Germany’s 34-Hour Workweek Experiment: One Company’s Bet on Full-Pay Shorter Hours

Galletti introduces a 34-hour week with full pay as Germany faces a looming shortage of 6.5 million workers by 2030, highlighting innovative retention strategies.

An Italian-owned climate-technology manufacturer is rewriting the rules of retention in a tight German labour market. Galletti, which employs around 250 people, has introduced a 34-hour working week with full wage compensation, backed by higher social benefits and performance-linked bonuses. The move stands out as companies across Germany scramble to hold onto skilled staff in the face of a demographic exodus.

The Looming Talent Exodus

By 2030, roughly 6.5 million people will leave Germany’s workforce, intensifying competition for every qualified employee. The shortfall is not spread evenly. In Schleswig-Holstein, reports predict a deficit of over 100,000 skilled workers by 2035, as some 335,000 employees enter retirement during that period. The Main-Rhön region faces a similar squeeze: the local employment agency expects around 90,000 workers to exit within five years, with only about 70,000 replacements coming through.

Tech-heavy IT has seen a slight drop in unfilled positions, but experts attribute that to cyclical pressure and delayed projects rather than a structural improvement. Demand remains strongest for professionals who can bridge technical expertise with business acumen.

Tools to Keep Talent

Retention is becoming more systematic. In mid-July, a new book titled “Mitarbeiterbindung” (Employee Retention) by Gunther Wolf hit the shelves, offering analysis frameworks and key-performance-indicator systems to cut turnover. Consultants now argue that recruiting alone cannot solve the shortage; the priority must be holding onto existing high-performers.

Apprenticeship Tech Booms, Places Lie Empty

The market for apprenticeship technology is expanding fast. Between 2023 and 2026, the number of providers surged from 91 to 194. Yet roughly 54,000 training positions remain unfilled each year, and the dropout rate hovers around 25 percent. An apprenticeship report for 2025/26 reveals what young workers value most: a secure job tops the list for 75 percent, while 70 percent cite a balanced work-life split as essential.

Industrial Staff Swaps Take Shape

In Friedrichshafen, companies are experimenting with a novel solution. A collective agreement now permits employees to move between firms. While automotive supplier ZF sheds jobs, Rolls-Royce Power Systems at the same location is hiring for numerous positions. Defence and security-technology players such as Thales Deutschland and Hensoldt are also planning significant recruitment, tapping synergies with automotive-sector partners.

Regulation Reshapes HR

The EU AI Act classifies artificial-intelligence applications in human resources—recruiting and performance evaluation, for instance—as high-risk. Consulting firm managing directors call this an urgent governance challenge, demanding transparency and new accountability structures.

The Corporate Sustainability Reporting Directive (CSRD) requires detailed disclosures on working conditions and occupational health. Company health-insurance data now feed into audit-relevant metrics. Organisations such as Great Place To Work Austria are pushing for a stronger strategic role for human-resources departments as a result.

Labour Law in the Pipeline

Jurists at an international law firm reviewed planned reforms in mid-July. Potential changes include requiring a doctor’s note from the first day of illness, broader opportunities for fixed-term contracts without cause, and a likely pivotal role for works councils in shaping those rules.