From India to the U.S., the pandemic has spurred millions of people to leave their jobs in search of more fulfilling, flexible roles, in what has been dubbed the Great Resignation.
But so far at least, Japan’s workforce is charting a very different course, with fewer people than ever moving jobs. This week, senior staff writer Alex Martin joins to discuss the changing face of work in Japan, and why so few people seem inclined to switch roles.
- Is Japan on the brink of its own ‘Great Resignation’? (Alex Martin)
- Japan to review top obstacle to telework — the personal seal
- Even after pandemic, Japan’s labor market faces shortages and mismatches (Kazuaki Nagata)
- Tokyo loses population for first time in 26 years amid pandemic
- Yahoo tells Japan employees they can work anywhere and commute by plane when necessary
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Oscar Boyd 00:10
Hello, and welcome to Deep Dive. From The Japan Times, I’m Oscar Boyd.
From India to the U.S., the pandemic has spurred millions of people to leave their jobs in search of more fulfilling, flexible roles, in what has been dubbed the ‘Great Resignation.’
But so far, at least, Japan’s workforce is charting a very different course, with fewer people than ever moving jobs. This week, senior staff writer Alex Martin and I discuss the changing face of work in Japan, and why so few people seem inclined to switch roles.
Oscar Boyd 00:54
Alex Martin, welcome back to Deep Dive. Thank you so much for joining me today.
Alex Martin 00:57
Thanks, Oscar for having me back. Great to see you again.
Oscar Boyd 01:00
In many countries, as the pandemic took hold, we started to see reports of people switching jobs en masse. And this has been called the ‘Great Resignation’ or the ‘Big Quit’ by a lot of Western media. What’s been happening in the labor market overseas?
Alex Martin 01:14
Well, according to reports, for example in the United States, back in November last year 3% of the workforce — that’s 4.5 million people — quit their jobs, which is perhaps a record high. It seems to be a phenomenon that’s not just limited to the United States, but also happening in Europe, Australia and also in India, in the tech sector, where I think we’re seeing a lot of people reconsidering their job priorities and moving around.
Oscar Boyd 01:37
And what are some of the main reasons that people are leaving their jobs or changing their career paths?
Alex Martin 01:41
What we’re seeing is people who are either burned out, or finding different opportunities with better pay and better conditions. People in the healthcare sector — nurses, doctors — people who are on the frontlines of COVID, I think many of them are really tired, they’re burned out. You can imagine the pressure they’ve been going through. So I think there’s a high turnover rate in that sector, and also the service sector. It’s the same in Japan. When lockdowns kick in, restaurants and bars need to close or shorten their hours, which means that they’re not hiring as many people as before. Some people, I think, are considering changing their occupation or type of work, because a similar situation could happen again.
Oscar Boyd 02:22
So because of the instability of their jobs, or because they lost their jobs due to the pandemic, they’re now considering not going back to those jobs and trying to find more permanent or different careers?
Alex Martin 02:32
Yeah, and then there’s also the proliferation of remote work, which is huge. That’s the backbone behind this big movement. Obviously, I don’t think we’ve seen people working from their homes or outside of the offices on this scale, ever. And that’s really affecting a lot of things, not just the job market, but also how people consider their work life balance and family obligations. That’s another big factor.
Oscar Boyd 02:57
Let’s move to Japan then. Japan has never had the kind of hard lockdown that we’ve seen in, for example, some areas of the United States. But it has had its state of emergencies, it has had requests for people to stay at home and to work from home where possible. So at the beginning of the pandemic, when the first state of emergencies were introduced, how did working habits begin to change?
Alex Martin 03:18
Well, as with many other work-related customs in Japan, things are a little bit slow here compared to perhaps the U.S. or other countries that have digitized quickly. In terms of remote work, the government was really pushing for it, for obvious reasons. However, it took a little while before corporations started to actually implement this type of work system. The big ones started off first, a lot of tech companies. The smaller firms — small and mid sized firms and manufacturers — they were a bit slower to catch up on this, because of a lack of software or hardware. And then a lot of the cases I’ve heard are that the old bosses just don’t like people working from home because they can’t actually watch over them. They get anxious that you know, are they actually working? or are they taking a nap or doing something else? That ingrained culture where a company and its employees are considered family. And this goes back to the lifetime employment system and things like that. And once people start working from home, it’s very hard to grasp what they’re doing and what they’re thinking. So some companies or corporate CEOs were not really happy about that. It took a while for a lot of companies to actually start implementing this system.
