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Sunday, March 19, 2006

Japan Running out of Workers

There just aren't enough of the right kinds of people to fit the jobs that need them.

When a fairly staid weekly business magazine uses the word "panic" in its headline, readers are prompted to take notice.

Shukan Diamond (March 11) insists businesses are definitely facing one: There simply aren't enough workers to go around.

We're not just talking about executives or programmers or accountants; even McDonald's Japan is hard-pressed to find workers to serve burgers for its usual 900-950 yen hourly wage, and has already offered higher rates in some areas.

"One cause is the economic recovery," explains a manager at the Golden Arches.

"Businesses in the retail and service sectors have all expanded hiring, and we have to compete with them."

The current labor shortfall, Diamond asserts, is unrelated to the large number of post-World War II baby boomers who, due to their reaching age 60, will be retiring from 2007. That's because it's not so much a "labor" shortage as a mismatch between worker skills and employer needs.

"Society's changing faster than companies can anticipate," says a personnel management consultant employed by the publishing organization Recruit. "In highly specialized job fields, the rate of depletion is especially high."

Take the IT sector. While the number of trained programmers remains insufficient to meet demand, what the industry desperately needs, the consultant says, "are junior managers in their early 30s who can oversee personnel, delivery and budget, and who have communication skills -- including foreign language skills -- that enable them to understand what customers want."

Unfortunately, he tells Shukan Diamond, efforts to train more people with such advanced skills are lagging far behind demand.
Students should take a look at this and start training in areas that need them.

Along with a dearth of skilled workers, Japanese corporations are facing serious morale problems of their own making. Japan Inc., warns the headline in Shukan Economist (March 14), may be on the verge of collapse.

Take Toyota Motor Corp. Its year-on increase in worldwide production, 640,000 units in 2005, exceeded the entire annual output by rival automaker Mazda. This spectacular success, however, has left Toyota and its Aichi-based suppliers gasping for breath, and scrambling for competent workers.

The stresses are already starting to show. From 934,225 units recalled by Japan's largest automaker in 2003, the figure leaped to 1,887,471 in 2004. Toyota attributes the rise to "greater component standardization." But other factors may be involved.
Corporate Japan needs to look at their practices as well. This could become a major concern very swiftly.