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Will labor practices in Japan be disrupted?

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The war for talent is becoming more intense in Japan as the young population is decreasing and the labor market is increasingly a seller’s market. Recruiting good people becomes critical for companies as manpower plays a significant role in staying competitive in today’s business environment.

The hard assets such as plant and equipment have become less important in today’s fast-changing world, where disruptions are taking place in many industries, and the soft assets such as innovation and new business models are increasing in value to the companies. People capable of developing ideas for innovation and implementing new business models are becoming indispensable as they are the source of soft assets. Recruiting and retaining the talented manpower is a must for employers and for the country.

Companies (in particular, people in charge of human resources) try hard to hunt for and secure “good” workers. The naitei-shiki (formal orientation) ceremonies organized by businesses for new recruits at the beginning of October are one attempt in that effort. The naitei is a tentative job offer in the form of a letter that companies give to prospective graduates whom they have decided to hire. It is still unofficial and preliminary in nature, and thus not a legally binding contract. The students can decide not to join the company after they have received it.

The companies hold such ceremonies to provide an opportunity for prospective recruits to meet their peers who may join the firm in the same year, and to welcome the new recruits and make them aware that they are going to be members of the company “family.”

Despite these efforts to secure new hires, the ratio of those who decline job offers after they receive the offer is high (some 60 percent, according to a survey of students) and rising. Companies that saw an increasing portion of their tentative new hires decline their offers this year accounted for more than 30 percent of the total. Even........

© The Japan Times