Japan must pay more salaries or say goodbye

TOKYO - For top Japanese companies, staff retention has never been much of a concern. Most employees joined the company after graduation and invariably stayed until retirement. Yet a recent study by professional recruitment company Hays may have many Japanese employees asking themselves: Does it make sense to stay in Japan?

According to the 2016 Hays Asia Salary Guide, salaries for management level and highly skilled workers in China, Hong Kong and Singapore were higher than Japan; sometimes by as much as two-fold. A chief executive officer in the electronics field could garner an annual salary of four million yuan (US$600,000) in China, but only expect 35 million yen ($300,000) in Japan.

Furthermore, Japan lacks momentum in salary increase. Hays compared the wage projections of five Asian economies. A majority of Japanese companies said they plan to increase wages by no more than 3 per cent, whereas in Hong Kong, Malaysia and Singapore most companies said "3 per cent to 6 per cent." In China, 60 per cent of companies said they would increase salaries by more than 6 per cent, 16 per cent of which said wage hikes would surpass 10 per cent.

The survey covered 3000 companies across Asia, representing some six million employees.

"Higher salaries in Asia could lead to Japanese managers heading abroad," said Marc Burrage, Hays' managing director for Japan. "It will be a further challenge for corporate Japan, which is already suffering from skill shortages."

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