Labor shortages are becoming an increasingly serious problem in Japan amid the current economic recovery, particularly for those sectors where lack of enough manpower and rising wage costs result in lost sales and even bankruptcy despite rising demand.

However, companies can and should turn the situation around to create a virtuous cycle where rising wages boost people's consumption and more business investments.

In May, the unemployment rate hit a 16-year low of 3.5 percent and the ratio of job offers to job seekers reached 1.09 — the highest level in nearly 22 years. While the demand for labor continues to pick up, the construction industry and some service sectors, including restaurant chain businesses, face severe manpower shortages.