BIELEFELD, Germany—Lasse Rheingans realized taking time to check Facebook or respond to reply-all emails distracted him from work goals and caused him to spend extra hours at the office rather than with his young daughters.

So when he acquired a small tech consulting firm here in late 2017, he introduced a radical idea: Reduce the workday to five hours, from the standard eight, while leaving worker salaries and vacation time at the same levels.

“They...