LDN - Business

Japan Inc scrambles for job-hoppers to cope with labor shortages

[July 05, 2017] By Tetsushi Kajimoto

TOKYO (Reuters) - Japan's labor shortage has pushed job-hopping to its highest since the global financial crisis, as companies scramble for workers with experience in the rapidly-ageing economy.

Job-hopping goes against the grain of Japan's work culture, where many companies hire graduates and employ them until they retire. But the country's jobs-for-life system is slowly giving way as firms curb labor costs and society shifts.

Switching jobs for better conditions is no longer taboo amid a tightening labor market, and the trend is being led by mid-career workers.

"There's always a risk of failure. But you can't get what you want if you don't try," said Hiromichi Itakura, 44, head of a medical job placement department at Saint Media Inc in Tokyo, who changed jobs in January.

"I took up this job because it gives me a more responsible post. As a salary man, I also wanted a higher salary," he said, adding that his pay is now 20 percent higher than previously.

The number of job-hoppers rose for the seventh straight year to 3.06 million in 2016, the highest since 2009, though it still accounts for just 4.8 percent of the labor market.

Older workers have more opportunities because of demographics: a fast-ageing society, low birth rate and falling working-age population. The jobless rate has stood at a near two-decade low while the jobs-to-applicants ratio is at a 43-year high.

Big firms say the labor market is at its tightest since 1992, according to the Bank of Japan's latest "tankan" survey published this week.

Though job turnover is still low relative to other major economies - the change should be welcome news to Prime Minister Shinzo Abe, who has been championing labor flexibility and merit-based pay - with little success so far.

Enhancing labor mobility is expected to help raise low productivity and boost wages, getting Japan convincingly out of a deflationary rut.

COMPETITION FOR WORKERS

Companies facing labor shortages are willing to pay for battle-tested workers who don't need as much training.

Electric motor maker Nidec Corp is actively hiring mid-career engineers and remunerating them for their experience.

"Competition is tough for tried-and-true personnel," a company spokesman said on condition of anonymity. "We are doing our best to persuade talented people to join our company."

Job-hoppers aged between mid-40s and 65 or older are on the rise, hitting their highest, according to comparable data going back to 2002.

"The mid-career job market is booming," said Hirofumi Amano of en-japan inc, a job placement agency.

People older than 35 used to be considered past their prime in the mid-career market but these workers are now sought after. Companies are seeking experienced managers and engineers and offering higher pay, Amano said.

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Masae Miyachi, 41, a staff worker of Kaonavi Inc., smiles during an interview with Reuters at the company's office in Tokyo, Japan June 29, 2017. REUTERS/Toru Hanai

Workers who secured higher salaries from changing jobs outnumbered those whose paychecks shrank, labor ministry data from 2015 showed. A quarter of job-hoppers saw their salaries rise by 10 percent or more.

In comparison, average base wages in April rose just 0.4 percent from a year earlier.

The International Monetary Fund has urged Japan to enhance worker mobility to strengthen productivity and wage pressures.

"Low labor mobility, a strong preference for job security, and wage setting based on past inflation constitute the main bottlenecks for triggering needed wage-price dynamics."

NEW ATTITUDE

The rising mid-career job market reflects Japan's changing business climate and evolving attitudes about lifetime employment and seniority-based promotion, analysts say.

"Look what happens to even big firms like Toshiba, there's no guarantee for job security. Lifetime employment is something of the good old past," said Masae Miyachi, 41, of an IT venture company kaonavi, inc.

Miyachi changed jobs a year and half ago and her annual salary has now increased by 1 million yen ($8,857), helping her finance a home loan. "You need to carve out a career for yourself to earn stable income, and I'm doing just that by changing jobs."

Japanese firms have curbed labor costs by replacing full-time jobs with part-time positions since the asset-inflated bubble burst in the early 1990s.

Now a rising rank of non-regular workers - including part-timers and contract workers - account for nearly 40 percent of the workforce.

Hiroaki Okutani, a 57-year-old contract worker at a logistics company Ueda Co Ltd, who left his job at a food processing firm two years ago, said his decision was partly due to anxiety about life after retirement.

"There's no compulsory retirement with this job," Okutani said. "I'm happy working here as long as my body holds up because I don't think I can live on my pension alone."

(Editing by Jacqueline Wong)

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