Why Swiss SMEs are considering a four-day week
A four-day working week is not simply a shorter calendar: for a Swiss SME it is a decision that affects personnel costs, work organisation, customer service, and operating profit. Interest is growing especially where competition for talent is strong and where margins depend on productivity and absenteeism rather than purely linear volumes.
Unlike one-off welfare measures, a structural shift requires aligning the employment contract, work schedule, any collective bargaining agreements (GAV), and budget. The Code of Obligations (CO) and the Labour Act (LTr) set limits and obligations; cantons and sectors may add constraints through GAV or administrative practice, which must be checked case by case.
This guide outlines a simulation method oriented to accounting and controlling: quantify full personnel cost, model operational coverage in full-time equivalents (FTE), and read the effect on margins before formalising work organisation.
Three operational models and contractual implications
The term “four days” covers very different situations. For a credible simulation you need to fix weekly hours, pay treatment, and rules when workload peaks:
Compressed hours (same total hours)
Example: four days of 9–10 hours to maintain 36–40 weekly hours (within maximum weekly duration limits under the LTr, typically 45 hours for office staff). Monthly salary stays unchanged if the contract does not alter remuneration. Watch LTr limits (maximum daily duration within a 14-hour window, minimum breaks, daily rest, Sunday/night work) and written agreement with the employee where required by contract, GAV, or company practice.
Reduced hours with full pay
Example: 32 hours paid as 100% (“100-80-100” model). It implies a higher effective hourly cost and individual negotiation or an internal collective agreement; the employer cannot impose it unilaterally. OASI/DI/IC and LPP contributions remain calculated on actual salary, unless the pension fund regulations provide otherwise.
Proportional part-time
Example: 80% time and 80% salary over four days. It lowers direct cost but requires coverage (reorganisation, partial hires, overtime). Useful when the constraint is budget rather than recruitment.
Summary comparison for simulation
| Variable | Compressed 4×9 h | 32 h, 100% pay | 80% time / 80% salary |
|---|---|---|---|
| Gross payroll cost | Unchanged | Unchanged | Approx. −20% |
| Employer social contributions | Same amounts (same salary base) | Same amounts | Reduced proportionally |
| Available FTE | 1.0 hours/week; ~0.8 presence over five days | 0.8 per employee | 0.8 per employee |
| Overtime risk | Medium (long days) | Medium–high if demand unchanged | Low if workload scaled down |
| Margin impact | Depends on productivity / absenteeism | Cost pressure until output recovers | Cost savings, revenue risk |
Simulating full personnel cost
In management accounting, “employee cost” goes beyond net or gross salary: for each four-day scenario it pays to rebuild employer cost per FTE and per productive hour.
Salary base. Monthly or contractual hourly salary, 13th salary and recurring bonuses if provided by contract or GAV, fixed allowances. When moving to part-time, check clauses on gratuities and benefits (car, phone, training) and whether they remain proportional.
Social contributions and insurance. OASI/DI/IC, ALV, family compensation funds, LPP (employer rate), non-occupational/occupational accident insurance, any supplementary LPP and sickness costs (cantonal model or collective insurance). With unchanged salary, the contribution base does not change; what changes is cost per hour if actual hours decrease.
Ancillary costs. Training, equipment, travel expenses, allocation of overheads (space, IT). Fewer days on site may lower some items, but not always in linear proportion.
Practical formula for fully loaded hourly cost
For one employee: (annual gross salary + employer contributions + annual ancillary costs) ÷ actual annual hours worked. Compare the current scenario (e.g. 5×8 h = 2,080 contractual annual hours, reduced for leave and absences per calendar) with the four-day scenario, including estimates of paid overtime (minimum 25% premium unless compensated with time off, under CO/GAV) and temporary replacements.
Recording costs by cost centre or project in Accountex shows whether hour savings in one department are absorbed by overtime or lost mandates elsewhere.
Operational coverage and FTE capacity
A closed or reduced Friday creates a service gap if customers, suppliers, or internal processes assume daily availability. The simulation must translate calendar and hours into measurable capacity:
- Map critical processes (order fulfilment, support, production, procurement) and the minimum presence threshold per day.
