Japan's Daiwa aims to raise wages at least 5% next year to attract talent

Daiwa Securities

23/12/2024 15:00

By Anton Bridge and Miho Uranaka
       TOKYO, Dec 23 (Reuters) - Japan's Daiwa Securities
 8601.T  is aiming to raise wages by at least 5%, its chief
executive officer said, a faster rate than many Japanese firms
expect as the country's shrinking labour pool intensifies
competition for talent.
    Daiwa is discussing a pay raise of at least 5% for the
financial year beginning in April 2025, CEO Akihiko Ogino told
Reuters, after hikes of 5%, 4% and 7% in the three years prior.
    "In order to secure quality talent, we have to raise wages
above inflation," Ogino said. "Every company has a shortage of
workers."
    Daiwa is also considering increasing the starting monthly
base wage - not including bonuses - for career-track employees
to 300,000 yen ($1,920) from 290,000 yen, subject to
negotiations between employees and management.
    In April this year, large Japanese firms agreed to raise pay
by 5.20% on average, the biggest rise in 33 years, at the
"shunto" spring wage negotiations.
    But the expected pay raise at Daiwa for April 2025, Japan's
second-largest brokerage and investment bank, would likely
exceed that of most other firms - only 9% of firms surveyed by
Reuters in October said an increase between 5% and 7% was
possible in the next financial year.
    Daiwa has also increased its intake of mid-career hires in
the past two years. Ogino expects total experienced hires to hit
250 for the year ending in March 2025, up from 161 in the
previous financial year and 147 the year before that.
    Policymakers have said that decades of slow wage growth in
Japan has impeded growth in domestic demand and of the overall
economy. Bank of Japan Governor Kazuo Ueda has made sustainable
wage increases a core criterion for future interest rate hikes.
 ($1 = 156.3500 yen)

 (Reporting by Anton Bridge; Editing by Nicholas Yong)
 ((Anton.Bridge@thomsonreuters.com;))