3) It would be a more desirable job. Retention goes up and maybe you can get better people. Your employees are happier and so are their families. When you have to do "crunch time" people are less bitter.
What if you offer a 6-hour workday, and people who want to work less than 6 hours will apply... because this is still the best existing alternative for them? The retention goes up, but your employees will be unhappy, because they actually wanted less than 6 hours.
Meanwhile, the company that requires 8 hours will get a lot of people who are okay with working 8 hours (if that includes 2 or 4 hours on social networks), and a few people who are not okay with that, but still happier than your employees on average.
Meanwhile, the company that requires 8 hours will get a lot of people who are okay with working 8 hours (if that includes 2 or 4 hours on social networks), and a few people who are not okay with that, but still happier than your employees on average.