The 4-Day Week and Statutory Incentives to Hire Skilled Foreign Workers
In the second quarter of 2024, the Randstad ifo Personnel Manager Survey revolved around the 4-day week and possible positive and negative effects resulting from it. Interactions with the shortage of labor and skilled workers as well as the influence of statutory incentives to hire skilled foreign workers were also surveyed.
11% of companies are already using a 4-day week, 47% of them with a reduction in hours coupled with lower pay. Just over a third of companies do not expect any positive effects from a 4-day week, while 59% anticipate higher personnel costs. 61% of the companies surveyed fear that the shortage of labor and skilled workers will worsen if a 4-day week is introduced. 23% believe that the positive aspects, namely the attractiveness for applicants, predominate.
4-Day Week Already in Use or Planned at Only a Few Companies
To enable an initial contextualization, the companies were asked to state their company’s general stance toward the 4-day week. 11% of companies said that they already use a 4-day week. Only 2% are planning to introduce it. While almost a fifth of companies are discussing introducing a 4-day week, around 38%, and therefore the largest proportion of companies, state that it is not an issue for them. A 4-day week is not possible in slightly less than a third of companies.
A look at the different size categories shows that a 4-day week is a little more common at small companies than at large companies. 14% of companies with fewer than 50 employees said that they use the model. The figure for large companies with more than 500 employees was only around 7%. The largest group of companies for which a 4-day week is not an issue are medium-sized enterprises with 250 to 499 employees (approx. 45%). The introduction of a shorter working week is discussed most frequently at large companies (31%).
In addition, companies that use a 4-day week or have planned to do so were asked what form of model they are adopting. About half of the companies say that involves reduced working hours coupled with lower salaries. 39% reported splitting full-time jobs over four days instead of five. Only around a tenth of companies reduce hours while still paying the same salary.
Companies Expect Higher Personnel Costs and Organizational Effort Due to a Shorter Working Week
In addition to possible benefits, the companies also had the opportunity to voice concerns about the introduction of a 4-day week. The most common response (by 59% of them) was that it would mean they would require more staff. Just over half of the companies also cite the high organizational effort involved. 40% fear a loss of prosperity for the overall economy. Only 3% of companies have no concerns about a 4-day week.
Shortage of Labor and Skilled Workers Influences Decision for or against a 4-Day Week
The next question was aimed at finding out whether companies feel influenced by the problem of the shortage of labor and skilled workers in their decision about a possible 4-day week. 42% of participants said they were not. However, just under a third said that this was an argument against introducing it. A further 16% are swayed to introduce a 4-day week because of that.
Companies Fear Worsening of the Shortage of Labor and Skilled Workers Due to 4-Day Week
Since the above-described influence is reciprocal, it is also interesting to know whether companies assume that a 4-day week might have an impact on the shortage of labor and skilled workers. Overall, the majority of respondents (61%) feel that will suffer more due to the shortage of skilled workers as a result of a 4-day week. 23% believe that the positive aspects, namely their attractiveness for applicants, predominate. A further 16% believe there will be no impact. In a sector comparison, it is striking that significantly more participants in manufacturing believe that the situation will deteriorate (67%) than in retail, where only one in two companies do, while the figure for the service sector is 61%. In addition, more companies in the retail and service sectors expect the shortage of labor and skilled workers to have no impact (17%) than companies in manufacturing (13%). A comparison of size categories shows that smaller companies are significantly less likely to expect an impact than large companies.
More Skilled Workers Available Thanks to Incentive Systems
The close links and mutual interactions between the 4-day week and the shortage of labor and skilled workers shed light on the problem of a talent pool that is too small for companies to recruit from. Political incentives could help here, for example through measures to make it easier to hire skilled foreign workers.
When asked to what extent the Job-Turbo initiative and the Skilled Labor Immigration Act are helpful for companies, almost half of the companies (48%) answered “not helpful.” However, almost one in four companies state that more skilled workers are available. Participants also face fewer language barriers due to mandatory language courses prior to job placement. This eliminates organizational effort and financial costs for companies. 18% of respondents are happy about shorter recruitment processes and just as many about easier recognition of qualifications. 17% see a reduction in bureaucracy as helpful. 7% feel supported as part of the onboarding process. While more than half of the companies surveyed in the retail sector (51%) do not consider the incentive systems to be helpful, this figure is 44% in manufacturing and 49% in the service sector. However, manufacturing in particular benefits from shorter recruitment processes (25%) compared to retail (12%) and the service sector (17%). In addition, manufacturing companies see a relatively big advantage in the reduction of bureaucracy (22%) than retail (12%) and service companies (16%). A comparison of size categories shows that small companies consider the incentive systems to be significantly less helpful than large companies (not helpful: those with up to 49 employees 57%, those with over 500 employees 40%). In addition, large companies in particular see the advantage that more skilled workers are available.
Bureaucratic Obstacles to Hiring Foreign Workers Still Too High
Almost half of the participants (48%) believe that the bureaucratic obstacles to hiring foreign workers are still too high. 39% see no practical help for their company in the legislation. 34% state that the need for further training for workers remains high. Almost one in three companies still finds the barriers to employment too high. 28% complain about long visa applications, while for around one in four companies, the measures do not address the actual problems. 12% have no concerns about the incentive systems introduced.
A sector comparison shows that manufacturing companies in particular continue to feel exposed to bureaucratic obstacles (54%) (retail: 40%, service sector: 48%). Manufacturing companies (33%) and service companies (28%) are also particularly dissatisfied with the duration of visa applications, in contrast to retail (21%). The retail sector (18%) expresses the least concern (service sector: 12%, manufacturing: 8%).
17% of Companies Plan to Hire Skilled Foreign Workers Long Term
In order to assess whether the benefits of the political incentive systems outweigh the concerns, the participants were also asked whether they plan to hire more skilled foreign workers as a result of the Job-Turbo initiative and the Skilled Labor Immigration Act. 17% of the companies surveyed stated that they are seeking to hire more skilled foreign workers long term (for more than 8 months) as a result. 1% of the companies also plan to hire them short term for up to 8 months. A comparison of size categories shows that additional long-term hiring increases with the size of the company. While 12% of companies with fewer than 50 employees and 13% of companies with 50-249 employees said that, the figure was 16% for companies with 250-499 employees and 38% for large companies with 500 or more employees. In manufacturing, 20% are planning to hire skilled foreign workers long term. While this figure is 19% in the service sector, the proportion in retail is significantly lower at 11%.
