OM in the News: Happiness From a Shorter Workweek Can’t Overcome Costs

A Swedish nurse says the 6-hour workday raised her efficiency
A Swedish nurse says the 6-hour workday raised her efficiency

A controversial experiment with a 6-hour workday in Sweden just wrapped up with a cheerful conclusion: Shorter working hours make for happier, healthier and more productive employees. “There’s just one catch,” writes The New York Times (Jan. 7, 2017). “The practice is too expensive and unwieldy to become widespread in Sweden anytime soon.”

The 2-year trial centered on a retirement home where workers were switched to a 6-hour day, from 8 hours, with no pay cut. Seventeen new nursing positions were created to make up for the loss of time at a cost of $738,000 a year.

The experiment stoked discussion about whether investing in a better work-life balance for employees benefits the bottom line for companies. But the high price tag and political skepticism are likely to discourage widespread support for taking the concept nationwide. While a growing number of countries and companies are studying the concept of employee happiness, the idea of improving it through shorter work hours has by no means gained broad traction. A similar model in France has been controversial for more than 15 years, ever since a Socialist government made a 35-hour workweek mandatory. Companies of all sizes in France have complained repeatedly that the short workweek has damaged competitiveness and generated billions in additional costs.

In the Swedish experiment, employees reported working with greater efficiency and energy when their hours were cut. They called in sick 15% less than before and perceived their health to have improved 20%. The program increased costs by 22%, mostly to pay for new employees. However 10% was offset by reduced costs to the state from people being taken off the unemployment rolls and paying taxes into the system.

Classroom discussion questions:

  1. Do your students believe “we should work to live, or live to work?”
  2. What are some companies in the U.S. doing to improve working conditions?

OM in the News: Sweden’s Lean Hospital

st goran hospitalSt. Goran’s Hospital is one of the glories of the Swedish welfare state, writes The Economist. Doctors talk enthusiastically about “the Toyota model of production” and “harnessing innovation” to cut costs. Yet, from the patient’s point of view, St. Goran’s is no different from any other public hospital. Treatment is free, after a nominal charge which is universal in Sweden. St. Goran’s gets nearly all its money from the state.

A temple to “lean management,” the hospital today is organized on the twin lean principles of “flow” and “quality.” Doctors and nurses used to keep a professional distance from each other. Now they work (and sit) together in teams.

One innovation involved buying a roll of yellow tape. Staff used to waste precious time looking for defibrillator machines. Then someone suggested marking a spot on the floor with yellow tape and insisting that the machines were always kept there. Other ideas are equally low-tech. Teams use a series of magnetic dots to keep track of each patient’s progress and which beds are free. They discharge patients throughout the day rather than in one batch, so that they can easily find a taxi.

The medical equivalent of a budget airline, there are 4-6 patients to a room (unlike our American system of private and semi-private rooms). The decor is institutional. Everything is done to “maximize throughput.” The aim is to give taxpayers value for money and not pretend that hospitals are hotels. St. Goran’s has reduced waiting times by increasing throughput. It has also reduced each patient’s likelihood of picking up an infection. Scrimping on hotel services means the hospital could instead invest in preparing patients for admission and providing support after they are released.

The average length of a hospital stay in Sweden is 4.5 days, compared with 5.2 days in France and 7.5 days in Germany. Sweden has 2.8 hospital beds per 1,000 citizens. France has 6.6; Germany, 8.2. Yet Swedes live slightly longer.

Discussion questions:

1. How does lean help St. Goran’s improve its performance?

2. Why don’t all hospitals use lean approaches?