Organisations using improved remuneration to retain best talent
Organisations in Japan were compelled to raise wages in 2022 in an effort to retain employees amid a tight labour market.
A survey by the Japan Institute for Labour Policy and Training revealed that approximately 93% of organisations in Japan implemented wage hikes. About 68% of the respondents increased employee wages to enhance motivation and improve benefits, reflecting a commitment to retaining a motivated workforce. Additionally, around 42% of the surveyed organisations cited employee shortages as a driving factor behind their decision to raise salaries.
The findings shed light on the economic and labour landscape in Japan, as Prime Minister Fumio Kishida’s administration prepares a new economic stimulus package aimed at mitigating the impact of rising prices and insufficient wage growth.
For the remaining organisations that chose not to raise wages, roughly 70% attributed their decision to sluggish business conditions. Many of these organisations have been grappling with economic challenges resulting from the pandemic that began in 2020, reported Kyodo News.
In a related development, Japan’s largest labour union, the Japanese Trade Union Confederation (Rengo), recently announced its intention to demand a minimum of 5% pay increase during the upcoming annual wage negotiations scheduled for the spring of 2024. This decision mirrors the union’s determination to address the ongoing problem of persistent inflation, which has eroded employees’ purchasing power.
READ MORE: Japan’s labour union pushes for pay hike in 2024
In addition to the overall pay hike, Rengo is also advocating for a minimum hourly wage of 1,200 yen (US$8.01) or higher, representing a 50 yen (US$0.33) increase from the 2023 negotiations. The culmination of these wage negotiations is anticipated in March 2024, when major organisations will determine their responses to the labour unions’ demands.
