Most Japanese companies look to raise retirement age-Reuters poll
20/07/2017 24:00
* 60 percent of companies looking to raise retirement age
* Three-quarters see move as way to ease labour crunch
* Others hope to leverage older workers' expertise
* More than half of firms cautious on timing of moves
By Thomas Wilson and Kaori Kaneko
TOKYO, July 20 (Reuters) - More than half of Japanese
companies are planning to raise the retirement age of their
workforce, a Reuters poll shows, with many saying it would
alleviate the country's labour shortage and harness the
expertise of veteran workers.
Most Japanese companies require full-time employees to
retire at 60, with an option of a further five years' work on
reduced pay and terms. The system is a keystone of Japan's
traditional jobs-for-life employment structure where workers are
virtually guaranteed employment from graduation to retirement.
However, a shrinking and ageing population is forcing Japan
to change. The government intends to raise the pensionable
retirement age to 65 by 2025 to leave more people in the
workforce and reduce pressure on a shrivelling tax base and
rising social welfare bill.
Companies including Suntory Holdings and retailer Aeon Co
Ltd 8267.T have already raised their retirement age to 65 for
employees who want to continue working. Others plan to follow
suit soon to cope with the highest jobs-to-applicants ratio in
more than 40 years.
"We decided to raise the retirement age to strengthen our
competitive edge and add value through utilising senior
workers," said Keisuke Takemasu, a human resources manager at
Suntory. "There's no doubt Japanese companies need to think
about employment beyond 65, and I think attention is shifting to
that."
In the survey, some 60 percent of companies have raised or
intend to raise the retirement age for employees, with 46
percent looking to lift the cap to 65 years of age and 6 percent
considering an increase to between 66 years and 70 years.
Overall, most companies - 62 percent - see raising the
retirement age as a positive. Many said it would ease labour
shortages and help pass on older workers' skills and know how.
"It's tough to find younger workers, so we cannot avoid
raising the retirement age," a food company manager wrote in
another response.
The survey showed that 47 percent of companies were already
implementing the change, while more than 20 percent said they
planned to roll it out over the next three years and nearly a
third planned to do it over four or more years.
The survey, conducted monthly for Reuters by Nikkei
Research, polled 549 big and mid-sized firms that replied
anonymously. Between 246-262 companies answered the retirement
age questions.
Japan's population is projected to shrink to 88 million from
the current 127 million in the next four decades, with the
proportion of those over 65 swelling to almost 40 percent from
28 percent, according to the National Institute of Population
and Social Security Research.
HIGHER PAY
For elderly workers, maintaining regular employment status
ensures continued benefits and higher pay than if they became a
contract worker.
Such higher personnel costs were flagged by 34 percent of
companies as a negative and impact on staff development was a
greater concern; 55 percent said it could hinder the
professional development of young workers, while 52 percent said
it may reduce opportunities for younger employees.
"We would be unable to balance (raising the retirement age)
with the recruitment of fresh graduates," wrote a manager at a
retailer.
T&D Holdings Inc's 8795.T Taiyo Life Insurance in April
raised its retirement age to 65 from 60 without cutting pay or
terms. It will allow employees to work until 70, on temporary
contracts. Daiwa Securities Group Inc 8601.T has removed curbs
on some salespeople working beyond 70.
Other countries grappling with ageing populations such as
Germany are also raising their pensionable age. Britain
abolished its default retirement age of 65 in 2011.
Yoshihiro Yamashita, a labour ministry official, said
raising the retirement age will help reduce labour shortages
but, mindful of the financial burden on companies, the
government will not look at compelling firms to raise or abolish
retirement ages until after 2020.
"Companies' profitability and financial situations vary, and
as the number of employees increase (after lifting retirement
age), personnel costs will also go up," he said.
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Raising Japan's retirement age http://tmsnrt.rs/2tAwgN8
Japan Inc says shrinking domestic market, worker shortage are
biggest headaches urn:newsml:reuters.com:*:nL3N1JA1L4
Most Japan firms reluctant to boost shareholder returns further
-Reuters poll urn:newsml:reuters.com:*:nL4N1K428O
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(Reporting by Thomas Wilson and Kaori Kaneko; Additional
reporting by Izumi Nakagawa. Editing by Malcolm Foster and Neil
Fullick)
((T.Wilson@thomsonreuters.com; 81-3-6441-1598; Reuters
Messaging: t.wilson.thomsonreuters.com@reuters.net))
Keywords: JAPAN COMPANIES/RETIREMENT AGE