Why This Company Won’t Let You Work More Than 40 Hours

Recently, on an episode of my SiriusXM radio show, In The WorkplaceI caught up with Jason Fried, co-founder and CEO of Basecamp, a Chicago-based company best known for its project management tool, also called Basecamp.

There’s quite a lot of interest these days in what’s happening in the tech industry. These companies always seem to be doing neat things when it comes to managing their people.  Basecamp is one of the coolest tech companies today. Founded in 1999, the firm prides itself on a small staff, 40-hour maximum workweek and the opportunity to work remotely.

Over 120,000 companies subscribe to Basecamp monthly. Millions of people use the software around the world. But only 51 people work for the company. The decision to keep his workforce small is intentional, Jason said, even though it runs counter to conventional wisdom that “bigger is better.”

“I think growth is a disease in many cases,” Jason said. “Every business is trying to get as big as they can but they don’t know why. It’s just this thing you do. We want as many customers as we can get. But I want to know everyone’s name. I want to keep the number of people small and keep them around for a long time.”

Basecamp is most known for keeping a 40-hour work week (no nights or weekends), which sounds delightful to most people. The company keeps to its 40 hour goal by eliminating in-person meetings and conference calls. Most employees work remotely and correspond with each other through Basecamp or occasionally via Google Hangouts or Skype.

“You should have a life outside of work,” Jason said. “Forty hours is enough if you give employees 40 hours to work without stealing 18 back in meetings and conference calls. If you can eliminate most of that – and we have – you give people 100 percent of 40 hours to themselves. It’s like working 60 hours at another company. You get the same amount of work done and have a life. As an employer, I don’t feel entitled to anyone’s time at night or on weekends. That’s their time.”

But how do you know if people are actually giving you 40 hours of serious work time? How do you manage performance?

“We look at the work, we don’t look at the hours,” Jason said. “The work is clearly laid out. I just look at the end product. We get a ton of work done because people have the time. An hour of uninterrupted time is far more valuable than four, 15-minute increments.”

Jason believes that all people are productive at different times during the day. Some people prefer to work 10 am to 7 pm while others need a long break in the middle of the day. “We let people manage their own time their own way,” he said. “You just begin when you’re ready and put in an honest day’s work and then you’re done.”

A lot of companies feel that staff members must physically report to an office in order to collaborate and get things done, but Jason disagrees.

“We’re as collaborative as anybody – we just figured out how to do it without looking at each other,” he said. “There’s a lot of inefficiency, interruptions and distractions when you’re together. This is the source of a lot of problems.”

For Jason, working remotely is a way of life. The company has been doing it for years. But he encourages businesses that are interested in the concept to test the waters by having employees work from home one day a week. “Show that the world is not going to end and build confidence, so that when people are finally comfortable with it, you can become a ‘hybrid’ company.”

Basecamp is truly unusual when it comes to taking care of its employees, offering reduced hours and three-day weekends over the summer. Every three years, employees can request a one-month sabbatical. The company also pays for employees and their families to travel around the world, all expenses paid. This keeps everybody happy.

“Every year around the holidays we put together a menu of 12 to 15 different trips and every employee who has been here at least a year gets to choose one if they want,” Jason said. “We used to give cash bonuses, but a year later [people] forget what they spent it on. You send them to Tokyo and they will never forget it. That’s the kind of company that I want to be.”