Oscar Boyd 04:30
I remember in the early days of the pandemic, there were stories about people being forced to come into the office basically just because they needed to use the traditional hanko seal to sign off on documents and nothing could be done electronically. So it was really hampering the efforts to digitize things or get people working remotely properly.
Alex Martin 04:48
Yeah, I remember doing a story last year about how remote work wasn’t really working in Japan and one of the people I interviewed was a lady, I think in her 30s or 40s, who works for an internet web magazine. You would assume that a company like that would be very advanced in terms of remote work and teleworking. But it’s the same thing that you mentioned, she was asked to come in at least a few days a week. And she recalled one meeting where they have a client and the client is on Zoom, or some kind of video chat. They’re talking on the other side and then the rest of the people in her team are crowded into this room, staring into the video screen. Obviously, there’s no social distancing among themselves. And they might as well go home and join the chat from their own homes, but they came into the office anyway and crowded together. But things like that, I think still persist to some level.
Oscar Boyd 05:46
So that was the early days of the pandemic. And since then, it seems like a lot more companies have got on board with the idea of remote working, where it’s possible at least. But when it comes to this idea of a ‘Great Resignation,’ are we seeing similar trends in Japan to those overseas?
Alex Martin 06:02
In terms of hard statistics, the answer is no. In fact, I think the rate of people hopping jobs or changing jobs has even decreased during the pandemic. However, there have been some statistics taken from government surveys indicating that the number of people who haven’t yet but want to change jobs, is actually climbing at a fast pace. So for 2019, pre-pandemic levels, compared to last year — the survey shows there used to be 8 million people who were considering changing jobs. Now it’s about 8.5 million. So that’s half a million extra people over the past two years who are considering changing jobs. But they haven’t yet.
Oscar Boyd 06:37
Okay, so even though people are considering changing jobs, the labor market as it stands at the moment is still very static. I read in your recent article about this topic that only 4.3% of the working population changed their jobs in 2021, which was actually down 0.5%, from 2020. So we’re seeing the complete opposite of a ‘Great Resignation’ here. What are some of the reasons for that?
Alex Martin 06:59
Well for example, in the U.S., what happened was the economy came back that pushed the whole movement. Whereas in Japan, we haven’t really seen that kind of strong revival yet in terms of the economy. That’s perhaps one reason. And then there are several other reasons as to why the job market is not as fluid here as it is in other countries. One reason is the deflationary economy. Ever since the asset price bubble burst in the early 1990s, Japan has been dealing with this deflationary mindset among consumers and also among corporations. It’s very hard to raise prices here, customers are very frugal when it comes to shopping and buying things, which means that corporations take on the damage internally to offer cheaper products. At the same time, we have the remains of the lifetime employment mentality. The concept itself, it’s not really functioning any more in the sense that people are (no longer) guaranteed a stable position for the duration of their career. However, I think that mindset still persists and you can still see remnants of people wanting that kind of stability. And then there’s also the growing number of temp workers or part time workers, they now account for about 40% of the entire workforce. And this is a direct result of Japan’s stagnant economy. Companies could no longer afford to keep these really expensive, full time employees. So they started outsourcing jobs. So the cheaper part timers, the wages they’re getting, it’s pulling down the entire wage growth of Japan. And that’s one reason why we haven’t been seeing much wage growth at all over the past decade or two. And that means you can skip jobs, but you probably can’t expect to get much of a raise, right? So, for example, in the Indian tech sector, I hear that people in demand can make twice as much if they change jobs, or three times as much. You can’t really expect that in Japan, you can change jobs and perhaps look for a better wage, but it’s not going to be as drastically different compared to some other countries.
Oscar Boyd 08:59
So all these factors taken together — the lingering habits of the lifetime employment system, a deflationary mindset that means companies are unwilling or unable to raise salaries, and a general lack of wage growth across the economy — these are contributing to both a sense of risk aversion and a lack of incentive for people to try and shift jobs?
