Japanese companies decided to boost their employees pay in order to retain employees in a tight labour market.
According to a poll conducted by the Japan Institute for Labour Policy and Training, nearly 93% of Japanese organisations adopted salary increases. Approximately 68% of respondents boosted employee pay to improve motivation and perks, demonstrating a commitment to keeping a motivated staff. Furthermore, almost 42% of the surveyed firms identified staff shortages as a motivating factor in their decision to boost pay.
The findings shed light on Japan’s economic and labour situation as Prime Minister Fumio Kishida’s administration plans a fresh economic stimulus package to offset the impact of increasing prices and insufficient wage growth.
Approximately 70% of the remaining firms who elected not to boost pay ascribed their choice to poor business circumstances. Based on Kyodo News, many of these businesses have been struggling with financial challenges as a result of the 2020 pandemic.
Additionally, Japan’s largest trade union, the Japanese Trade Union Confederation (Rengo) has indicated their intention to demand a 5% pay increase during the upcoming annual wage negotiations in the spring of 2024. This decision indicates the union’s determination to address the persistent problem with ongoing inflation that has weakened employees’ ability to purchase goods.
Rengo is also lobbying for a minimum hourly salary of 1,200 yen (US$8.01) or higher, reflecting a 50 yen (US$0.33) rise over the 2023 negotiations. The pay discussions are expected to conclude in March 2024, when large corporations will decide how to respond to labour union requests.
