The 5-Day Week Is 100 Years Old

Unknown · 00:00Jase: Welcome to episode 277 of The Numbers Game. I'm Jase. I'm here with Nick. How are you, mate?

Unknown · 00:05Nick: I'm good. Tired.

Unknown · 00:07Jase: Me too.

Unknown · 00:08Nick: Tired. 5 days is a long week.

Unknown · 00:11Jase: It's way more than half the week. 5 out of 7 just seems like it's the wrong balance, right?

Unknown · 00:17Nick: What if you could do the same in 3 to 4 days a week?

Unknown · 00:21Jase: I think I could.

Unknown · 00:22Nick: You think you could?

Unknown · 00:22Jase: Yeah. Yeah. I mean, especially with my mate Claude these days, there's a lot of productivity.

Unknown · 00:27Nick: To be had. I've got something for you. Everyone's worried about losing their jobs because of AI. And I think the reality is some people will lose their jobs.

Unknown · 00:36Jase: Tens of thousands are losing their jobs.

Unknown · 00:37Nick: 30% of the people that work at the ATO will lose their jobs. They're on borrowed time already. Okay. But what if AI— obviously there's going to be fewer jobs, but what if AI means we just work less? So we all continue to work, but we get the same amount done in a 3 to 4 day week instead of a 5 day week.

Unknown · 01:00Jase: I don't want to go early, but it sounds like you're talking about the future.

Unknown · 01:03Nick: I'm talking about the future and the past. Yep. Because in the past, prior to the Industrial Revolution, we all worked 6 to 7 days a week. Not we all, you and I weren't around, but someone did.

Unknown · 01:14Jase: If Marty was still here, he could tell us about it. He could.

Unknown · 01:16Nick: This is where he really come into his own, didn't he?

Unknown · 01:19Jase: We miss you, Marty. We can't have you put your input in on that.

Unknown · 01:22Nick: But on a serious note, Prior to the Industrial Revolution, people were working 6 to 7 days a week, no benefits, so no holiday pay, no sick pay, 10 to 16-hour shifts. Industrial Revolution comes in, Henry Ford brings in the 5-day workweek, and here we are today.

Unknown · 01:40A long time ago, like I'm talking—

Unknown · 01:43Jase: 100 years?

Unknown · 01:44Nick: Oh, well, 1926 was when Henry Ford started the trend of the 5-day workweek. So we're 100 years, very good. You read the notes, excellent. So to think that we're still at that 5-day week 100 years later, that's quite draconic.

Unknown · 02:03Jase: Well, yeah, the, the masses are at the 5-day work week. You can, you hear the news of, you know, the 4-day work week or the 9-day fortnight. And while it's been trialed and promoted, and I think for certain industries it works better than others, it's not mainstream.

Unknown · 02:20Nick: Yes. No, but I would challenge any individual within reason, um, and particularly in the public sector, um, who's doing a 40-hour week. I would challenge them and I would suggest that 90% of those people could probably have the same output with 32 hours a week.

Unknown · 02:44Jase: Yep.

Unknown · 02:45Nick: Now you just think about— and I'm not gonna— I'm not picking on your business here, I'm picking on, um the space that you work in. You work in a coworking space. Yep. How much downtime do you reckon goes on in and around that coworking space on a 9-to-5 day?

Unknown · 02:59Jase: Oh, okay. Yeah, I mean, the trip to the coffee machine, the stairs down to the kitchen, quick hit on the pool table or the golf sim, lunch on the rooftop, playing some basketball. Yeah, it sounds like all of a sudden there's a bit of productivity that could be lost here.

Unknown · 03:16Nick: Yeah. And let's not be silly about it. You can't sit at your desk for 8 hours a day and work because then you're, you know, you're not efficient and your brain's fried, so you need breaks.

Unknown · 03:24Jase: But I guess the question is, would you do that if you had Friday off every week?

Unknown · 03:28Nick: Well, you probably couldn't do it because you've only got a certain capacity. You need— true, like, we all— even the best performers need to get up and go for a walk.

Unknown · 03:35Jase: Yeah, it's all these toilet breaks the team take piss me off. Can they just stay at their— no, I'm kidding.

