus a move to four-day work weeks on the economy with no underlying tradeoff for productivity – small business calls for caution before further thoughts of a move to a four-day work week,” said COSBOA.

It said the already high wage demands hitting small businesses could get spike higher if industries moved towards five days’ pay for four days work, and result in employees looking for similar arrangements even if moving to four days was impractical.

Workers might also choose to move away from industries that could not offer four-day work weeks for five days’ pay – such as hospitality or retail – and to an industry that could.

This would make it even harder for smaller businesses unable to financially adopt a four-day work week to attract much-needed employees.

COSBOA said the desire to move to a four-day work week due to the claims it enhances productivity was concerning because “enhanced productivity expectations do not lead to five days of customers deciding to shop in four days.”

It also claimed if the four-day work week concept was to proceed into the mainstream it would likely see workers who have already been paid five days for four days’ work offering to work the fifth day, on the provision they would then be paid overtime for that extra day, further haemorrhaging businesses.