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What Happened When I Moved My Company To A 5-Hour Workday

What Happened When I Moved My Company To A 5-Hour Workday


A little over a year ago, Tower Paddle Boards started letting employees leave by lunchtime and offering 5% profit-sharing.

So while we operated on a standard eight-hour workday at first, just like most other companies, I wanted to put my theory to the test. And it also seemed like freeing up employees’ afternoons for the outdoor lifestyle the company promoted would be a natural fit. So on June 1, 2015, I initiated a three-month test. I moved my whole company to a five-hour workday where everyone works from 8 a.m. to 1 p.m. Over a year later, we’re sticking with it. Here’s why, and how we made the change work.

MAKING THE SWITCH

When we kicked off the pilot program, I told my employees I wanted to give them two things. First, I simply wanted to give them their lives back—so they’d have a pass to walk out each day right at 1 p.m. as long as they proved highly productive. Second, I wanted to pay them better for more the more focused effort that would take. Their per-hour earnings were set to nearly double overnight: we’d be rolling out 5% profit-sharing at the same time.

Prior to the switch, an employee making $40,000 a year would’ve been paid $20 per hour ($40,000 divided by 2,000 hours per year). With the profit-sharing program leading to about $8,000 per person, that same employee would now make about $48,000 but only have a baseline of 1,250 hours per year, so their per-hour earnings would jump to $38.40. And it was crucial to me that this didn’t increase the company’s expenses by a single dime—there’d be no increased financial risk to our bottom line.

In exchange, though, I had a big ask: I needed each of my team members to be twice as productive as the average worker. We had a high bar of productivity to clear before this, and that didn’t change. I told them they just needed to figure out how to do it all in just five hours now—but there’d be support: we’d all need to figure it out and were in this together. If anybody couldn’t, though, they’d be fired. The pressure was real, but so was the incentive to meet the challenge; their workweek had suddenly become better than many people’s vacation weeks.

The results have been astounding. We’ve been named to the Inc. 5000 list of America’s fastest growing companies the past two years (we ranked #239 in 2015). This year, our 10-person team will generate $9 million in revenue.

A LEAP OF FAITH, MADE FOR GOOD REASONS

To make sure we didn’t bite off more than we could chew, I termed the pilot program “summer hours,” and set the expectation that we’d go back to traditional hours in the fall. This made some room to keep an eye on anything that might go wrong. I was concerned that our reduced customer-service hours and shop hours would mean an equal reduction in revenue. My gut told me that attracting better people, making them happy, and getting out of their way would compensate for these limitations, but we’d need to prove that. I actually suspected things would go down a bit, but the net effect would be worth it.

The reality is that we didn’t take a hit at all. Our annual revenues for 2015 were up over 40%. All our numbers were improving, in fact. When I tell people my team only works five hours a day, their response is always, “That’s nice, but it won’t work for me.” The 9-to-5 workday (or worse) is so ingrained that it’s hard to imagine anything else…

Read the full version from the author’s website.

Author: STEPHAN AARSTOL     fastcompany.com

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