Alex Martin 09:18
I think so. As I mentioned, it is changing, especially in the tech sector. If you’re working for a startup, or if you’re a part of the startup community, changing jobs isn’t as much of a thing as it was before, people do it frequently. But I think the general feeling is that, let’s say I’m a 30 something Japanese corporate employee and I’ve hopped jobs eight times over the past 15 years. Let’s say I tell that to someone my mother’s age perhaps, someone in their 70s, they would be like, “Eight times? What are you doing? There must be something wrong with you.” So I think there’s a generational gap in terms of how people perceive changing jobs. Also, there’s the seniority based wage system. I think that’s another really big reason that’s making it difficult for people to change jobs that easily. Wages are based on when you join the company and how long you spend time in the company. This goes back to the concept of lifetime employment and dedication, which was fine when it was working. But the thing is when the job market becomes a little bit more fluid, and people start coming and going, that kind of system is not very flexible in terms of accepting other talent. And I think that’s an ingrained corporate system that’s been hampering this kind of labor market fluidity.
Oscar Boyd 10:30
Turning to the service sector for a moment, I feel like when I’ve walked around Tokyo recently, I’ve seen a lot more restaurants with “staff wanted’ signs in the window. It certainly feels like more have them now than they did pre-pandemic. And I know that there’s been reporting on how the restaurant industry and places like convenience stores are facing labor shortages at the moment. Is that not having an effect on wages as restaurants are forced to compete for a limited pool of staff?
Alex Martin 10:54
Yeah, in terms of the hourly minimum wage, it is growing. The government has been pushing for it. And also I think we’re seeing signs of inflation for the past few months, and especially with the situation in Ukraine and Russia, and energy prices rising, that could also mean more inflation in the coming weeks and months. So when that happens, I think people are forced to start giving more money because it just doesn’t match the amount you’re earning and the amount you’re purchasing as a customer. So we’ll see how that plays out. But then there’s also the sticky wage theory, where corporations are really hesitant to raise wages because once they do, they can’t pull them back down.
Oscar Boyd 12:58
So the data shows there’s no real evidence of people in Japan switching jobs en masse, no real evidence of a ‘Great Resignation.’ But what changes have we seen to the ways in which people work over the pandemic?
Alex Martin 13:11
So job hopping isn’t really a thing yet, right? I mean, it could be a thing in the coming years, but at this moment, it’s not. However, what we’re already seeing is, and the government’s been pushing for this too, but there’s a word called fukugyō, a side job. And they’ve really been pushing for people to start getting side jobs, for various reasons. One, because I think the pension system is not as robust. If we reach that age, perhaps we’re not going to be getting as much as our mothers or fathers because of Japan’s demographic outlook. So I think the government is really pushing for workers to start getting side jobs and earning more and start saving more, just to prepare themselves. And remote work really facilitates that, because you can actually work from home and you can talk to clients via video chat. You don’t have to actually go there and talk to them in person anymore, oftentimes. And it gives you more time to actually take on these side jobs. There are several sets of statistics when it comes to how many freelancers there are in Japan. There’s the official stats from the government, and there’s also unofficial private sector stats that indicate that over the past year or so, the number of people freelancing jumped by like 5 million. It’s very hard to tell what the actual numbers indicate, or if they’re correct or not, but it does show that a lot of people are taking on different responsibilities during the pandemic.
Oscar Boyd 14:27
And what do you think the future of remote work will be in Japan? Because it does feel like a lot more companies are on board with the idea now that we’re entering the third year of the pandemic. And I think the most extreme example of this that we’ve seen in Japan is Yahoo, who said in January of this year that it would be allowing all 8,000 of its employees to work from anywhere in the country.
Alex Martin 14:47
Yeah, Yahoo Japan was really quick. I would assume they probably had an internal system where they measured output and location and et cetera, and they figured out that people can actually work from anywhere they want to and we can actually produce the same amount of quality work. And it’s an extremely strong recruitment tool. If you’re an engineer, and you’re looking to find a nice job in Japan from Fukuoka, let’s say, or Sendai or somewhere else, and you see Yahoo Japan saying that you can work wherever in Japan you want to. Like, “yeah!” you know. So it’s a very clever move, because it makes headlines, and it also really raises the appeal of the company. So I think stuff like that, a lot of other corporations are going to start copying pretty soon.
