Primer on the Japan Job Market

Primer on the Japan Job Market
Everything should be made as simple as possible, but not simpler.
Albert Einstein

Japan’s labor force, which was 65.9 million in 2010, has changed in recent years due to factors such as a shrinking population, an aging workforce, and an increase in the number of women in the labor force. As of 2019, Japan’s unemployment rate was the lowest in the G7, and its employment rate for the working-age population (15-64) was the highest in the G7. The Japanese employment structure is known for its Simultaneous Recruiting of New Graduates and ranking hierarchy, which includes seniority wages and lifetime employment. However, after the burst of the economic bubble, Japanese firms have introduced performance-related pay and non-regular employment such as part-time, temporary, and hiring through human resource agencies.

Japan faces a labor shortage due to a low fertility rate and the retirement of the postwar generation. Employers struggle to hire due to the labor shortage, especially if they lack brand recognition or seek bilingual workers. The population aged 15-64 is considered productive, while those aged 65+ contribute to a shortage in physical care for the elderly. The government has brought care workers from Indonesia and the Philippines to fill the gap. Japan has considered bringing in foreign workers twice before, and recently, the nation has been supplementing the labor market with more female and elderly workers. Female labor-participation rate increased from 62.7% in 1997 to 70.1% in 2015, but women are still underrepresented in higher-paying jobs. Elder participation in the workforce is rising, but “irregular” positions can be insecure and lower-paying. Many elderly workers need to supplement their post-retirement income, and 42% of employees above 60 would like to continue working.

The success of Japanese corporations can be attributed to the motivation and loyalty of its workers. Japanese workers have a strong sense of identification with their employers, which has been fostered by a corporate structure that rewards seniority with job security and higher wages. This structure has also resulted in a low rate of job turnover. However, as the postwar generation has replaced the older generation, workers’ attitudes toward work have changed. Surveys show that workers’ identification with their employers is weakening, and more workers are expressing interest in changing jobs. This change in attitude is due to the socioeconomic changes that have taken place in Japan since the end of World War II, including increased prosperity and education. Additionally, older workers are finding it harder to secure positions, which further impacts their attitudes toward work.

Japan has traditionally had strict laws regarding the employment of foreigners, with exceptions made for certain designated activities and individuals with specialized skills or education. In recent years, Japan has struggled to attract potential migrants despite relatively lenient immigration laws, with few potential migrants wishing to migrate to Japan compared to other developed countries. Some employers hire low-paid foreign workers to fill unpopular jobs, as the domestic labor market is sluggish. However, strict immigration laws are expected to remain, and the influx of illegal aliens from nearby Asian countries is likely to increase. Japanese companies have established foreign subsidiaries to profit from low wages overseas, which has helped build local infrastructure and technological transfer.
When job hunting in Japan, it’s important to consider whether a company offers visa sponsorships, as this will likely be the biggest factor in obtaining a work visa. Typically, only full-time positions are eligible for sponsorship, and not all companies can afford to sponsor visas. Therefore, it’s recommended to inquire about visa sponsorship early in the interview process. It’s worth noting that for mid-career opportunities, our company can assist with both Japanese and non-Japanese candidates, primarily in the software engineering and technical professional fields. However, for those seeking other types of positions, there may be better sources of information and assistance available.

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