Addressing talent shortages in Japan

A lot has been said recently about Japan’s declining population and its effect on the local workforce. Japan is beginning to face labour shortages due to low birth rates and an ageing population. Stepping into this debate is Yoichi Masuzoe, governor of Tokyo, who has announced a plan to introduce more foreign workers to the capital.

This effort is billed as an opportunity to re-establish Tokyo, which has lost ground as a key Asian business hub to places such as Hong Kong and Singapore.

In addition to the deregulation of immigration policy, Masuzoe has outlined plans to implement special districts to make it easier for foreign workers to live and work in Tokyo. It’s a bold move, and presents a very different vision for Japan, which has never experienced mass immigration.

At Michael Page, we are noticing labour shortages in a number of industry sectors. In the construction industry, for example, the daily remuneration for available workers has risen to as high as ¥80,000.

We are also seeing significant shortages in the healthcare and aged care sectors. There is an identifiable requirement to act to ease the pressures of the declining workforce.

In addition, there are financial benefits to allowing foreign workers to take up employment in Japan. Encouraging domestic business growth in Tokyo is likely to result in a spillover of foreign firms seeking to move closer to the action—either by expanding their current operations in Japan, or by setting up new business centres—which would certainly prove beneficial over the long term.

However, this practice goes against current hiring trends.

Given the Japanese language requirements for most positions in Japan, the majority of candidates placed by Michael Page are either monolingual or bilingual Japanese candidates. With only 4% of the population speaking English, it remains to be seen how international workers will fare in Tokyo over the long term.