Unknown · 03:38Nick: I'm sure you could hook something up. Um, but, um, so you think about people that are now, um, working from home 3 days a week. Because they want to run errands. That's the reality. Like, and errands could be school drop-offs, package deliveries.

Unknown · 03:56If you think about the productivity that's lost because you're dropping the kid off to school, getting home, doing an hour's to work, someone rings a doorbell, get a parcel delivered from Amazon, something you ordered yesterday, and then you've got to pick the kid up at 3.

Unknown · 04:12So I just, I'll challenge anyone to say that they couldn't get a full week's work done in today's environment and the way that we work today within 4 days a week. I think that would be for a lot of people. Now, if you're out there doing 50, 60 hours a week because you're trying to make your way in the legal profession, um, or, you know, you're an accountant in a Big Four, um, different story because you're probably doing 60, 80 hours a week anyway.

Unknown · 04:39But where I'm going with this is I think that possibly where this goes, this AI revolution, the reality is that certain jobs will be gone. Um, 100%.

Unknown · 04:54Yeah, lots of particularly white-collar jobs will be gone. So it might mean people upskill. But what we're finding in our business, and I mentioned this in prior episode, is an increase in productivity.

Unknown · 05:08Jase: Yep.

Unknown · 05:10Nick: Increase in productivity equals, in most circumstances, an increase in profitability. So I feel that a lot of service businesses in particular, in the next 2 or 3 years, are going to get significant gains in productivity and they're going to get significant gains in net profit margin.

Unknown · 05:28Now beyond 2, 3, 5 years, something could change again dramatically that could actually impact whether or not they even have a business. But I think the next 2 or 3 years, there's significant margins to be made through productivity gain.

Unknown · 05:43So rather than people losing jobs, is there a world where businesses share in those productive— those profit margin gains? So if you're a business running at a 20% profit margin, which would be a lot of businesses, I would have thought, anywhere from 15 to 30, maybe you stay at that 15 to 30.

Unknown · 06:03Maybe you then drop back to a 4-hour, uh, a 4-day or a 3-day work week because there's more money to go around. So an accountant in your business only works 4 days, earns the same amount of money, but because you've got productivity gains, you're still making the same margins at Future Advisory, but your staff members are actually working less.

Unknown · 06:24So it's gonna take a generous business owner to say, "I'm gonna share in those margin increases that I've got." But again, I go back to the Industrial Revolution and what it was like prior to that. And how times have changed.

Unknown · 06:41So there's a lot of things to line up there, but it's just a different take on that. How do we continue, um, you know, to have confidence in humanity and look after each other instead of just sacking people because you can make more margin?

Unknown · 06:59Is there another way to do it?

Unknown · 07:01Jase: It's a great question, and I think, uh, unfortunately in mainstream media and what we've seen already is the tens of thousands of job losses, mostly from You know, your big tech businesses where they've let off engineers and coders who— that's all now being done, you know, through the different AI platforms and programs.

Unknown · 07:18So you've probably got 6 figures of job losses minimum around the world in those spaces. And you go, it's reported there's more to come. So I think, I think this is a fantastic time to start to look at what does the future of business look like for yourself if you're a business owner?

Unknown · 07:35What does your role look like if you are an employee? And then how can you, I guess, safeguard what you can And if that— I mean, productivity is definitely one thing. I would, you know, if I put myself back in the, the position of when I was an employee working at an accounting firm, if I could do 100% of my billable hours, you know, in a shorter period of time, make and hit my target.

Unknown · 07:58So we generally know, like, if my, my billing target for the month might be $20 grand and I've got to bill $5 grand a week as a senior accountant, intermediate accountant, give or take. If I could do that in 3 weeks and I hit my targets, and that means I've made money for the firm, you know, why wouldn't I be able to have the 4th week off or spread it out over the 4 weeks of the month?

Unknown · 08:21Do you know, do it in 4 days a week and have a Friday off every week. So I think, you know, this, this idea of the number of hours, and if you look at productivity now as well and go with AI and different tech tools, even without AI, If someone is more focused and more productive and better at their job and gets it done and they work 40 hours next to the person who's not as productive, not as good at their job, and they work 40 hours, is that fair?

Unknown · 08:45Is that a level playing field?

Unknown · 08:48Nick: Um, yeah, well, I'd suggest that's already occurring.

Unknown · 08:53Jase: Correct.

