The future of work? Pay for delivery, not hours
Paying people based on the hours they work is holding back our economic productivity.
Take construction, for example. In the UK in 2021, there was a Construction Pioneers pilot that tested flexible working across four companies. They found that when construction workers were paid for getting the job done, not simply an hourly rate, it lifted productivity.
This productivity lift travels across industries. Perpetual Guardian in its four day week trial is entirely different from construction, being legal experts and office-based, but when they were paid to get the work done, instead of their hours, they were capable of doing it 20% faster. Since that trial in 2018, there have been hundreds of others across the globe, replicating similar results.
Shifting our default to pay people for getting the job done isn’t going to be easy, but it’s the way forward for a more productive, and healthier, future of work.
The challenge to get there is two-fold.
First, our employment legislation hard-wires the relationship between hours and pay. We evaluate the value of the work, turn that into an hourly rate or annual salary, then pay based on the hours worked. Instead, we need the option to switch out payment for hours and replace it with pay for delivery. We would pay for what we really want, i.e. getting the job done, and manage the time, not the other way around. This is virtually impossible to do right now. Just ask anyone who has to calculate holiday pay.
The second, and tougher obstacle, is our long hours culture. This is deeply embedded here in Aotearoa. I’ve seen the damage it does, across all industries. The site supervisor being first in and last out in construction, or the middle manager trying to cover the work of two jobs following another downsizing restructure. It’s not only the person working long hours who suffers, but their family and community miss out too. Jarrod Haar’s burnout statistics over the last four years paint a sobering picture. Being ‘always on’ ultimately leads to declining performance, stress and burnout, with families and communities left to pick up the pieces.
Tackling the first challenge and changing the employment relationship to focus on delivery, not hours, could also create the inflection point we desperately need to turn around our long hours culture.
People want change. A Mercer report in Australia recently showed that a third of employees would forgo a ten percent pay increase in exchange for more flexibility and US research has similar insights. People want some choices about when they get their work done. What better way to give people more flexibility than to pay them for getting the work done, rather than insisting on the number of hours they work? Let’s pay for the job and manage the time, safeguarding against excessive hours. Employers can stipulate maximum weekly hours and support teams to manage healthy work-life boundaries. Government can legislate, similarly to the European Working Time Directive.
Our economy needs to step up with a productivity lift, as we consistently underperform relative to other developed economies. I admit this is no silver bullet. Nothing is. We need multiple changes, including the adoption of technology, smart, ethical use of AI, alongside a fresh approach to work and pay.
The future of work is calling us to upgrade our employment legislation. If we have the option to employ someone to get a job done and manage the hours, not the other way around, we could finally see the incentives change from driving a long hours, low productivity economy, and instead, unleash our potential through delivering high quality work, in less time, across all sectors while giving people access to the kind of future of work they can really get behind.
This article was first published in the Sunday Star Times, Labour weekend, 27 October 2024