- Calculate net FTE: sum of employment percentages minus average absences (sickness, leave, training).
- Assess staggered shifts, paid on-call, remote work on the fifth day (only if compatible with contract and LTr).
- Quantify paid alternatives: fixed-term staff, temporary work through a licensed agency (with admin burden and equivalent contributions), internal reallocation, selective withdrawal from low-margin jobs.
| Coverage option | When it makes sense | Typical cost effect |
|---|---|---|
| Internal reorganisation | Slack capacity in other teams | Low cash-out, overload risk |
| Part-time hire 20–40% | Recurring, predictable gap | Additional FTE cost + onboarding |
| Planned overtime | Short peaks, rare skills | Wage premium, LTr limits (e.g. annual caps) |
| Ad hoc outsourcing | Non-core functions | Variable cost, VAT deductible if applicable |
Impact on margins: revenue, productivity, and risks
The income statement reacts to the interplay of personnel cost, output volume, and revenue. Many SMEs trial a four-day week hoping for less sickness absence and greater focus; others see delivery delays or less upselling. The simulation should not automatically assume a 20% productivity gain.
Build at least three scenarios: conservative (output −5%, cost unchanged), neutral (stable output, cost unchanged or −20% if part-time), optimistic (output +3–5% from lower absenteeism). Apply coverage costs and overtime to each scenario.
Gross margin
Compare expected revenue (unchanged prices vs premium for five-day service) minus variable production costs. If capacity falls, check whether material costs drop in parallel or stay fixed for jobs in progress.
Operating EBITDA
Include all simulated personnel cost and coverage items. Better EBITDA with unchanged salaries almost always requires a measurable effect on productivity or revenue; document the assumption for the board or shareholders.
Simplified numeric example (10 employees)
Services SME, average employer cost CHF 95,000/year per FTE, 10 full-time FTE, expected operating margin 18% on revenue of CHF 2.4 million. Move to four days with 32 hours paid at 100% for all, with no additional hires:
| Scenario | Annual personnel cost | Coverage / extra | Revenue | Indicative operating margin |
|---|---|---|---|---|
| Status quo (5 days) | CHF 950,000 | — | CHF 2,400,000 | 18% |
| 4 days, output −8% | CHF 950,000 | CHF 25,000 overtime | CHF 2,208,000 | ~10% |
| 4 days, stable output | CHF 950,000 | CHF 10,000 reorganisation | CHF 2,400,000 | ~17% |
| 80% time, output −5% | CHF 760,000 | CHF 40,000 0.5 FTE temp | CHF 2,280,000 | ~20% |
Illustrative figures: adapt to your chart of accounts, actual contribution rates, and revenue mix. Assumption: other operating costs unchanged (CHF 1,018,000). The aim is to show that, at unchanged payroll cost, margin erodes if revenue follows hours no longer delivered.
Compliance, documentation, and accounting trail
Every material change to hours and pay should follow a written agreement (contract or addendum), with clear indication of weekly hours, allocation across days, overtime compensation, and holiday treatment (minimum four weeks per employee, unless contract or GAV provides more). Check compatibility with any sector GAV and internal regulations.
On the accounting side, open analytical accounts or cost centres “Four-day week project” to record overtime, temporary staff, and productivity losses during the pilot phase. At year-end, the notes or management report can comment on the effect on personnel costs and margins, useful also for dialogue with the bank and audit (if applicable).
Before full roll-out, a trial period with agreed KPIs (delivery times, open tickets, overtime hours, absenteeism) allows updating the simulation with real data rather than assumptions.
Checklist for a numbers-driven decision
- Define the model (hours, salary, calendar) and verify compatibility with CO, LTr, and GAV.
- Recalculate annual employer cost and fully loaded hourly cost per scenario, including contributions and LPP.
- Quantify net FTE and coverage gaps by weekday and department.
- Estimate coverage costs (hires, temp staff, overtime, outsourcing).
- Model revenue and output in conservative, neutral, and optimistic scenarios.
- Compare operating margin and liquidity (monthly payroll unchanged unless new calendar, but possible overtime spikes).
- Document contracts, record pilot costs in management accounting, and review after 3–6 months.