Labour Shortages and Diversity Opportunities in the Japanese Market

The Japanese labour market is facing a labour shortage problem which has become more pronounced over the past few years. Low birthrates and an ageing population have led to a shrinking of the working-age population and consequently to a shortage of labour supply. The simultaneous retirement of the baby boomers - a large generation born during the high growth period of the post-war era - means that the number of experienced workers in a particular period of time is reduced from the market all at once. Such situations can cause problems for the transfer of skills and know-how in many companies: according to the 2022 Talent Shortage Survey, three out of four employers in Japan have a shortage of staff, with the most in-demand jobs being sales, IT-related and technical manufacturing jobs. The study found that the most in-demand occupations include sales, IT-related occupations and technical occupations in the manufacturing industry.

Furthermore, the increase in part-time employment and the associated low treatment of workers is leading to a decline in long-term career development and a sense of belonging in the workplace. In particular, small and medium-sized enterprises (SMEs), which make up the bulk of the economy, often offer inferior wages and benefits compared to larger companies, making it even more difficult to attract and retain staff.

While economic factors such as the creation of new business opportunities and the expansion of international markets contribute to this labour shortage, social and cultural factors cannot be ignored. Many traditional elements remain strong in Japan's work culture, such as long working hours, a lifetime employment system and a male-dominated work environment. These factors create a gap in values between the new generation, women and foreign workers, resulting in difficulties in securing human resources and introducing diversity.

Here, there is a view that the seemingly unrelated topic of diversity could contribute to solving Japan's labour shortage. How can it be tackled?

Making the most of a diverse workforce: Japan's labour market has long been built around men. However, by recruiting and utilising previously under-utilised human resources, such as women, the elderly and foreign nationals, it can be expected to contribute to resolving the labour shortage.

Introduction of new values: diversity-conscious organisations attract people with diverse values and ways of thinking, which makes it easier to come up with innovative ideas and new business models.

Diversity in working styles: introducing diverse working styles, such as flextime, telecommuting and shorter working hours, makes it easier to accommodate people with different lifestyles and values.

Restructuring of job advertisements: companies can promote diversity-conscious working styles and work environments to encourage applications from a diverse workforce.

Japan's labour shortage problem requires not only short-term measures, but also a long-term perspective. By promoting diversity initiatives, we can take a major step towards creating a new labour market, transcending the boundaries of conventional stereotypes and ways of working.