Unknown · 08:53Nick: So I'd suggest it's never really been a level playing field.

Unknown · 08:55Jase: No.

Unknown · 08:56Nick: You know, there's always the weakest link.

Unknown · 08:58Jase: Yeah.

Unknown · 08:58Nick: Um, so But, you know, I don't know. I just, I think that's what's going to occur in any kind of environment, no matter what productivity is available to us.

Unknown · 09:11Jase: But, um, I think, I think there's been brave businesses out there that have started to lead the way in the past. I mean, when the 9-day fortnight or the 4-day work week started to kind of hit the media, I mean, one, one that was prevalent in, in the accounting world was Grant Thornton. Um, they went to 100% pay for 80% time for 100% productivity.

Unknown · 09:32So you still had to do the same amount of productivity you would have done in 5 days, but you did it in 4 days. Um, you know, doing that, uh, as far as I could tell, they're still doing it. I might have to reach out to our friends at Grant Thornton and see if I can get a comment.

Unknown · 09:45Nick: But is that an option for us, or— no, no, for Grant Thornton? So is everyone on a 4-day work week, or They're saying, we don't care how you get there, but you get to your— and you might not know the answer to this, so if you don't, that's okay. But I'm wondering if they went, no, we just need this much out of you.

Unknown · 10:03Yeah. If you get there in 4 days, don't work on a Friday.

Unknown · 10:07Jase: Yeah.

Unknown · 10:07Nick: If it's Thursday at 5 PM, you haven't got there, we'll see you Friday.

Unknown · 10:10Jase: See you Friday.

Unknown · 10:11Nick: I wonder if they gave them the option.

Unknown · 10:12Jase: Yeah, I'll dig into it and find out for you. But I mean, it's just going like this, obviously. Then if you think about employee wellbeing, if productivity is the same, the output's the same for the business, you'd think that the well-being and, and what it does for society in general from an overall health point of view, to have that extra day off to, to do it, to have the deliveries on that day, or the electrician or the plumber or whatever you want to do with that extra day off you've got during the week.

Unknown · 10:40Why isn't it happening more? Are we just set in the ways of 100 years of 5-day working that we haven't been able to reinvent our businesses and our models? Like, I, I— Greg and I have had this conversation off and on over 5 years of future going, man, a 9-day fortnight would be great.

Unknown · 11:00Like, but what, what, what dials do we need to kind of, you know, move and what levers do we pull to still get what we need to? And then we go, but then also, does everybody have the same day off? And then you get an out of office when you email me on my team, or do we alternate team?

Unknown · 11:16Like, and then the more we dug in, it went like, just keep doing what we're doing.

Unknown · 11:21Nick: I think you could do it tomorrow. Yeah, yeah, I think you could do it tomorrow. I think that, as I said, I'll stand by this, but I think no one really works in most businesses a full 5-day week in the current environment.

Unknown · 11:37You talked about culture. There's all— and don't get me wrong, I'm totally down with this, you need to build team culture. Yeah, but how much of that are you doing? Like, we had a, um, we had a, um Yeah, and I'm happy to divulge this, but we had an awards night last Thursday night in this business where we went out and we enjoyed ourselves.

Unknown · 12:00Jase: Congratulations on the win, by the way.

Unknown · 12:01Nick: Yeah, and that's not why I brought it up, but thank you. It was great.

Unknown · 12:05Jase: Better Business Awards? Yep. Yeah. Well deserved. You guys are great.

Unknown · 12:09Nick: Thank you. So we had a pretty big night Thursday night, which is understandable. Sarsaparillas.

Unknown · 12:15Jase: Hey, a few sarsaparillas.

Unknown · 12:16Nick: Yes. And then we had a, like a team planning building day on Friday where we do these quarterly where we give them an update on the business, high-level stuff that we've got planned as management that, you know, I think it's important for the wider team to know.

Unknown · 12:37So that's a half day? That's a half day. So we go to the awards night Thursday night. We had all the interstate people in here on Thursday. Productivity levels were low from about lunchtime Thursday. Everyone's getting ready for the awards.

Unknown · 12:52What are we doing? What's going on? Go to the awards night. Big nights happen, particularly with a couple of people. Friday morning's a write-off. Friday afternoon, we're at the group day. Our interstate team, well, they flew down the day before, so they've lost half a day of travel.

