At what had been a quiet weekly meeting in April, Mitsuki Shimoji’s boss suddenly startled his staff of 20 system engineers, divided among two teams, with a drastic new policy aimed at curbing overtime.
The manager told them that he would be speaking with each staff member at 5 p.m. every day to check their plans for overtime work and whether their reasons for working late were valid.
A shocked silence fell over the teams. “Deep down they should have thought that was a positive change, but it was also a pain” to have to explain one’s intention to do overtime, said 26-year-old Shimoji, who is in her fourth year at the Tokyo-based subsidiary of a life insurance provider.
For decades, employees in Japan had by and large been clocking in long hours, taking a fraction of their annual leave and remaining stuck in a rigid work schedule. Under Prime Minister Shinzo Abe’s drive to transform the way people work, there have been some indications of change trickling in. Momentum to review working habits is gaining, especially after the Diet in 2018 passed a working style reform bill to cut overtime and encourage a healthier work-life balance. The regulation took effect in April this year.
For three months, Shimoji’s boss’s persistent grilling of subordinates paid off — the teams’ average amount of monthly overtime fell by between 20 percent and 33 percent, from 10 to 15 hours to 8 to 10 hours, while Shimoji’s own halved from 10 hours to five. She recalled thinking “I’ve never seen such a low number of hours.” The effort was short-lived, however. After the teams entered their busiest times of the year, overtime hours increased sharply — as though the mindset of the managers hadn’t really changed at all.
This year alone has also seen other — perhaps more advanced — examples of working style reform. In April, Sumitomo Life Insurance Co. adopted “employee productivity points” for personnel evaluation, rating its desk workers based on their task output in addition to the conventional metrics based on the value of insurance contracts. The initiative — a rare move for a Japanese company — gives a higher score for workers who achieve the same performance in fewer hours. Combined with telecommuting and other arrangements, the total number of hours for all employees between April and October dropped between 6 percent and 7 percent, compared with the same period last year, according to the company.
Microsoft Japan Co., meanwhile, sparked a flurry of media attention after it announced that a trial of a four-day workweek covering its 2,300 regular workers in August led, in combination with other factors, to a 40 percent jump in their productivity.
Before the working style reform legislation was enacted in April, overtime could be effectively unlimited as long as labor and management agreed to go beyond the basic cap of 45 hours a month, or 360 hours a year. Using up annual paid leave was not mandatory.
The new regulation imposes a hard cap on overtime at 100 hours a month, or an average of 80 hours over multiple months, and 720 hours a year, starting this past April for large companies and a year later for small to midsize entities.
It also obliges employers to make workers who are assigned 10 days or more of paid vacation take at least five days off a year. Companies that fail to abide by this rule will be fined up to ¥300,000 per employee. The changes are seen as a step forward in a country notorious for exhausted salarymen and even death from overwork, known as karōshi.
An Expedia online survey on 19 countries shows that Japanese workers took only 50 percent of their allotted holidays in 2018, the lowest ratio among the countries surveyed. The Japanese government had been aiming to raise that rate to 70 percent by 2020.
The figure for Japan compares with 93 percent in South Korea and Singapore, 71 percent in the U.S. and 100 percent in France. The most cited reason for hesitation was “labor shortages,” according to the study.
Fifty-eight percent of Japanese workers said they felt guilty taking days off, the highest ratio, though South Korean peers were close behind at 55 percent.
Paid leave, of course, is hardly a novel perk, but companies are taking a fresh look at the system and rethinking benefits for workers.
Limiting overtime and enforcing time off are not the only ways to reduce strain on workers. Another way is to give them more freedom to choose the times they work.
Flextime lets workers decide when they start and finish as long as they satisfy the total number of work hours set for a certain period. The reform legislation extended the maximum period from one month to three, enabling workers to allocate hours across months at their discretion
Flextime, though, has yet to become widespread, partly because it is not a one-size-fits-all answer. It is more compatible with jobs that involve individual tasks, such as software development. In 2018, a meager 5 percent of privately held companies with 30 or more full-time workers implemented the policy, according to health ministry data.
At least one Japanese company has reported a positive effect from its flex policy. In May, e-commerce operator DMM.com started allowing 1,000 or so regular and contract employees to start anytime between 8 a.m. and 11 a.m. and finish between 5 p.m. and 8 p.m., and asked them to assess the impact a month after its introduction.
Seventy-seven percent of respondents said that it became easier to work, while 22 percent replied that they felt nothing had changed. The biggest positive, staff felt, was the ability to work efficiently by using morning and night hours, followed by the ease of keeping in good shape. Respondents rated the difficulty of booking a meeting room as the biggest problem because room reservations tended to concentrate during core work hours, according to the company.
The flexibility was intended to alleviate congestion at elevators, offer more freedom in ways of working and generate a positive impact on recruitment, said the company’s spokeswoman Kaori Taira.
Japan is still in the early days of its working style reforms, however, and one bottleneck is that many older workers in managerial positions are having trouble tuning in to the shifting perceptions of work.
In the case of system engineer Shimoji, her boss phased out his overtime checks at the onset of busy seasons. She believes that the boss and other higher-ups failed to recognize the significance of the working style reform, or spread awareness.
“In 2019, the biggest mindset change is required for managers,” said Yoshie Komuro, president of working style consultancy Work Life Balance Co. She said today’s midlevel managers cut their teeth during the “demographic dividend phase” (between the 1960s and 1990s), in which the working-age population exceeded that of children and the elderly. Labor was thus plentiful and cheap, and the longer employees worked, the more money companies could make.
Working style reforms such as cutting work hours are steering managers in “the polar opposite direction,” Komuro said. For the reforms to take root, she said, employers need to convince managers, such as through in-house training, that the country’s shrinking and aging population has forced a paradigm shift.
As some companies are successfully demonstrating their adoption of the reforms, Komuro believes that, over time, “more companies will get the message.”