David Stone: “Four-day work weeks have worked so well, I’m considering bringing in 3.5-day weeks”

Leaders League: What have been the biggest surprises or unexpected results since you launched the initiative?

David Stone: It’s pretty much gone as anticipated. Maybe one surprise is the impact on mental health, and it was only a surprise because we hadn’t really considered the initiative from this angle; we made the change mostly for recruitment and retention.

Every recruitment company has two necessary goals: attracting good people and keeping them. We saw a 97% retention rate during the six-month trial period; since then we’ve seen a 25% increase in productivity and a 40% reduction in absenteeism (we didn’t have a big “sickie” culture here anyway, but people taking sick days has dramatically fallen). But an associated benefit is that 87% of employees have reported that they feel their mental health has improved since we went four-day. To put that into context, one in three UK workers will take time off at some point in their career for mental health reasons: stress, burnout, whatever. So our mental health statistic was definitely a positive surprise.

COVID-19 forced your company into remote working. You’ve said before that for sales-driven businesses like MRL Consulting Group, remote working is suboptimal – how did you respond to this challenge?

We played by the rules. We provided everything everyone needed – desks, chairs, computers. We didn’t budge on our four days a week. I’m personally not a massive fan of working from home – I have five kids and really struggle to get any work done there. But every person in the company was hired with the understanding that they would work in a team-based, office-based environment. When you surprise people by taking that away, some will adapt, some won’t.

When the pandemic struck, I’d just hired four new people. It didn’t feel right to fire or furlough them, so we had them working as rookies remotely. We put a lot of effort into mentoring, coaching and supporting them. It was a very tricky transition, but ethically, we stood by our employees and did our best. Of those four trainees, two stayed with us – not bad given average turnover rates in the recruitment industry.

Given that restrictions have been easing for a while, and office work has been resuming, which COVID-era changes in work lifestyle do you think will remain permanent at MRL Consulting Group?

We do now have an official, documented working-from-home policy that’s available to all members of staff. I’m slightly old-fashioned – I like working in an office and having my people around me, and the majority of the consultants here feel the same. But we did implement an official policy that has certain criteria: you must be doing your job to a certain standard. It’s a sales job, with numeric targets: if people are struggling to meet those targets, it’s hard to provide the support and training that people need to hit those targets, so I prefer those people in the office if this is the case. But if they’re doing well and hitting targets, I’m happy to give them some flexibility.

Besides having tonnes of sanitiser and plastic screens in the office, I’m not sure there have been any other changes! The one-way system will most likely go when all restrictions are lifted. We have always offered flexible working, something we've seen more people taking advantage of since COVID, and have no desire to change that moving forwards.

What made you go for a four-day work week as opposed to, say, six-hour days five days a week?

The full story was that seven or eight years ago, I read an article about four-day work weeks by a former colleague of mine, John Nash, who now runs recruitment firm Nicholson Search & Selection. At the time, it really caught my attention, and I could see how it would work. But it simply wasn’t the right time for us as a business to implement it.

Fast-forward to a few years later: I had split with my business partner and was running the business myself. We had quarterly management meetings with our people flying in from abroad, and our German office manager tabled this four-day work-week motion. Afterwards I took him aside and I said, “Listen, if you want more holidays, you can just ask me!” But he said it wasn’t about that at all – he was coming from a recruitment and retention point of view.

So I did several months of intense research. I spoke to Nash for the first time in 20 years; he spent hours talking about how to do it, what the pitfalls and downsides would be, etc. The four-day work week has been around in Scandinavia for quite a while, and has a good track record there.

There was also the question of whether we should have floating days off, or whether everyone should be off at the same time. I came to the view that if the team came in Monday-Thursday – so no one would have FoMO! – and took Friday off, it would bring the benefits we were seeking.

It also made sense from a common-sense point of view. Honestly, not much work gets done in the office on Friday afternoons. People are coming back from lunch and counting down the hours until the weekend. It’s a dead zone in most offices. So giving people Friday afternoon off is a free giveaway from a manager’s point of view. To some extent, you’re really just giving them Friday morning off.

Various studies have shown that the average office worker does not much more than three hours of actual productive work per day. That’s about 16 hours. So much time is spent scrolling feeds, texting and water-cooler conversation. Ultimately, with our new model, I still want my 16 hours, but over four days. So I’m essentially asking employees to go from, say, three hours 12 minutes per day to four hours per day. That’s not such a paradigm shift when you look at it.

You’ve said in previous interviews that sometimes, given the nature of recruitment, calls will come in on Fridays. Doesn’t this mean staff can’t fully switch off on Fridays, given that they know they might be contacted?

I don’t expect my staff to pick up their phone on a Friday, though I don’t instruct them not to, either. Quite a few of my staff just turn their phone off on Thursday night and turn it back on on Monday.

We’re in low-volume, high-value recruitment. If we don’t react to a call immediately, we don’t lose business. But other recruitment companies, especially fast-based temp firms, don’t have that option – they might need to have 20 people onsite tomorrow. Most of the jobs we work on take a minimum of six to eight weeks to fill. So there’s really no urgent need to be “on” on a Friday – it can generally wait ‘til the Monday.

MRL Consulting Group is 25 years old this year; the fact that it is still adapting and innovating is refreshing. How else have you innovated since 1997, and have there been any experiments that didn’t pay off?