Unknown · 13:12So I would suggest that our interstate team, not their fault, it's the businesses, it's the position that business put them in, which we're happy with, probably got 2 to 2.5 days of work in last week. So you were just talking about going to play pickleball.

Unknown · 13:27How often would you do that?

Unknown · 13:29Jase: Quarterly. Quarterly culture day. Yeah.

Unknown · 13:32Nick: But is it, and I know this is gonna be difficult to answer, but on average, how many hours a month do you think you guys spend out of the office doing team building stuff together?

Unknown · 13:42Jase: A couple hours, like easily a couple hours.

Unknown · 13:44Nick: That's it a month?

Unknown · 13:47Jase: Team building stuff, just like training, CPD stuff, just anything that's non-billing, productive time, billable hours. Oh, if you, if you then, if you average out mine and Greg's time on the, you know, the corporate golf day and the stuff we do with the CPA or Xero, like it adds up.

Unknown · 14:02So yeah, yeah, like a lot of hours.

Unknown · 14:05Nick: Yeah, so I'm just trying to get to the Trying to prove a point here that all that stuff's important, right? Um, team building is super important. Like, I know that better than anyone because I run a business that relies on culture to retain. But can you be smarter about it?

Unknown · 14:21Is it such a problem if people still get a 3-day weekend? Do they need that stuff as much if they know they've got a 3-day weekend? So a lot of businesses probably the productivity on a Friday afternoon is next to zero. People go out for lunch, golf days, these things.

Unknown · 14:40That's just the way that we— yeah, it's just the way that we are. So I would question if many people do full 5-day weeks. I think 8-hour, 9-hour days.

Unknown · 14:51Jase: Yeah, I think the challenge for this is us two coming from a very professional services kind of space. We can look at it and go, you know, If we weren't here for 5 days, we can do 4, 3, 4, 4.5 days. We can get it all done. And you're right, there's the organic loss of time here, there and everywhere that if you said to everyone, hey, when you're here, if you can be 20% more productive for 4 days, you get a whole day off.

Unknown · 15:15Yeah. Does that rev people up and get them doing it? Yeah. You've got nurses, teachers, tradies, like the replacement of those hours when you're on the job site doing the plumbing or you're in the hospital Nursing to a sick patient, again, hard.

Unknown · 15:30And like, yeah, it can work in some, it can work in others. That's not to say because they can't have a 4-day work week that those businesses that can get AI gains or just productivity gains full stop. I think we, we, we in general, like people these days in Australia, around the world, the AI buzzword is, is going hard and, you know, AI productivity gains, AI this.

Unknown · 15:54Without AI, full stop, there are productivity gains to be had just in general. Like, you know, I've, you know, not dubbing in anyone at my work, but I've walked past the desk and just seen, you know, on the mobile and a couple of TikTok scrolls just, just for 5 minutes in between whatever job was going on, and then phone goes back down and back to work.

Unknown · 16:14I've been guilty before of picking up my phone and, you know, there's— I didn't check those messages. Oh, I've got to write back to Nick. See how the Crows went on the weekend or call a mate. All of those little micro moments are productivity losses during my 9-to-5 work week that I've used that time to do.

Unknown · 16:31Now, yep, would I and would my employees behave differently if it meant having the half day off on a Friday or the full day off on a Friday? Or do you need to change behavioral habits and, you know, the way people perform before you can roll that out.

Unknown · 16:48Nick: I don't even think about social media. Like, you just, you think about, I'm not trying to pigeonhole any particular group here, but you, you think about, um, a building site, particularly a commercial one. You think about how much of that stuff would go on, the scrolling, the banter, the bets.

Unknown · 17:06Yeah, like their productivity. And I'm not, and again, I'm not saying everyone, some of the levels of productivity with certain people in those businesses would be next to nothing, would be so low. And that's why it's So expensive to get things built and no one's making any money. The nurses, I agree with you.

Unknown · 17:23Teachers, well, that's going to look a lot different. Yeah. You know, there's a question mark over that industry altogether because of the way kids are going to learn moving forward. So healthcare, I think, is a, you know, that's probably unique. But even if you've got a real hardworking trade that's a client of yours, you think about how much quicker they can get their books done now, their quoting.

