Is Japan shifting away from lifetime employment?

Japan is experiencing a shift away from the traditional model of lifetime employment, as 37.6% of job openings are set to be filled by mid-career hires in 2023. By 2024, 94,430 mid-career candidates are expected to be hired, according to a study by Nikki, which calls this the “largest shift” away from Japan’s long-standing employment model.

The ratio of mid-career hiring in Japan remained below the 20% mark until 2017, before surpassing 30% in 2022. The non-manufacturing sector leads the mid-career hires at 39.9%, while the manufacturing sector has 31.7%.

The pandemic has accelerated the disruption of traditional Japanese recruitment practices, as sectors that downsized operations are now hiring aggressively to secure talent. For instance, the hotel and travel industry plans to quadruple mid-career hires, while the rail and bus industry is planning a 94.7% increase. Specialty shops are also boosting mid-career hires by 49.8%, and some organisations are expanding mid-career hiring to keep up with the demand for digitisation.

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Despite the increase in mid-career hiring, some organisations face challenges in expanding their recruitment efforts due to a decline in the number of job seekers. 56.8% of respondents cited the limited number of applicants, while 55.8% noted that many candidates declined preliminary job offers. Furthermore, a survey conducted by Japan’s labour ministry found that over 40% of recent college graduates leave their jobs within three years.

Japan’s working-age population, ages 15-64, peaked in 1995 and has since dwindled. By the end of the decade, only 68.75 million people, or 80% of the peak, will be in that age group, reported Nikkei Asia.