Iceland has made significant strides in reducing working hours over the past five years, with nearly 90% of its workforce enjoying shorter working hours. This shift began with a large-scale experiment in 2015 that encouraged approximately 2,500 workers to trial a four-day workweek. Following positive feedback and promising data, by 2019, the reduction in hours was formalized, resulting in the average workweek now comprising around 35 to 36 hours.
This transformation stemmed not from a single legislative action but from robust collective bargaining and trade union agreements. Workers have the flexibility to either decrease their weekly hours or condense their work into fewer days. Such flexibility has been crucial to widespread acceptance of the change.
Similar concerns raised in other countries, like Germany, revolved around fears of declining productivity and wage compensation complexities. However, Iceland’s experience has debunked these worries, with research from think tanks like Autonomy showing that productivity has often improved. Workers have reported lower stress and burnout rates and a better balance between professional obligations and personal lives. Notably, this aligns with the values of Generation Z, with 81% believing shorter working hours could lead to greater efficiency.
Several success factors underpin the Icelandic model. Importantly, employees experienced no loss in pay or benefits, distinguishing it from approaches like Belgium’s, where longer workdays compensated for the reduced week. Additionally, Iceland has heavily invested in digitalizing its businesses and public services, providing advanced internet infrastructure that supports productivity, especially with the rise of remote work.
Beyond improving individual well-being, this shift has also bolstered social progress. There has been increased gender equality as men have gained more free time to participate in family and household responsibilities.
Looking ahead, Iceland’s journey offers insights into the future of work. It demonstrates that a reduction in working hours can enhance productivity, employee satisfaction, and social equity. Preparing for a digitalized work environment positions Iceland for a successful adaptation for future generations. This ongoing social experiment provides compelling evidence that the interests and demands of Generation Z for a healthier work-life balance could form the foundation for a more sustainable and humane working model.