Episode #239: Japan's Big Challenge

The demographic challenge for Japan is looming on the horizon. The decrease in the numbers of young people is permanent. What companies will face is a shift in power from the company side to the employee side. The young entrants into Japanese companies will start to realise they are in super demand. This will end lifetime employment as we currently know it. If you meet someone from a Western country who has spent their entire working life with the same company you are always surprised. This is because we move between companies and this is unremarkable. Japan will become like this in the future.

The issue in Japan will be the two Rs - Recruit and Retain. How to be an attractive employer who young people want to work for will be the test. Today with social media there is a tonne of information about companies which allow the young prospects to check us out. They will particularly be looking for is information on how their supervisors will treat then.

Once they get inside the company, they have different expectations to their parents about what they want from work and what they want from bosses. The bosses however may be behind the times here in Japan and not really understanding what they need to do to retain the young.

Companies in Japan have not fully realised the ramifications of these changes. They need to work this out now or the damage will be substantial.