Bank of Tokyo-Mitsubishi UFJ will allow most of its contract employees to work until 60, the retirement age set for its regular workers, in an effort to secure skilled personnel amid a shrinking workforce in Japan, a source familiar with the matter said on Friday.
Starting next April, the core banking unit of Mitsubishi UFJ Financial Group Inc. will offer the new scheme to those working for at least three years on a fixed-term contract basis, who roughly account for 90 percent of its 11,000 contract workers, the source said. The bank’s overall workforce totals 45,000.
The bank will introduce the program ahead of a new requirement, to be implemented under the revised Labor Contract Act, for companies to allow contract employees with the minimum five years of service to work on a non-fixed term basis starting from April 2018.
For nonregular employees who need to renew their contracts every six or 12 months, the bank’s latest plan will help ease their concerns over future employment and raise their morale.
Most of the bank’s contract workers are serving as tellers or engaged in clerical work, and their responsibilities will remain in these areas when they apply for the program.
As the government estimates the working population could drop as much as 42 percent by 2060 in the worst case scenario, a looming challenge for Japan Inc. is to recruit necessary and talented personnel down the road.
The move is likely to encourage other firms in various business sectors to follow suit. For example, Fast Retailing Co., the operator of the Uniqlo casual fashion chain, has already introduced a new personnel system to actively promote part-timers to regular employees. Ikea Japan K.K., the Japanese unit of the Swedish retail furniture giant, is reportedly considering setting no time limit on contracts of its part-time staff.
More flexibility in employment is expected to help companies use more female and older workers in an effort to cope with a shrinking working population.
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