Japan’s hiring challenges and worker dissatisfaction unveiled
In 2023, a recent survey has unveiled that a staggering 90% of organizations in Japan are grappling with intense competition in their hiring processes. Looking ahead to 2024, 42% of these entities anticipate that the foremost challenge in recruitment will be the ‘lack of skilled candidates available,’ followed by ‘no sign off for headcount’ at 15%.
Notwithstanding these challenges, insights from the research, carried out by the global talent services firm Morgan McKinley as part of its 2024 Salary Guide, indicate that 67% of Japanese businesses are still gearing up to hire within the next six months.
On the flip side, 34% of professionals in Japan are actively planning to explore new job opportunities in the same time frame. The survey also brought to light that a significant 58% of workers express ‘neutral,’ ‘dissatisfied,’ or ‘highly dissatisfied’ sentiments regarding their benefit packages. The top five sought-after job benefits among Japanese workers include pension plans (above statutory requirements), bonuses, employee stock options, work-from-home opportunities, and flexible working hours.
Topping the list of reasons prompting a job change is the desire for a ‘higher salary’ at 44%, closely followed by the appeal of ‘meaningful and impactful work’ in terms of role and responsibilities at 25%. Encouragingly, 46% of Japanese professionals hold optimism about receiving a salary increase in 2024, with 55% of employers intending to enhance salary offers for specific high-demand roles.
Lionel Kaidatzis, the Managing Director of Morgan McKinley Japan, remarked, “Recruitment in Japan faced challenges throughout 2023, albeit not to the same extent as in other global markets. A weakened Yen and increased inbound tourism have supported hiring in certain industries.”
He added, “With constrained headcount, organizations have raised the bar for talent quality, intensifying competition for top talent amid an ongoing scarcity. Skilled professionals fielded multiple offers, and organizations lost out on talent due to protracted interview and approval processes.”
Kaidatzis concluded, “While successive governments have attempted to expedite wage increases, the issue persists, exacerbated by inflation and fluctuating FX rates, reducing consumer spending power.”
“For organizations to attract and retain the best talent in 2024, a review of compensation structures is imperative, aligning them with other G7 economies.”
The Morgan McKinley 2024 Salary Guide serves as a valuable resource, offering current and precise salary data for various roles across Japan. It equips hiring managers with industry benchmarks to determine employee compensation, providing professionals with greater visibility into their potential earnings.
This comprehensive research, encompassing insights from 650 businesses and 3,400 professionals, delves into companies’ hiring intentions for 2024, the primary motivators for job changes, and expectations regarding salary movements.
