Analysis: Japanese companies struggle to hire, retain staff as labour shortage worsens
03/10/2017 24:43
* BOJ survey shows companies concerned about labour shortage
* Some companies seeking to get housewives to join workforce
* Improved working conditions offered in some cases
* Companies also cutting back on services they offer
* A few companies prompted to raise prices as their costs
rise
By Sam Nussey
TOKYO, Oct 3 (Reuters) - Companies in Japan's service
industries are struggling to hire and retain staff as the labour
market becomes the tightest in decades, and are increasingly
taking unorthodox steps to alleviate the shortage.
That can include looking to housewives and the retired to
come into or rejoin the labour force. In some cases it means
offering better working conditions for some staff, even if this
requires raising prices. In others, companies are reducing the
services they offer, perhaps by cutting opening hours, or
delaying expansion plans.
Japan's jobless rate stood at a 23-year low of 2.8 percent
in August, reflecting a strengthening economy and shrinking
working-age population in a rapidly aging society.
And on Monday, the Bank of Japan's "tankan" quarterly survey
showed that the ratio of companies complaining of labour
shortages, rather than excess staff, was at its highest level
since 1992.
The labour squeeze can reduce the speed of economic
development, and even curb some economic activity altogether,
hurting Japan's chances of a period of sustainable growth.
For example, at Sun Mall in Chiba, east of Tokyo, labour
shortages have led some tenants to abandon plans to take up
space at the site, and others to shut up shop when key workers
could not be replaced, according to Seth Sulkin, president and
CEO of the mall's owner Pacifica Capital K.K. He also said a new
spa due to open there in a few months has been forced to push
back the opening date due to staff shortages.
"The pool of people seeking part-time jobs is shrinking
rapidly, particularly outside of central Tokyo," Sulkin said.
"We've recommended that the tenants convert some of the
positions to full time and raise wages but they tell us they
can't do that and still make money," he said.
"In Tokyo it's easier to hire people but it's not as easy as
it used to be," he said. By contrast, "in our Chiba mall I think
the location is the big issue, there's just not enough people."
FROM HOUSEWIVES TO RETIREES
With the economy at near full-employment, companies are
being forced to try to find new sources of labour.
Fast food chain McDonald's Holdings Co Japan Ltd 2702.T ,
following in the footsteps of convenience store operator
FamilyMart UNY Holdings 8028.T , says it will try to expand its
core workforce beyond young people by targeting housewives for
part-time positions. urn:newsml:reuters.com:*:nL3N1K92V5
More than half of housewives with children would like to
work but are not able to find a suitable job, a survey of more
than 4,000 married mothers by the Jobs Research Centre found.
They were particularly concerned about long working days that
don't fit with their responsibilities at home.
Signs of companies moving to improve working conditions to
retain and attract staff include Doutor Nichires Holdings Co Ltd
3087.T , which has introduced severance pay for some temporary
employees at its Doutor Coffee chain. That is an unusual move in
a country where there is a large gap in pay and working
conditions between temporary and permanent employees.
Some restaurant operators, including Royal Holdings Co Ltd
8179.T and McDonald's Japan, have begun moving away from
24-hour operations, but that is far from the preferred option
for companies in an industry that prides itself on offering
convenience and service at all hours of the day.
More than 80% of companies surveyed in a Reuters poll in
June reported that they expected labour shortages would force
them to restrict the number of services they can offer over the
next several years.
Some efforts to expand the labour force are finding
corporate thinking has only changed so much.
This March, human resources firm Fullcast Holdings Co Ltd
4848.T set up a recruitment agency aimed at Japan's over 60s
and, while almost 2,000 retirees have registered, many companies
are not able to accommodate them, says Fullcast Senior Works
President Yasuhiro Sumi.
"If there were jobs that met their needs in terms of things
like distance from home, job type and working hours there are
lots of employable people," he said.
Many companies remain hesitant to spend their record cash
piles on raising wages, in part because they are unable to pass
on costs to their customers who are accustomed to nearly two
decades of mostly falling prices.
"It seems that deepening labour shortages are not resulting
in higher prices that reflect rises in wage and labour costs,"
says Hideo Kumano, chief economist at Dai-ichi Life Research
Institute.
PRICE HIKES RAISE EYEBROWS
Still, there are some signs of price rises, with even
companies famous for their low prices not immune.
One of those firms, yakitori chicken restaurant chain
Torikizoku Co Ltd 3193.T this month raised its prices 6.4
percent, the first time in 28 years.
And Japan's largest parcel deliver company, Yamato Holdings
Co 9064.T , this month increased home delivery prices by around
15 percent, the first such rise in almost three decades. Other
delivery firms have quickly followed suit.
Yamato become a poster child for Japan's labour crunch after
it booked billions of yen in charges to provide backpay to
delivery drivers who had been overworked and underpaid.
"We have confronted the deterioration in working conditions
for our front line staff," Yamato Holdings President Masaki
Yamauchi told reporters last week.
The company has promised to hire 10,000 new delivery staff
by the end of financial 2019 to ease the strain on the 55,000
full-time drivers, who will have their overtime reduced.
The new staff will be mainly hired from among those who
already work for the company as outside contractors, the company
says.
On Sunday, billionaire founder of fashion retailer Start
Today Co Ltd 3092.T Yusaku Maezawa tweeted that shoppers on
his Zozotown fashion site will be able to choose how much to pay
for delivery.
"If this led to a sharing of feelings between the carrier
and the recipient I think it would be lovely," Maezawa tweeted.
($1 = 112.6000 yen)
(Reporting by Sam Nussey, additional reporting by Tetsushi
Kajimoto, Leika Kihara, Izumi Nakagawa, Aaron Sheldrick, Ritsuko
Shimizu, Taiga Uranaka; Editing by Martin Howell)
((sam.nussey@thomsonreuters.com; +81364411596; Reuters
Messaging: sam.nussey.thomsonreuters.com@reuters.net))
Keywords: JAPAN ECONOMY/LABOUR