Tokyo, 12 November – Last week, Japan’s Ministry of Health, Labour and Welfare released its latest survey on the diversity of working arrangements in Japan’s shrinking population. For the first time in the survey’s history, non-perm or temp workers account for exactly 40.0% of the national workforce. Initial media reports highlighted the record, albeit slightly suspicious, ratio and a stunning statistic that many temps preferred the flexible working hours that part-time, temporary, and contract assignments offer. Unlike the survey, reports did not highlight the diversity in the temp workforce, a grouping of part-timers, full-time contract workers, and retiree rehires.
Part-timers, as the term suggests, work differently than other temps. For example, female part-timers, a third of temp respondents, were the main breadwinners less than 25% of the time, which means 75% were out there for the sake of pocket money. So part-timers choose when they lined their pockets while other temps looked for hard money and a job-skills fit even as they knew that the dearth of perm opportunities kept them swimming around the temp pool.
Meanwhile, close to 95% of male retiree rehires were still breadwinners making that smooth cost-heavy transition into full retirement. For younger temps, about 80% of men between ages 24-45 were breadwinners as compared to below 30% of women. So, temp or not, men in Japan still bring home the dough. Note that this age band is home to new and future families and parents.
Temps were also much less satisfied than perms about remuneration, job stability, and career prospects. On the other hand, perms were marginally unhappier with the quality of instruction from their managers and their working hours. Japanese work culture is infamous for long hours, and they don’t seem any more pro-family or pro-baby than the boomer years, so who will be there to power any future growth? With companies already turning to contracts to rehire retirees of proven value, it looks like even longer work hours and active aging for everyone.
Maybe a longer working life could translate into longer-term, sustainable growth, targets of Japan’s new stewardship and corporate codes. Before those two came around, Japan also changed its employment contract laws. They slapped a 5-year limit on dated contracts. Beyond that, a worker had the power to issue an ultimatum to convert to a rolling deal. This power came at a price – the law only applies to dates after promulgation. No backdating, slates wiped clean, employment contracts renewed from zero.
The law was devised to bring stability to contracted work, but if Japan’s economy were to grow again, as its government envisions, then the power to switch to a rolling contract on, most probably, a frozen wage will only slowly squeeze a temp’s already thin pockets. Some lawyers have commented on this no-win situation for temps. Companies are now free to estimate long-term temp costs using 5-year ceilings. No need to mention “black” companies, a growing social problem of employee exploitation, temp or otherwise.
Who can make things better? Activist investors are more of the latter, so since cheap, skilled labour is a win-win, don’t expect an agent of change there. What about employers? Do they have the principles or pockets to take valued temps on their permanent payroll? Or would they force them out? Maybe even deprive them of CV-pretty work ahead of the 35-year-old glass ceiling for jumping ship or before the temp-to-perm window arrives? The ball has been placed firmly in the hands of employers. Some temp agencies have switched to directly hiring registered persons as full-time ready to go employees, so there is new hope.
The flip side of this employment conundrum is the 60% perm workforce, where the temp-perm disparity could breed elements that are even less motivated toward productivity. Stability in the perm world can easily be twisted into protecting the system, scraping through with the bare minimum, and producing the goods only when a chance to climb up the corporate ladder comes round.
Toxic for productivity? No rocket growth, just inching up or down every year? Maybe that’s sustainable for a while. Now the case is for the entire workforce to be included in the numbers game, or a respected bastion of moral authority, like Justice Bao or Mito Komon, to ruffle some feathers and clean up the show, because it’s high time companies show some real commitment toward embracing diversity.