Unknown · 17:46Yep. You know, the sitting there for 3 hours at night doing their bookwork, that probably doesn't happen anymore.

Unknown · 17:52Jase: Yep.

Unknown · 17:54Nick: You know, drawing up plans and stuff.

Unknown · 17:55Jase: Yeah, with the right tools. Yeah. Yeah, you're eliminating many hours. But like anything, when technology advances, the expectation is more work, not more time off.

Unknown · 18:06Nick: That's the underlying problem.

Unknown · 18:07Jase: And that is the underlying problem. I go, I think back to when Xero came out. One of my favorite stories, one of the presentations I used to do on my accounting career journey and getting people into the space. But when I started, people would bring in— sorry, people would bring in bank statements, like physical paper.

Unknown · 18:25It was a bank's bag of bank statements and a bag of receipts. And we worked in rural area where there's a lot of farmers, so it'd be manure and soil on the receipts. And my job when Xero didn't exist— and I explained this to my team today, they're like, Well, that's bizarre. But I had a ruler and a pencil and a highlighter and line item by line item, I went through the bank statement and I entered it into Cashflow Manager and I replicated what existed, you know, down here because I couldn't get it into the computer.

Unknown · 18:54There was no optical character recognition and AI and whatever else. And one by one, I'd enter everything, match it back to receipt, tick it off and mark it. And if I got to the end of the month and the bank balance was out of whack, I'd miss something, scrap the whole lot and start again.

Unknown · 19:11And that was my first job doing BASes with paper, you know, and then Xero came out and said, we're going to automate all of that. It's all going to just, it's going to be in there and it's going to reconcile and you'll, you know, and then now it goes again to self-reconciling. But at no point did I get less busy.

Unknown · 19:27At no point did my staff get to do less. The expectation was always that we'd do more, we'd have more clients, we'd help more people, we'd make more money or whatever it is. That's probably the bit that is the underlying change or culture shift in general in business that needs to go is if— which is what you're kind of saying— if we have productivity gains and if we have technology do more, when do we ever let us humans do less and end up with the same amount of money?

Unknown · 19:53Nick: And I think that's the— as we said, that's the underlying problem. And the reality is most businesses will sack people will find productivity gains, will find increased profit margins, and will retain those profit margins either for themselves or shareholders.

Unknown · 20:11That's probably where it's going to go. But the society has also moved a lot from what it was like when, you know, you and I were coming through the ranks. Like, people are now more open to working less.

Unknown · 20:27Like, this whole universal income thing that I know you love is getting floated around. Now, 20 years ago, people would've went, this is my opinion, they would've went, universal income, that's ridiculous. Like, I wanna get paid for what I do. I know I wanna work more, I wanna get paid more.

Unknown · 20:43But now it's becoming this open conversation that that could possibly be where we go. So things are changing.

Unknown · 20:51Jase: And there's a definite shift as well. Like I refer back to that time with the bank statements and whatever. I also didn't walk out the door at 5:00 PM. Like, and culturally right or wrong, you know, I took a job in the city at a firm in Southbank, South Melbourne, and my first day there was 5 PM, and then I looked around, everyone was still there.

Unknown · 21:105:30, looked around, everyone was still there. Closer to 6, everyone was still there. And I'm sitting there like my first week just going, man, like, is it a contest of who sits the longest? Like, who's the first to get up and go home? Like, we've been here since 8:30 AM. I've battled an hour or an hour and a half of traffic to get in, pretty keen to get on the road, but nobody would get up and leave.

Unknown · 21:31You kept working. And then I explained the story to some of my team, like, you know, they're in at 9, they're out the door at 5 or a bit after 5, and that is well within their right. They're 9 to 5, that's what we pay them for. But it's just a very different mindset to the entitlement and what you get these days.

Unknown · 21:48And then even the protections that come out, like the right to disconnect, like you can't message a team member after hours, like without, you some potential blowback on the business owner. So, and again, not saying that's a bad thing, you know, there, there needs to be boundaries. And, you know, you don't work a job to, you know, be abused and taken advantage of.

Unknown · 22:07Nick: No.

Unknown · 22:08Jase: But it's again cultural shift, or times have changed over that time. And then, and now it is what is the next change, what is the next shift, for better or for worse. And yeah, you did touch on universal high income. If you haven't heard of the term, Go and look it up and do a bit of reading.