Oscar Boyd 15:25
So you think that remote work will become a permanent feature of Japan’s work culture?
Alex Martin 15:29
At least for the big tech companies, I think so. Once the competition kicks in for talent, I think we’ll see more corporations introducing much more flexible working environments,
Oscar Boyd 15:39
But perhaps not small to midsize or more traditional companies, then?
Alex Martin 15:44
I mean, this is just me from reporting over the past two years or so, I think there’s going to be a big divide. We’re going to see the big tech companies really embracing this. And then the smaller chūshōkigyō (small and medium sized companies), some might and some may not. Some experts are starting to see the end game of COVID. We don’t know yet, but if that is the case, then if people can go back to the office, and if these corporations have resisted teleworking until now, then there’s no reason for them to embrace it.
Oscar Boyd 16:18
Does that mean we’re not seeing much in the way of demand from employees for the ability to work from home?
Alex Martin 16:23
From the workers standpoint, I think a lot of surveys indicate that one of the priorities that most workers have when they’re looking for jobs is to work remotely. So it’s a huge tool that corporations can use to lure these workers. If that is the case, I think even these smaller companies or even big companies who resisted teleworking, I think they might be pressured into offering some kind of options to get talent.
Oscar Boyd 16:50
I think one of the most interesting things that we’ve seen emerge from the pandemic is that Tokyo, for the first time in over a quarter of a century, has actually lost population over the past year. Historically, Tokyo has been this black hole, sucking in people and talent from the countryside. Tokyo’s population has consistently increased while rural cities have fallen into decline. Is this flight from the city a reflection of changing work habits?
Alex Martin 17:14
Well, initially COVID and social distancing and the fact that Tokyo is just extremely crowded, turned some people off, and people who had the option to move moved. I think that was the initial trigger. And then, I think once remote working kicked in, people realized that they don’t really have to be in Tokyo to work. So a lot of people moved to the suburbs, to the nearby prefectures, or even somewhere completely different. I’ve talked to several people who’ve actually done that, even in the story that we’re talking about today. Yamazaki-san, who worked at Olympus Corp, moved from Tokyo to Ina in Nagano Prefecture. Now he subcontracts work from three different companies and makes around the same amount of money he did in Tokyo — and there’s lots of mountains and nature out there. I think a lot of Tokyoites, including myself, we always daydream about getting out of the city and living somewhere else. But until now it’s been really difficult because you need to physically be in the office. I’m a reporter, so I need to go to the scene and I’ll probably have to be in Tokyo anyway. But if that wasn’t the case, and if I had the option to live somewhere else, I would think about it. I mean consider the disaster risks too. Tokyo is one of the most dangerous cities in the world. You can have a big earthquake tomorrow and see half a million people die. You never know what’s going to happen, right? Typhoon season, so many rivers in the city, overflowing, flood risks. Considering that and all the geopolitical things going on at this moment, I would imagine a lot of people are considering getting out of the big city and, you know, moving to the countryside. I’m not saying that’s the best thing to do because living in the countryside has its own perks and difficulties, obviously tied to the population. However, I think in terms of a very simple mind game, I think that’s the kind of thing that many people are thinking.
Oscar Boyd 18:49
And is this trend of Tokyo losing population expected to continue? Has the city hit some kind of limit?
Alex Martin 19:06
I don’t know. The problem with Tokyo is that everything is here. It’s the center of the economy, politics, and a lot of good universities. Top level hospitals, schools, too. So it just has everything. And I don’t think that’s really going to change. My personal take is that we probably won’t be seeing a big exodus from Tokyo in terms of the working population. However, I would think that remote work and teleworking and this flexibility will allow a lot of workers to spend significantly more time outside of Tokyo. So maybe they would have a small apartment here, and then maybe a weekend house somewhere else. And there’s so many deals now where you can rent out places outside of Tokyo for weeks or months, for a decent price. So that hybrid city-life/rural-life, I think that might become a trend.
