The founder of a technology company in Germany was sick of missing out on family time because he was at the office too much so he came up with a radical idea — shorten the standard workday from 8 hours to 5 hours but leave employee salaries and vacation time the same.
So the firm shortened the workday from 8 am to 1 pm by discouraging small talk, banning social media, keeping phones out of people’s hands, checking email just twice a day and keeping meetings to a minimum.
According to the Wall Street Journal, this change has led to benefits all around for the company:
As a result, the company produces the same level of output for clients despite shorter days, says Mr. Rheingans. He says the company, which develops websites, apps and e-commerce platforms, was profitable in 2018, the first full year he owned it. He says happier employees deliver better work for clients, and the shorter workday is a draw, boosting recruitment in Germany’s tight labor market.
In a similar vein, a Microsoft office in Japan tested out a 4-day workweek, giving their entire 2,300 person staff Fridays off for a summer while keeping pay steady.
The Guardian shared that employees are happier and the company more productive because of this change:
The shortened weeks led to more efficient meetings, happier workers and boosted productivity by a staggering 40%, the company concluded at the end of the trial.
On the other end of the spectrum, this week on the podcast we fielded the following listener question:
I’m finishing college and wanted to know your thoughts on investment banking. Is sacrificing 2-3 years of work doing 80-100 hours a week worth it?
Here’s our response (skip ahead to the 2-minute, 40-second mark):
My first internship in the investment business was with a group of sell-side analysts who covered specific market sectors and industries and were paid for their research (not their buy and sell calls which were not very accurate).
My boss was a young guy who went to an Ivy League school. He talked a lot about how his first job out of college was working 2-3 years for a big investment bank. I was regaled with stories of workdays that lasted until 2 or 3 in the morning. He also said that he only got something like 3 days off in total in his first 2 years or so on the job.
He wasn’t’ complaining but rather wore this fact like a badge of honor.
I was never going down the investment banking path anyways but hearing stories of 100 hour work weeks pretty much sealed the deal of making me never want to consider it.
But I get why some people go this route. You get the opportunity to work for and with prestigious firms. You could also make a lot of money. And oftentimes those with an investment banking background have an easier time finding their way into a role with a private equity or hedge fund firm because those places know how hard those candidates will work.
Investment banking doesn’t have the same cache as it once did now that tech more or less rules the world but it’s still seen as a stepping stone for many who would like to enter the world of high finance.
Here are the questions I would ask myself when considering this decision:
- Do I have the right personality to work in this type of environment? I’m not built for a high-pressure job that requires spending every waking hour of my life at a desk. Others, however, thrive in this type of situation. The trick is understanding which environment or organizational culture you can prosper in.
- Do I want to do this now or later? If you are one of those type A personality people, you’re probably going to put a bunch of time into something during the course of your career. So if you want to get those long workweeks out of the way during your 20s to set yourself up for something else down the line, that’s probably the time to do it while you have the energy.
- Do I want this job or do I want the life that may come from earning a lot of money? There’s nothing wrong with the pursuit of money or career. Both can play an important part of a fulfilling life. But making money the sole goal of your career can eventually become soul-sucking. Working 80-100 hours is difficult for entrepreneurs doing what they love. Putting in that same workload for a job you don’t love, even when the money is good, can be tough to stomach.
- Have I read Young Money by Kevin Roose? Roose followed around 8 young people who were just starting out in the investment banking world and interviewed them along their journey. This book is eye-opening for anyone who doesn’t know what this world is like.
Useless Career Advice
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Now here’s what I’ve been reading this week:
- Today’s most valuable tech companies are time machines (No Mercy No Malice)
- How to spend money (Dollars and Data)
- The Federal Reserve’s role during WWII (Fed History)
- Michael’s decade in review (Irrelevant Investor)
- Tapas, crepes, puppies and tuition (A Teachable Moment)
- Breaking bad habits (Humble Dollar)
- Kids are expensive but they are worth the investment (Ramp Capital)
- 8 investment traps to avoid (Financial Bodyguard)
- Young boy invites kindergarten class to his adoption hearing (WZZM 13)