Japanese Companies Rushing to Raise Wages to Attract Talent

Tokyo, Feb. 21 (Jiji Press)--Japanese companies have been rushing to raise pay outside "shunto" spring wage talks as they compete for skilled personnel to achieve sustainable growth. Executives are concerned over an outflow of workers from Japan where average pay is lower than in the United States, Europe, South Korea and elsewhere, due to deflation and weak economic growth. This year's shunto talks are underway at many major companies. The Japanese Trade Union Confederation, or Rengo, the umbrella body for labor unions across the country, calls for a wage raise of about 5 pct. Many companies that have already announced wage increases have pledged raises that surpass Rengo's goal. On Feb. 7, Nintendo Co. <7974> President Shuntaro Furukawa said that the game maker will implement a 10 pct pay-scale increase for all employees in April. While Nintendo is forecast to post lower sales and profits for the year ending March, Furukawa said, "It's indispensable to acquire outstanding human resources to improve our competitiveness." Kuraray Co. <3405> plans to carry out a combined increase of about 8 pct in regular wages and pay scale. "By fully investing in personnel, we aim for a virtuous cycle that creates future profits," said Hitoshi Kawahara, president of the chemical maker. Glass maker AGC Inc. <5201> said it will consider an average combined increase of some 6 pct in regular wages and pay scale. Fast Retailing Co. <9983>, the operator of Uniqlo clothing shops, said it will raise annual salaries by up to 40 pct. Motor maker Nidec Corp. <6594> plans to raise average pay by 7 pct this spring as part of a broader plan to increase pay by 30 pct by fiscal 2025. These companies apparently aim to show their presence for recruiting activities by announcing wage increases in advance, an official at an employers' group said. "Any shunto-linked effort by individual companies will not draw enough attention," the official said. Iris Ohyama Inc. President Akihiro Ohyama said that the household appliance maker saw a "positive reaction" in recruiting efforts after hammering out a 5 pct wage increase in January. "Companies competing globally are increasingly aware of low wages in Japan," said Hisashi Yamada, vice chairman of Japan Research Institute Ltd. "I think (such companies) worry that young and excellent personnel may be hunted by foreign firms." END