Oscar Boyd 20:02
And last time we had you on the podcast we were talking about Japan’s epidemic of loneliness. Is there an increased risk of social isolation for some people as a result of working from home, not having those draws to the city or the office or the workplace, to maintain social connections?
Alex Martin 20:20
I think that’s definitely happening. You can see it in various surveys conducted by different think tanks in terms of feeling lonely or loneliness. It is a phenomenon that’s become more prominent over the past two years. At the same time, I think corporations are going to start or are already doing what they call creating office spaces not for work, but for their employees to come and mingle and talk. I think a lot of corporations in the tech sector, perhaps, are trying to implement these new facilities to enhance communication. So they can work at home if they want to but if they want to meet up with people, they can actually come to a nice space with perhaps a cafe or something.
Oscar Boyd 21:00
But not something that we would traditionally consider an office?
Alex Martin 21:03
Oscar Boyd 21:12
One of the things in your article that you wrote about is that you said, “if there’s a silver lining to all this, it could be how the big shift towards working remotely is redefining the relationship between job obligations and family.” What did you mean by that?
Alex Martin 21:25
What’s been happening in the past was, if you’re a professional, and let’s say you’re female and you had a kid, a lot of times, you would take maternity leave. And that would potentially mean that you’re derailed from the corporate ladder. Whereas when it comes to remote working, let’s say you need to take care of your kid, go pick them up at 5 p.m. every day so you can’t work late hours, you could still take on tasks during your free time from home. People who work in human resources, I think they’re thinking that this is a chance to get more people back into the workforce. People who were forced to be sidelined because of family obligations or even taking care of their aging mothers and fathers. So yeah, in terms of changing jobs, or finding jobs, the permeation of remote work would offer more incentives for people with relatives that need to be taken care of, to actually come back to work.
Oscar Boyd 22:19
My final question to you. Japan has notoriously long working hours, and is also recognised as having the lowest productivity of any country in the G7. And pre-pandemic, it wasn’t that infrequent that we saw stories of ‘death by overwork’ make the headlines. In conversations about the ‘Great Resignation’ overseas, you often hear that one of the more positive effects of people resigning en masse is that it puts more power into the hands of employees, because companies have to compete over them. And that allows workers to demand better working conditions from their employers. If Japan doesn’t go through a similar process, do you think that there might be a missed opportunity for the country to reform some of the more negative elements of its work culture?
Alex Martin 23:02
Yeah, I think a lot of corporations are realizing that just having their employees work long hours may not equal productivity. So they’re trying to cut down on that. But the thing is it still persists. And there are a lot of so-called ‘black kigyō,’ black corporations around, where they just overwork their employees to death. And unless the economy really revives and wages go up, and workers’ incentives to find better jobs really gets a boost, I think that kind of sad phenomenon is going to persist. So it really depends on how Japan performs, I think in terms of its economy, and what they’re going to do with the huge population of temporary and part time workers. They need to get more skills to make more money in the labor market. But who’s going to be offering these chances to get these necessary skills? And the government again, has been pushing for this kind of thing but so far, I don’t think we’ve been seeing many changes there.
Oscar Boyd 24:05
Well, Alex, thank you so much for joining me today.
Alex Martin 24:08
Thank you. Thank you.
Oscar Boyd 24:16
That was Alex Martin, and I put a link to his article about whether Japan is on the brink of a Great Resignation in the show notes. You can also find a transcript of this episode on The Japan Times website.
Also in the news this week, the government says it is considering lifting the COVID-19 quasi-state of emergency for 18 prefectures, including Tokyo and Osaka, when those measures expire on March 21, as long as the new infection data meet the criteria for lifting the emergency.
Reflecting falling case counts, on Saturday, Prime Minister Fumio Kishida said that he plans to restart the Go To travel tourism campaign, telling reporters that the government “will make preparations so that the campaign can be resumed promptly, when the appropriate time comes.” More new from Japan on The Japan Times website.
This episode had editing help from Dave Cortez. When I asked Dave what his favorite podcast is to listen to, he told me it’s ‘This American Life.’ I asked him why and he looked at me with this long, piercing stare and simply said,
Alex Martin 25:15
You know, it just has everything and I don’t think that’s really gonna change.
Oscar Boyd 25:19
We’ll be back next week. But until then, as always, podtsukaresama.