Unknown · 22:24We might bring it into a future episode moving forward, but it's the view of the world where when AI is doing 70%, 80% of the jobs that, you know, it's not doing at the moment and all of that income is controlled by less than 6 or 7 businesses around the world, how does everyday person survive and live?

Unknown · 22:44And that just becomes universal high income.

Unknown · 22:47Nick: Yeah.

Unknown · 22:48Jase: And Yeah, yeah, it's, it's many gaping holes in that. We want to go into it.

Unknown · 22:54Nick: There is. But, um, look, it took someone like Henry Ford to bring in the 5-day work week, so, you know, who's to say that there won't be another Henry? Um, it's going to seem strange, but I think, as I've been talking about, to me it's more and more possible now.

Unknown · 23:14The more you talk about it, the more I think it can be done.

Unknown · 23:18Jase: Yeah.

Unknown · 23:20Nick: But it's gonna take a collective from business owners and employees, not just employees or business owners. Everyone needs to be on the same page.

Unknown · 23:27Jase: Yeah.

Unknown · 23:28Nick: But—

Unknown · 23:29Jase: Is it, sorry, something you're considering, Innov8? Like, is there a thought around, you know, you've got successful brokers kicking ass, but they're self-driven to work the hours that they work. Would there be a—

Unknown · 23:42Nick: Look, the salespeople, are contracted to a 40-hour week. But the reality is, how do we judge their performance? It's numbers.

Unknown · 23:52Jase: Yeah.

Unknown · 23:52Nick: So, you know, if the average loan settlements in our business, we think could sit around $70 million to $80 million per broker for an average performer, I wouldn't know if they're doing, yeah, only 20 hours a week. If they're only doing 20 hours a week and getting that done, I'm okay with that.

Unknown · 24:11The admin team, look, yeah, I think it could definitely happen. They're super busy at the moment because we've been a little bit under-resourced. So I won't bring it up this week, but—

Unknown · 24:21Jase: No, no, no.

Unknown · 24:23Nick: But yeah, I think long-term, I don't see why not. Because if we get the productivity gains that I think that the service-based industries are going to be exposed to in the next couple of years, it's something to consider.

Unknown · 24:37Jase: I think maybe that's the win-win-win as well. Like some business owners may be sitting there going like, oh, you know, I already give my employees heaps, and now I'm going to give them an extra day off. But I think the missing link there is, I think about our admin team, they're under the pump, they're busy. Like, you know, we've got one of the girls off this weekend, and it's, it's, yeah, it's tough.

Unknown · 24:56But we also haven't been great at promoting innovation and use of technology where they self-drive solutions and then present it back to us for approval to roll them out.

Unknown · 25:06Nick: Yeah.

Unknown · 25:07Jase: And I think that's the win-win-win, is if their mindset changes to how do I make my job easier so there's less to do so that Future Advisory, Jason, Greg are still getting the same output, but I'm not actually needed as much. Without the fear of, you know, losing their job because they've replaced themself, you know, and that's probably the missing link as well is right now for a lot of people out there, there's probably no benefit to making their job easier and replacing themselves for fear of job loss.

Unknown · 25:33Nick: No, that's right. But what they do need to do is they need to be aware of how someone else can do it, such as their employer. And what am I doing from an upskill point of view to make sure that I have, you know, a future here and a long-term tenure?

Unknown · 25:50That's what I would be thinking as an employee. What do I need to do to extend my or increase my value in the business?

Unknown · 25:59Jase: Yeah, 100%. Now, really interesting topic and one that we could probably talk about all day and all night given the changes coming up ahead in the future. If you've enjoyed the episode, give us a like, give us a subscribe, follow us depending on where you are and what platform you're on. We'd love to have you on board as part of the Numbers Game family.

Unknown · 26:16Comments and talk about what's happening in your world and what you think is relevant to a 4-day workweek. And just remember that every productivity revolution in history gave us more time back. The question is whether we'll let this one do the same or whether we'll waste it.

Unknown · 26:32Game over. This podcast is for educational and informational purposes only. The conversations are of a general nature and do not qualify as financial or tax advice. We recommend before you make any financial decisions, you consult a licensed professional. Individuals on the podcast may hold positions in the companies discussed. ---