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Overall score

Score by Indicator

5.7
in 2016 6.0
0 2.5 5 7.5 10

Key drivers

Labour market flexibility

Japan’s labour market flexibility has declined, with the latest World Bank ‘Doing Business’ findings highlighting structural problems and bureaucracy. Japanese businesses will therefore find it harder to employ workers as they come up against obstacles.

Overall wage pressure

The tightening of Japan’s labour market has been offset to some extent by falling wage pressure. Whole economy wage growth has been sluggish.

Wage pressure in high-skill industries

Relatively low wage growth in high-skill industries than lower-skill ones last year has reduced industry wage dispersion.

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COUNTRY OVERVIEW

Ground View

Marc Burrage, Managing Director, Hays Japan

Japan is facing tough challenges in future-proofing its workforce as the working age population shrinks. The pace of technological change in the country creates opportunities for businesses to develop a new vision and purpose to attract millennials into their workforce by creating targeted and logical solutions built around automation, virtual collaboration and partnerships. Japan is grappling with the reform of its working practices in areas such as flexible working, diversity in all guises and skilled migration, as the Government looks to change how people work to improve the productivity, the wellbeing of employees and to introduce measures that would stimulate the growth in wages. Increasing wages is seen as critical in helping to unlock better growth opportunities for Japan.

Marc Burrage, Managing Director, Hays Japan

Country Profile

Japan’s unemployment rate is low, at 3.1 per cent in 2016, and labour market participation rate is relatively high, at 76 per cent. But despite these indications of a more pressured labour market, real wage growth has been slow.

Part of the reason may be that the skillset at Japan’s disposal are not being used to their potential. According to the OECD, literacy and numeracy are very high in Japan, but many workers do not make full use of these skills while at work.

Going forward, Japan faces considerable challenges as its working age population shrinks. The number of people aged 15 to 64 is forecast by the UN to shrink by 4.2 per cent between 2015 and 2020.

Key skills in demand

  • Mobile application engineers
  • Data scientists
  • Medical doctors
  • Junior HR bilingual candidates
  • Senior digital marketing managers

News and Press Materials

Marc Burrage, Managing Director, Hays Japan