Hiring challenges persist in Japan as 87% of employers reported losing candidates in the past six months due to uncompetitive salaries and benefits, according to research from Morgan McKinley.
In 2024, 97% of organizations found recruitment to be ‘Very’ or ‘Quite’ competitive, with key barriers expected to continue into 2025. Employee satisfaction with benefits remains low, with 57% of professionals feeling neutral or dissatisfied with their current packages.
While flexibility remains a key priority for professionals, many Japanese companies stated that they are shifting toward more in-office work.
Currently, 24% of organisations allow 1-2 remote workdays per week, 31% require employees to be in the office 3-4 days a week, and 31% mandate full-time office attendance. Only 14% offer fully remote options. Notably, 26% of organisations have increased in-office requirements compared to the previous year.
Meanwhile, compensation remains a major factor in attracting and retaining talent. In the latter half of 2024, 67% of Japanese organisations kept salary ranges static, making it harder to attract new hires. Looking ahead, 63% of employers plan to increase salary offers for hard-to-fill roles, indicating a necessary shift in compensation strategies. However, professionals remain cautiously optimistic, with only 48% expecting a pay increase in 2025.
“The Japan job market is facing intense competition for talent,” Lionel Kaidatzis, managing director, Morgan McKinley Japan, said in a press release. “Our research shows a significant portion of the workforce is actively seeking new opportunities, and employers are struggling to attract and retain the right candidates.”
“Those that fail to offer competitive salary and benefits, along with the desired workplace flexibility, risk losing top talent,” Kaidatzis added. “Companies that strategically adjust their compensation structures and workplace policies—focusing on transparency, flexibility, and career growth—will be best positioned to thrive in this dynamic market.”