How to Offer a 4-Day Work Week as a Benefit for Your Small Business

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The bottom line is this: small businesses can’t compete with big corporations on salary alone. But offering a compressed work week policy — like a 4-day work week — can be a game changer to attract and keep talent. Sound too good to be true? It’s not, but there’s a structure and some financial savvy behind making it work.. Exactly.

Ever wonder why some smaller companies seem to punch above their weight when it comes to employee satisfaction and productivity? It’s because they get creative with benefits, flexible schedule arrangements, and smart health coverage alternatives. In this post, we’ll break down step-by-step how you can offer a 4-day work week as a benefit without blowing your budget, avoiding the common mistakes, and even improving your bottom line.

Why Benefits Are a Competitive Advantage for Small Businesses

When you’re a small business, payroll dollars are tight. Offering salary increases to compete with bigger companies can be an uphill battle. But benefits? They’re a weapon you can wield without necessarily raising the paycheck.

Attract better candidates: Job seekers nowadays prioritize flexibility and work-life balance more than ever. Improve retention: Employees who feel valued and less burned out stick around, saving you recruitment costs. Boost productivity: Studies show a 4-day work week can actually increase output — you get more done in less time.

Putting it simply, a compressed work week policy can create a culture that makes employees want to stay and perform better. But benefits aren’t just big-ticket medical plans — think smaller, smarter options.

So, What’s the Catch? How to Afford a 4-Day Work Week Benefit

Offering a shorter work week sounds like a luxury, especially for cash-strapped small businesses. The common misconception is you need a ton of extra money to pull this off. The truth? By tweaking your benefits strategy, you can pull it off for about 5-10% of your payroll — sometimes less.

The secret sauce lies in thinking beyond traditional group health insurance, which is usually the biggest cost. Instead, use tools like QSEHRA (Qualified Small Employer Health Reimbursement Arrangement) or ICHRA (Individual Coverage Health Reimbursement Arrangement). These let you reimburse employees for their own individual health insurance plans with pre-tax dollars.

You ever wonder why both qsehra and ichra give your employees flexibility and choice while you maintain cost control. Last month, I was working with a client who wished they had known this beforehand.. You don’t https://www.workast.com/blog/affordable-employee-benefits-options-for-small-business-owners/ have to pay for a one-size-fits-all plan and can adjust budgets based on your needs. Plus, you may qualify for tax credits through programs like the SHOP Marketplace, which can reduce your health insurance costs even more.

How QSEHRA & ICHRA Work in a Nutshell

Feature QSEHRA ICHRA Who qualifies? Employers with fewer than 50 employees Employers of any size Tax treatment Tax-free reimbursements to employees Tax-free reimbursements to employees Employee choice Employees use reimbursement for individual plans Employees use reimbursement for individual plans Employer control Fixed reimbursement limits Flexible design options by class of employee

Implementing either QSEHRA or ICHRA can reduce your benefit costs dramatically compared to traditional group health insurance while still providing employees valuable health coverage.

Flexible Schedule Arrangements: Making the 4-Day Work Week Work

Shifting to a 4-day work week isn’t just about chopping hours. The goal is maintaining — or even improving — productivity during compressed time. That means you need a plan:

Set clear expectations: Define work hours and performance goals upfront. Communicate frequently: Use tools like Workast — a task management software designed for remote and flexible teams — to keep everyone aligned. Allow flexibility: Different employees may prefer different 4-day models — like four 10-hour days or staggered days off. Measure results, not clock time: Focus on deliverables and outcomes rather than hours spent at the desk.

By setting the ground rules and using smart tech to stay on task, many companies see 4 day work week productivity jump. Employees want to work smarter, not longer, and flexible schedule arrangements give them the freedom.

Common Mistake: Ignoring What Employees Actually Value

One pitfall small businesses fall into is guessing benefits instead of asking. A ping-pong table might look cool, but if your team’s priority is more time off or affordable health plans, it won’t move the needle.

Here’s what to do instead:

Survey employees: Find out what matters most to them. PTO? Health coverage? Remote work? Test small perks first: Introduce modest but meaningful non-medical perks like flexible scheduling or a small monthly stipend for wellness activities. Adjust based on feedback: Benefits don’t have to be permanent. Fine-tune your offerings as you learn.

Low-cost perks like mental health days, flexible hours, or even a simple casual dress policy can have a surprisingly high impact on morale — often more than expensive benefits that employees don’t use or want.

Sample Budget: What 5-10% of Payroll Looks Like

Let’s put some numbers on this. Imagine you pay your team a total of $500,000 annually in wages. Setting aside 5-10% for benefits means you have $25,000 to $50,000 for the entire benefits package — including health reimbursement arrangements, PTO, and other perks.

Expense Low Estimate (5%) High Estimate (10%) QSEHRA/ICHRA reimbursements for health insurance $15,000 $30,000 Extra PTO and flexible schedule accommodations $5,000 $10,000 Non-medical perks (wellness, subscriptions) $5,000 $10,000

This budget model shows you don’t need a huge safety net to make a compressed work week and meaningful benefits a reality.

Getting Started: Your Action Plan

Talk to your team: Survey or discuss what benefits and flexible work options matter most. Explore QSEHRA and ICHRA: Consult an advisor or use resources at HealthCare.gov to understand paperwork and compliance. Implement a trial compressed schedule: Start small — maybe one department or a pilot team. Use tools like Workast: Keep projects and communications streamlined to sustain productivity. Review and adjust: Check in after 3-6 months, tweak schedules and benefits based on real data.

If you do it thoughtfully, a 4-day work week as a benefit can be a win-win: happier employees, better productivity, and a sharper competitive edge.

Final Thoughts

Offering a 4-day work week combined with affordable, flexible benefits isn’t a pipe dream — it’s a strategic advantage for small businesses willing to get creative. The key is matching benefits to what your employees truly want, leveraging tools like QSEHRA, ICHRA, and government programs, and managing productivity with flexible schedules and smart tech. Skip the cookie-cutter benefit brokers and invest your 5-10% payroll wisely.

Remember, it’s not just about offering benefits; it’s about offering the right benefits in a way that fits your budget and business culture. That’s how you build loyalty, reduce burnout, and keep your small business competitive in a big market.

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