Work-life balance: does the 4-days working week pay?
Shortened working week: What effect does it have on business productivity?
Covid-19 has speeded up digitalization processes and technological transition. But that's not all...
The social distancing due to the health emergency has made it necessary for companies to find appropriate solutions to enable their employees to work safely.
From simply speaking of working remotely, people are now talking about smart working. This concept led to greater sensitivity to the work-life balance, which means greater flexibility for free time and private life. It is no coincidence that some European countries are already testing the reduction of the working week to 4 days, with the aim of verifying the effects of the shortened week on company productivity.
But what about Italy? Which companies have introduced it, and how much do they suffer in terms of turnover?
4½ working days for Carter & Benson
The first company we analyzed, Carter & Benson, has been headhunting and strategic consulting for companies since 2003. In 2020, the company decided to reduce the working week to 4½ days for the same salary, allowing its employees to distribute the four hours of leave over the week as they prefer. But what have been the consequences of this decision for the company?
An increase in turnover and improved liquidity, solvency and profitability ratios
In 2020, the company obtained a MORE Credit Rating BBB and demonstrated an adequate economic-financial situation, with a turnover increase over the years. The new functionality of the textual analysis inside the Extended12M Reports describes an improvement in solvency and liquidity over the year. Moreover, the company boasts quite positive ROE and ROI values, indexes of good profitability. Overall, Carter & Benson, despite the reduction of the working hours for the same salary, achieved good results, which indicates that the shortened week did not affect the company's productivity.
PA Advice S.p.a. has also reduced its working hours from 40 to 36.
Another company that has reduced its working hours to 36 hours per week is PA Advice s.p.a., which provides strategic consulting services to the public administration for the implementation of investment in transition and economic development projects. After the positive example obtained in some Icelandic companies, the Neapolitan company decided to give more space and more importance to the work-life balance of its employees. How did it go?
Excellent results for ROI and ROE
The credit score obtained by the company indicates a sufficient economic-financial situation, with an increase in turnover compared to the previous year and an improvement in liquidity indicators. Solvency indicators are scarce with the indebtedness remaining high despite a slight decrease over the year. On the other hand, as the textual analysis states, profitability is high: 'ROE, which assesses the return on equity, appears extremely solid' and 'ROI, which assesses [...] the efficiency of investments concerning operating profit, is healthy'.
From fully remote to Smart Working: AWIN S.r.l.
The last company we analyzed deals with professional consulting, offering solutions for advertisers and publishers to grow their online business. AWIN S.r.l. allows its employees to always work from home and to reduce the working week to 4 days.
Higher employee engagement and better results in 2020
The company obtained a MORE Credit Rating A in 2020, proving a good financial situation. The turnover has slightly decreased compared to the previous year, and liquidity ratios are also slightly deteriorating. However, as the textual analysis states, "solvency, [...] appears healthy and improving" and the Company "shows a proper leverage value and a financial leverage equal to 0.0”, which means the company has no short nor long-term debts towards financial institutions. Overall, the Company is satisfied with this 'experiment' and has stated how much more relaxed employees are since the start of this transition.
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