Lesson from Iceland – Shorten the Workday to Seven Hours and Enjoy the Results

After research showed that reducing working hours has no negative impact on employee productivity, but rather improves their overall wellbeing, most Icelandic employers decided to switch to a 7-hour workday. Without a reduction in salary, of course.

Between 2015 and 2019,  the Icelandic government, together with municipal authorities and labor unions, conducted research on 2,500 employees (one percent of the Icelandic workforce) whose working hours were reduced from 40 to 35 or 36 hours per week. It quickly became evident that employee stress levels decreased, while productivity remained the same as when working 40 hours, or eight hours a day.

Positive Changes

The report’s author, the Association for Sustainable Democracy (Alda), stated that the successes of the experiment are exceptional and that employees with reduced working hours managed to better balance their private and professional lives, experienced a better atmosphere at work, significantly reduced stress, and improved their mental health. According to Euro News, during the report’s release, 86 percent of Icelandic employees reported that they had switched to contracts with shorter working hours or that this was promised to them in the near future.

– Iceland has shown that in modern times it is not only possible to work less, but that changes are possible and visible – said Alda researcher Gudmundur D. Haraldsson to Euro News, adding that this reduction in working hours in the public sector  serves as a guide for other companies, especially private ones. 

They also announced that similar experiments will be conducted to test the concept of a four-day workweek, which has been a hot topic in recent years. Spain, for example, plans to spend 50 million euros from the EU recovery fund to conduct a three-year pilot study on 200 medium-sized companies. Although experts warn that this work concept is not applicable to all industries, some companies that have implemented it report very good results.

For instance, the company Software Delsol invested 400,000 euros last year to reduce the working hours of its 190 employees. During that period, no employee resigned, the use of vacation days decreased, and they recorded a 20 percent increase in sales. Given that the pandemic has significantly impacted the economy and the labor market, as well as employees’ mental health, perhaps such changes should indeed become part of the ‘new normal’.  

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