Shorter Work Weeks, AI and the New Economics of Labour
For decades, businesses have measured productivity by one simple metric: hours worked vs employee output. Today, the understanding of how this metric is useful to dictate results has changed. My understanding of how AI will effect the workforce is similar to how farming changed over time. The process of harvesting changed from a more manual task and over time has become more reliant on machinery with quicker harvesting times, requiring less people. However, with urbanisation and a change in how consumers purchase goods, the workers that would have been harvesting grain, are now required in a different part of the supply chain such as warehousing processes or road transport for example.
Recent reporting by BBC News has highlighted a growing trend towards shorter working weeks without reducing employee pay, with many organisations finding that smarter ways of working can maintain, or even improve productivity. The premise is simple: if technology, better processes and automation enable the same output in fewer hours, businesses can achieve better results without increasing labour costs.
At first glance, that sounds like a win for both employers and employees, but another headline tells a more complex story.
Australian logistics software company WiseTech recently announced significant reductions to its software development workforce, citing the productivity gains created by artificial intelligence. Routine coding tasks that once required large development teams can now be completed much faster with AI-assisted tools, fundamentally changing the economics of those roles. Similar workforce restructures are occurring across the technology sector as companies redirect investment into AI and higher-value capabilities.
My opinion of both ends of the spectrum regarding the introduction of AI is that the former story is more likely. In the short term, redundancies or a reduction in working hours may occur while companies navigate how AI fits with their business, however, like the farming analogy shared above, there is likely another or new role that people will perform that AI is unable to meet the need.
Lower Labour Costs Don't Always Mean Lower Labour Spend
It's tempting to assume that AI and automation simply reduce labour costs. In reality, they often change where organisations spend their labour budget.
As repetitive and administrative work becomes automated, businesses are investing more heavily in employees who provide expertise that technology cannot easily replace. Strategic decision-making, customer engagement, project leadership, skilled trades, technical maintenance, field services and specialised operational roles are becoming increasingly valuable. The result isn't necessarily a smaller workforce, but rather a different workforce.
Many organisations will spend similar amounts on labour, but with a stronger emphasis on highly capable, adaptable people who can work alongside technology rather than compete with it.
Productivity Is Becoming More Valuable Than Hours
The discussion around four-day work weeks isn't really about working less. It's about producing more value in less time.
For employers, that means building teams that can embrace new technology as part of their role, while continuing to deliver quality outcomes. AI can generate code, draft reports and automate repetitive tasks, but it cannot replace practical judgement, leadership, relationship building or the hands-on skills required across industries such as construction, logistics, manufacturing, infrastructure and maintenance. That’s why having a role that is purely siloed to a skill i.e. data input on excel; will become less of a requirement, however, analysis of data and how to use this strategically will replace this.
These industries continue to rely on skilled people who can solve problems in real time, adapt to changing conditions and deliver work safely and efficiently.
What This Means for Employers
For business leaders, workforce planning is becoming less about headcount and more about capability.
Questions that are increasingly shaping hiring decisions include:
Can this person adapt as technology evolves?
Do they have the technical skills needed today, and the capacity to learn tomorrow's?
Will they improve productivity rather than simply fill a position?
Employers will likely require people who are multi-skilled and have attributes that signal the capability to learn as AI, its own capability and its introduction into new facets of workforce means that staff aren’t necessarily going to be ‘replaced’, but what they will be responsible for within the business will.
Skills Will Be the Competitive Advantage
The common thread between shorter work weeks and AI-driven workforce changes is not fewer jobs. It’s better skills.
Technology will continue to automate repetitive work, but it will also increase demand for people who can manage complex systems, solve problems, work safely in dynamic environments and apply practical experience where automation reaches its limits.
For employers, investing in technology without investing in people creates only half the solution. For workers, ongoing learning is becoming the most valuable job security available.
For most businesses partnering with labour hire providers, success will increasingly depend on accessing a workforce that is adaptable, skilled and ready for whatever comes next.
As the workplace continues to evolve, the organisations that thrive won't necessarily be those with the fewest employees or the lowest labour costs. They'll be the ones with the right people, equipped with the right skills, using technology to deliver more value than ever before.
