Japan's tradition of lifelong employment with one company is changing as competition in the labor market heats up and encourages workers to leave for better pay and benefits, according to The Wall Street Journal. Under the current system, which has been in place for decades, new recruits are often hired right out of college and offered all but a guarantee that they will be able to work there until they retire unless there is a serious economic downturn. Global Japanese brands such as Sony, Honda, and Panasonic currently have such employees sitting in their corner offices.
Problems arise when employees are expected to have a job for life and during the 1990's Japan saw the beginning of lower productivity and less innovation that has caused a stagnating and even contracting economy. Many 'lifetime' employees experienced layoffs as companies, especially those in technical fields, failed to innovate and were forced to cut costs to stay in business.
In recent years, however, aggressive policies have helped the economy expand for two years in a row and companies as well as employees are warming to the idea of more competition and choices. Unemployment is currently sitting at 2.5 percent and the amount of jobs per 100 applicants is at a 44-year high. As a result, salaries are rising and both foreign and domestic businesses are willing and able to pay more to secure the best talent. Despite the recent trend, only five percent of the Japanese labor market switches jobs on an annual basis and the average tenure is about 12 years. This is still quite far off from the U.K.'s 8.6 years and 4.2 years in the United States.
