Human Resources

The EBC Human Resources Committee recognises the efforts of the Japanese government to place priority on protecting the safety and living of the people, and the encouraging of companies to introduce telecommuting at an early stage of the pandemic. The government’s proactive policy to expand the employment adjustment subsidy scheme special measures in 2020, and extend them into 2021, has allowed companies taking advantage of the scheme to lessen the financial impact of the pandemic and protect employment, through the increasing of the cap covering the leave allowances paid to furloughed workers.

The government’s efforts to limit the spread of COVID-19 in Japan, while introducing uniform treatment of re-entry procedures for both Japanese national and foreign residents of Japan was highly welcomed, and very much hoped will continue to be consistently enforced for the benefit of all. The EBC also expects that the government will resume the issuance of new visas and landing permits for essential foreign personnel, for which the current border restrictions are adversely affecting Japanese and foreign businesses in Japan. The EBC Human Resources Committee appreciates the Japanese government’s efforts to accelerate the roll out of the vaccination program in Japan for the community at large, and recent opportunity for large companies to participate in the company administered vaccination program for their employees. The government’s plans to introduce digital vaccine passports for international travel from July 2021 is also seen as a very positive development.

The EBC Human Resources Committee is encouraged by the government’s ongoing policy initiatives aimed at shortening the workday by reducing overtime, as a central pillar of the government’s work-style reforms. At the same time, the EBC supports initiatives which encourage a focus on outcomes over time spent at work and promote greater work-life balance. Specifically, the enhancement of the flexitime system, through revisions to the Labor Standards Act from April 2019 allowing the extension of the period of adjustable working hours to 3 months, is seen as a positive step in the right direction by the EBC, as is the policy of ensuring use of annual paid leave of at least 5 days, and capping of overtime working hours to 45 hours per month and 360 hours per year including for SMEs from April 2020.

The EBC appreciates the labour market reform initiatives of the government, whilst at the same time continues to encourage a broader dialogue in promoting productivity and flexible working, through measures that can be taken to improve the way work is done, The EBC Human Resources Committee is also encouraged by the trend of major Japanese manufactures to move towards more performance and merit based pay schemes and personnel evaluation systems, that aim to boost motivation and productivity of their workforces, and hope that this may also lead to greater mobility of workers and matching of transferable skill sets and experiences in the external labour market in Japan.

The labour market in Japan continues to remain tight amid an ageing demographic and declining birth rate, representing a challenge for economic growth and competitiveness, but also an opportunity for labour market reform and deregulation. For businesses, this situation coupled with low unemployment rates has led to a limited pool of active job seekers in the labour market and shortage of skilled and unskilled workers, which has been perpetuated by the pandemic.

The EBC applauds the Government’s policy aims to promote women’s active participation in the workforce, and by calling on companies to increase women in leadership positions. Its steps in improving support for working parents are clearly important initiatives requiring concrete follow-up for a successful outcome. The Government needs for instance to continue to find creative ways to offer more public child-care centres and private child-minding services, and to support and encourage men to take child-care leave. Towards this end, the EBC Human Resources Committee believes that further efforts to change attitudes and awareness in society about childcare and paternity leave should be actively promoted, and the increase in flexible ways of working and remote work associated with the pandemic is seen as a key opportunity going forward in this regard.

The Japanese Government has previously implemented measures to improve Japan’s attractiveness to foreign professionals, which the EBC appreciates in bringing innovation to individual companies as well as positive roll-on effects to the economy as a whole. These measures have aimed at increasing the number of foreign professionals, including improving the benefits of the ‘highly skilled foreign professional visa’, and from July 2019 introducing online Japan visa renewals for highly skilled professionals, to simplify the application process when applied for by agents or employer organizations. On immigration law revisions for less skilled workers, the Japanese Government introduced a visa program from April 2019 to increase the quota of foreign workers, with a plan to allow 340,000 workers on ‘specified skills visas’ in 14 sectors to enter Japan over a 5-year period. In light of the slow uptake of visas upon the program’s inception, and the subsequent border restrictions as a result of the COVID-19 pandemic, the EBC Human Resources Committee recommends a further review of the scheme in due course by the Government for the program to be newly reintroduced, aimed at alleviating the acute labour shortage in factory operations particularly in regional areas, The EBC believes in the ongoing necessity of the program, and in the importance of overcoming various challenges in terms of cultural integration of these workers in the workplace and in daily life.

On the important theme of ‘digitalisation’, the EBC Human Resources Committee welcomes the Prime Minister Suga government’s active steps in this area, with the passing of laws to promote ‘electronic government’ and reduce the necessity for ‘hanko’ seals, and its planned establishment of a dedicated digitalization agency in September 2021. For businesses, it is expected that this initiative will provide opportunities to further benefit from productivity efficiencies from paperless processes and electronic documents, in the shift to remote work and hybrid models, by reducing the physical need to stamp ‘hanko’ seals on official documents.

Since introducing the Defined Contribution Pension Law of 2001, the Japanese government has rolled out a series of revisions to enable employers to offer more flexible and attractive pension schemes to employees. Given the current demographic trend and the inevitable stress this will place on the Japanese social security system, it is imperative that further incentives are created to encourage individuals to prepare financially for their own retirement, including further enhancing investment education programs and the ability for individuals to increase their contributions to the funds.