Japan has not faced up to the need for re-training in an ageing society

Japan’s population has already peaked at 127 million, and on current projections will be under 100 million by 2053, with around 1 in 4 people aged over 75 and under 60 million by 2100, by which stage 1 person in 2.5 will be elderly.  The Nikkei Business magazine has a special feature on what this means for Japan and how to make sure this future is a happy one.  Japan is of course the canary in the coal mine for other developed societies facing similar demographic changes, such as Western Europe, but, so far, does not seem to be taking the route that Western Europe has, of allowing immigration to rebalance the demographic trends.

Happy vs Bad scenarios

The “happy scenario” is where the elderly find jobs as “cloud workers” doing subcontracted administrative work for their local authority, live in affordable social housing and their pensions can allow them a comfortable lifestyle.  They might accumulate points from their work which go towards healthcare and social care.

The “bad scenario” is where salaries are only just enough to make ends meet and if you are living on your own, aged 80, you find it hard to do physical work.  Social infrastructure has not been renewed, and living conditions are worsening.  People are fleeing the suburbs in search of a cheaper cost of living. Intergenerational wage gaps have not been adjusted, and this is having an impact on pensions.  Low wages have led to a chronic labour shortage.

The new multistage life and career

The Nikkei then goes on to interview Linda Gratton, of the London Business School, regarding her concept that our lives will no longer be three distinct stages of education, work and retirement, rather multistage, with a time of retraining, which may result in no longer working for an organisation as an employee.

A rather depressing graph accompanies this, showing that Japan has the lowest number of people over 25 in further education (2.5%) compared to the OECD average of 16.6% – only the Netherlands has a similarly low rate, and Germany, the UK and Spain are also below average.

Japanese corporate training budgets are a tenth of Germany’s

Japan’s generally high level of education might explain this, but another chart also causes concern, comparing Germany to Japan in terms of corporate training.  Siemens spends over $1100 per employee per year, compared to $130 average spending on training by Japanese companies on their employees.  Training in Germany is for the whole industry (presumably they mean Germany’s national apprenticeship schemes) whereas for Japanese companies, training is only offered to employees.  The content of the training in Germany is transferable skills, and in Japan it is only useful for that company or industry.  German training includes e-learning via smartphones and PCs, whereas in Japan it is “on the job training” and classroom based training.

Actually I have noticed more e-learning in Japan too, although it is mostly for internal compliance purposes.  Despite the fact that I have recently created some e-learning, I am not sure it is a sufficient alternative to class room based training, particularly for soft skills.  But certainly if we are thinking of retraining people in skills needed for becoming “cloud workers” then it will have an important role to play.  Indeed the e-learning I have developed in Japanese is specifically aimed at Japanese people working in virtual global teams.

Japanese firms’ re-training, re-employment provision

The final part of the feature details a survey of various listed Japanese companies’ employees about their systems for allowing second jobs, early retirement, individual education and re-employment.  62% of Japanese companies allow employees to have second jobs, usually with some restrictions.  68% have an early retirement scheme, for 44% of those, it kicks in at age 50, 29% from age 45 and 12% from age 40 and also age 55.  52% do not have any support system in place for re-training or overseas study, although some do allow time off for study at an employee’s own cost.  80% of firms have a re-employment scheme for people who have left the company, but with various conditions, such as they should have left the company in order to bring up a family, or to look after elderly relatives, or to accompany a spouse when they had to move for work.

Nikkei’s Business’s message to Japanese companies is clear – for a happy future society, they need to step up their support for older employees to develop their second careers.

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