Companies with many foreign workers are struggling with Japan’s strict entry restriction imposed on foreign nationals aimed at curtailing the spread of the coronavirus, throwing cold water on its attempt to lure global talent, especially high-skilled professionals, amid a workforce shortage in the graying nation.

The restriction, banning a large number of people from 111 countries with valid working visas from entering and re-entering Japan, has made it difficult for many companies to hire international workers, who are deemed key to reviving the nation’s stalled economy and resolving the labor shortage.

These entry restrictions may further deal a blow to the already worsening economy, slowing down businesses dependent on foreign talent. The struggles have already surfaced in companies with new foreign hires, including e-commerce giants such as online flea market operator Mercari Inc.

Over the past two years, the firm shifted its focus toward recruiting foreign talent to strengthen its engineering unit. Currently, about 40 percent of that team are non-Japanese, and they contribute toward the development of its smartphone app and web browser. On top of that, roughly 60 percent of new recruits for the engineering team come from abroad.

“But nearly all of our newly hired foreign employees who were slated to join our company in February, March, April and May haven’t been able to come since Japan imposed its strict entry restrictions (on travelers),” said Takanobu Kuboki, Mercari’s human resources manager in charge of recruiting.

The entry ban has affected nearly 20 new foreign hires who hail from countries and regions such as the United States, United Kingdom, Switzerland, Spain, Germany, India, Taiwan, Australia, Canada, Qatar and Nigeria.

Such recruitment difficulties have caused Mercari to temporarily prioritize applicants who have valid visas and are already in Japan during the recruiting process.

“We had no other choice because we don’t even know when (foreigners coming from countries on the entry ban list) will be allowed into Japan … and we’re aware many other companies are in the same situation,” Kuboki added.

According to Fourth Valley Concierge Corp., a Tokyo-based human resources consultancy focusing on foreign workers, at least 20 companies hiring high-skilled professionals have reported that their newly hired foreign workers have been unable to enter Japan.

Yohei Shibasaki, the firm’s founder and CEO, said that between February and May, several thousand high-skilled foreign workers slated to work in Japan could have been stranded abroad due to the entry ban, including around 1,000 new graduates.

Some companies such as Cuebic Inc., a Tokyo-based digital marketing agency that employs foreign workers and offers internship programs to nearly 100 Japanese and foreign students, are already seeing difficulties in bringing in their new employees back.

A spokeswoman for Cuebic lamented that one of the firm’s new interns, a South Korean student at a university in Tokyo who joined the firm in February, hasn’t been able to return to Japan as a result of the entry ban.

“If these entry restrictions continue through October, they will most likely affect more foreign students who join Japanese companies in October after graduation,” Fourth Valley’s Shibasaki added.

Akie Nakamura, a senior researcher at Recruit Works Institute, speculates that the entry restriction has affected manufacturing companies and research institutes, slowing down their progress, for instance, in product development.

While a portion of professional, managerial and administrative work can be done remotely, the travel restrictions have left researchers who work in laboratories and new employees expected to acquire skills during workplace training sessions in limbo, Nakamura said.

“I think all companies (hiring foreign workers) will struggle with this very problem this year,” she said, pointing to trading companies, IT firms and businesses in the services industry as those possibly hit the hardest.

In 2012, Japan gave skilled workers a new visa offering a few perks such as a fast track to permanent residency, allowing them to stay indefinitely in Japan. The government intended to bring in about 10,000 skilled workers to Japan by 2020 and double the number by 2022 under the program. It’s been a success so far, with the program attracting 14,924 people as of the end of 2019, with the number continuing to grow, according to the Immigration Services Agency data.

“(But) travel restrictions between China (and Japan) certainly pose a unique challenge for Japan in recruitment from that region,” said Nakamura.

As of June 2019, 8,500, or 65.2 percent, of the highly skilled professional visa holders hailed from China, according to the Justice Ministry.

“Many Japanese companies are taking advantage of its close distance between China and the growth potential of its markets … and are dependent on the Chinese workforce in all categories of highly skilled professionals, blue-collar workers and students,” she stressed. “But provided that China is where the virus is believed to have originated, it may not be among the countries first to see relaxed entry restrictions.”

Will the entry ban, which has come under fire especially from the international community, make Japan lose its appeal for skilled foreign workers once the pandemic is over?

Probably not. For one, Japan is not the only country closing its doors to foreign nationals. But once the pandemic has subsided, Fourth Valley’s Shibasaki wants Japan to show that foreign workers are welcome.

“The pandemic will certainly spur a reluctance toward immigrants and foreign laborers around the world as governments try to protect and secure jobs for local manpower amid the economic fallout,” Shibasaki said. “If the world becomes more exclusive, it’s an opportunity for Japan to show that it’s trying to become more inclusive.

“Japan is seeing a major population decrease and is faced with the most extreme labor shortage in the world, which won’t likely rebound after the pandemic.”

And the fact that Japan has only seen a low number of infections and deaths so far compared to other countries makes it one of the safest regions among those affected by the pandemic, working to the advantage of Japan’s businesses.

Work-style changes, or increased use of remote work, may also help foreign professionals who want to work for Japanese companies outside the country.

“Now that we’ve temporarily shifted to working remotely, if this system proves a success … it should become easier to hire foreign talent,” Mercari’s Kuboki said.

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