Most Japanese employees will be receiving their first pay slip for the new financial year, which starts April 1st for most Japanese companies. They may be somewhat disappointed, as it seems that despite Prime Minister Abe’s exhortations that companies should start increasing salary levels, standard monthly pay at major firms is set to rise by just 1.8% on average this year, according to a Nikkei survey. This would continue a trend of below-2% wage growth since 2000.
The big automakers are planning major bonus hikes however, even though base rates remain little changed, as the unions did not seek a rise. Only four industries, including pharmaceuticals, saw wage rises above 2%.
The misery piles up for many senior executives in electronics companies, including Sony, who have just announced that, following on from cuts in base pay last year, 40 of their executives will forgo their bonuses, after failing to keep promises on returning the company to profitability.
What happens to pay and bonuses in Japan tends not to impact their overseas subsidiaries directly, as the pay and bonus systems vary so considerably, but it’s probably best to be sensitive to the gloom that will descend on Japanese expatriates as they receive a pay slip further diminished by the cheapening yen, a situation unlikely to change when they receive their bonuses in the summer.
For more content like this, subscribe to the free Rudlin Consulting Newsletter.