Japan pushes for four-day workweek to combat labour shortage

CNBC reveals that in an effort to tackle its pressing labor shortage, Japan is experimenting with a four-day workweek, a significant shift for a country renowned for its intense work ethic.

Japan, known for its intense work culture and even having a term for working oneself to death, is tackling its labor shortage by encouraging the adoption of four-day workweeks.

Although the Japanese government initially supported the idea in 2021, progress has been slow. Currently, only about 8 per cent of companies offer three or more days off per week, while 7 per cent provide the legally required single day off, according to the Ministry of Health, Labor, and Welfare.   To boost adoption, especially among small and medium-sized enterprises, the government has launched a "work style reform" initiative.

This campaign advocates for reduced hours, flexible work arrangements, overtime limits, and paid annual leave. Recently, the labor ministry has also begun providing free consulting, grants, and a growing collection of success stories to encourage more businesses to embrace these changes. The ministry’s website highlights the “hatarakikata kaikaku” campaign, meaning “innovating how we work,” with the goal of fostering a society where workers can choose diverse working styles based on their personal needs.

This approach is intended to create a positive cycle of growth and distribution, offering every worker a brighter future.   However, the initiative has faced challenges, with only three companies so far seeking guidance on regulations and available subsidies. Notably, among the 63,000 Panasonic Holdings Corp. employees eligible for four-day workweeks, only 150 have opted for this arrangement, as reported by Yohei Mori, who manages the program at Panasonic.  

This push for improved work-life balance marks a significant shift for Japan, a nation traditionally known for its workaholic culture, which was once credited with driving the country's recovery and impressive economic growth after World War II. Conformity and the pressure to prioritize work often result in employees taking vacations simultaneously, such as during the Bon holidays in summer and around New Year’s, to avoid being perceived as neglectful.

Long working hours are prevalent in Japan, where 85 per cent of employers claim to provide two days off per week and there are legal limits on overtime hours, as stipulated in contracts negotiated with labor unions. Despite these regulations, some workers engage in “service overtime,” performing additional work that goes unreported and unpaid.   A recent government report on “karoshi,” or death from overwork, reveals that Japan experiences at least 54 such fatalities annually, often due to heart attacks.

The Japanese workplace culture, characterized by serious dedication and strong bonds between employees and companies, is frequently depicted in TV shows and manga, according to Tim Craig, author of “Cool Japan: Case Studies from Japan’s Cultural and Creative Industries.”   Craig notes that in Japan, work is more than just a means to earn money; it’s a significant aspect of life. Officials believe altering this mindset is essential for sustaining a viable workforce, particularly in light of Japan's declining birth rate.

Current projections indicate that by 2065, the working-age population could drop to 45 million from the current 74 million, largely due to the nation's job-centric culture.   Advocates for a three-day weekend model argue that it could help retain workers, including parents, caregivers, retirees, and those seeking more flexible work arrangements or additional income, thereby extending their participation in the workforce. Akiko Yokohama, an employee at Spelldata, a small technology firm in Tokyo that offers a four-day workweek, takes Wednesdays off in addition to weekends.

This extra day provides her with the opportunity to get her hair done, attend appointments, or shop.   “It’s challenging to maintain productivity for five consecutive days when you're not feeling well. The additional day off helps with recovery and reduces stress,” Yokohama explained.   Her husband, a real estate broker who also has Wednesdays off but works weekends, benefits from this schedule too. It allows the couple to enjoy family outings with their elementary-aged child during the week.  

Several major companies have recently adopted the four-day workweek, including Fast Retailing Co., which owns brands like Uniqlo, Theory, and J Brand; pharmaceutical company Shionogi & Co.; and electronics firms Ricoh Co. and Hitachi. Even within the finance sector, traditionally known for its demanding hours, there has been a shift. For example, brokerage SMBC Nikko Securities Inc. began offering a four-day workweek in 2020, and Mizuho Financial Group provides an option for a three-day workweek.  

Despite these developments, some critics argue that employees on four-day schedules often end up working as hard as before but with reduced pay.   A Gallup survey on employee engagement highlights a broader issue: Japan ranks among the lowest in worker engagement globally, with only 6 per cent of Japanese respondents feeling engaged at work compared to a global average of 23 per cent.

This suggests that many Japanese workers are merely going through the motions without a strong sense of involvement or enthusiasm.   Kanako Ogino, president of Tokyo-based NS Group, which operates karaoke venues and hotels, believes flexible scheduling is essential for attracting and retaining employees in the service sector, where women make up the majority of the workforce. NS Group offers 30 different scheduling options, including a four-day workweek and extended breaks.

Ogino regularly surveys her 4,000 employees to understand their preferred work arrangements, aiming to support individual needs despite traditional pressures to sacrifice personal preferences for the collective good.   “In Japan, working long hours and doing unpaid overtime were once seen as badges of honor,” Ogino noted with a laugh. “But there’s no real dream in living that way.”