When I got into recruitment, there were no computers or phones, no LinkedIn or Monster. You had card boxes, phone directories and paper pads. That whole world has dramatically changed. Now, so much of the world is internet-based that how a recruiter does their job and gets information has really changed. Stuff that would have been really laborious years ago takes a few hours now.

But in terms of what we’ve done, a few years ago we implemented a company sabbatical scheme: for every five years’ service, you get a full month off, fully paid, target removed for that month, with £1,000 to spend on a plane ticket to somewhere exotic. This month alone, two employees are celebrating the 20^th anniversary of their arrival at MRL. There’s a lot of churn in recruitment; employee turnover is very high. So the longevity we instil is key to our success.

In January 2021, I also implemented a night shift, with people working from 1:30pm to 10:30pm to service our American market on Texan time. (That’s Tuesdays and Wednesdays; their hours on Mondays and Thursdays are shorter to make up for those long days.) I’ve got 12 people working those hours. Last quarter, America was our largest geographic market for revenue, without us even having an office there. Originally we were doing 2pm until midnight, but people struggled psychologically with getting home in the small hours.

Just before the pandemic came along, I was planning to go to Texas on a big tour, thinking of setting up an office there. Then the pandemic came, and I thought: do I need a physical office in the States? Most of our work is done on the phone; I’m already paying rent for an office in the UK; and Americans love speaking to Brits, not least because they love our accent! Why hire Americans when I can hire Brits?

I’m not afraid to take risks. I’m old-fashioned in some ways, but when I do change, I fully embrace it. I’m also the sole owner of the company, so I don’t have to get too much consensus on things.

Are there other recruitment companies doing other interesting things?

Loads of recruitment companies are piling into the four-day thing; this is pretty directly attributable to the help and advice we’ve been giving them. But I want to stop talking about it soon. There are 46,000 recruitment companies in the UK – how would MRL differentiate itself if all its competitors were doing a four-day week?

There’s talk about the unlimited holiday concept, but I’m not a fan of this. Some companies have trialled it and found after a couple of years that although the concept sounds brilliant, people end up taking less holiday than they would normally, because no one knows what’s acceptable. So that’s not something I want to consider.

A lot of companies are more open to working from home and hiring remotely. Our current employees were hired to work in a certain environment, but if people are hired on the premise of working remotely, that’s a different thing. They could be in Wales, Ireland or America. I am giving consideration to this.

Without innovating for the sake of it, are there any other potential changes you’re mulling over that could improve both productivity and employee satisfaction?

Nothing dramatic, but I am toying with something in my mind: a 3.5-day week. It would give you the perfect work-life balance. The more I think about it, the more it tickles me. Can you increase productivity just that little bit more? There’s something quite beautiful about that, and I might trial it within the next year or two and see how it goes.

After the original six-month trial, the staff said that in weeks with a bank holiday, they struggled: “We can do the work in four,” they said, “but not in three.” So staff volunteered that in weeks with a bank holiday, they’d come in on a Friday. I thought that was interesting, and very honest of them. Would 3.5 days be a bridge too far? We’ll have to trial it and take a view. I’m often a bit binary in my thinking, so 3.5 days in both directions sounds great to me!

What would you say are the biggest challenges facing recruitment firms today, and how can they best be overcome?

Vacancy levels are at an all-time high globally; there are candidate shortages everywhere. The jobs market is really candidate-driven at the moment, though this sort of thing comes in peaks and troughs.

Hiring good people for ourselves is a key challenge for all recruitment firms. People underestimate just how difficult and relentless recruitment is. Your brain has to work a certain way. People frequently enter the industry, are shocked within months, and then leave.

We want to run recruitment academies, but these can be fraught. The job sounds attractive: lots of money, lots of time off. But structured training programmes, with cold calls and having to constantly think on your feet, show a different side to the industry. The dropout rate at recruitment firms is huge; two out of three people will leave or be fired during their probation period. Think about all the time, effort, money, training and love that goes into trying to build people up, only for most of them to crash out.

So we adapted our model and hiring process. Many years ago, we were literally one of those two-in-three fail-rate shops. Like most recruitment companies, we had “360-degree recruiters” who did everything: candidate and client acquisition, cold calling, sales, fee negotiation. What I did was to break this job into its constituent parts, getting people to focus on what they’re good at.

Most people are bad at cold calling and client acquisition. Even when they’re good at it, they dread it. So we broke it up: the natural-born hunters can bring in new clients, while the natural-born farmers can fill jobs, dealing with candidates and live accounts. Having worked in this business for 27 years, and interviewed thousands of recruiters, I know that 95% of recruiters are farmers. They hate the business development (BD). But you’ve got to have the BD: clients have to come from somewhere. So this was my eureka moment: who loves opening new doors, and who hates it?

I made this change almost six years ago. If I’d realised it 20 years earlier, MRL would be five times the size. At that time, I loved the BD and the chase; I wasn’t good at the account management or the attention to detail. I could recognise that in myself. The most successful people in my company are consummate farmers: they can nourish relationships.

Interviewing for an account manager is different to interviewing for a BD person. Interviewing for a remote candidate is different to interviewing for an office-based one. You can’t take a one-size-fits-all approach; finding true motivating factors is key. We’re fussy as a company: we hire one in eight people we interview. You’ve got to be more and more discriminating (not discriminatory!) in whom you hire. We use a sales psychometric called SPQ*Gold, which is key in finding strengths, weaknesses and places to improve.

Now, nine in ten of our rookies stay, and remain successful. I’m sure other companies have tried similar things, with mixed results. Recruitment is very demanding, and it’s not for everybody.