In recent years, Japan’s labor shortage has grown more severe. In some industries, companies face situations where they recruit but cannot attract people. To resolve shortages serious enough to threaten business continuity, more companies are considering accepting foreign workers.

This article explains in detail the advantages and disadvantages of hiring foreign workers, as well as points to keep in mind when moving forward with recruitment.

What Is the Employment Situation for Foreign Workers in Japan?

According to the summary of the “Employment Status of Foreign Nationals” notification status released by the Ministry of Health, Labour and Welfare in October 2021, the number of foreign workers has reached nearly 1.73 million and continues to increase year after year.

In particular, the number of foreign workers accepted in manufacturing has continued to rise substantially since 2007. At present, because effects such as entry restrictions related to the spread of COVID-19 have been prolonged, acceptance numbers have remained largely flat.

Labor shortages at Japanese companies are expected to accelerate further. As of 2022, the range of occupations open to foreign workers has also expanded, and foreign workers will remain an indispensable workforce for Japanese companies going forward.

Source: Ministry of Health, Labour and Welfare, “Notification Status of the Employment of Foreign Nationals” (as of the end of October each year)

Note 1: “Status of residence in professional or technical fields” refers to statuses that permit residence for the purpose of employment, and includes business managers, engineers, researchers, cooks of foreign cuisine, Specified Skilled Workers, and others.

Note 2: “Status of residence based on status or position” is based on the status or position held in Japan, and includes Permanent Residents, people of Japanese descent, and others.

Note 3: “Designated Activities” refers to activities specially designated by the Minister of Justice for individual foreign nationals.

Note 4: “Activities outside the scope of status” refers to engaging in work activities other than those that are the original purpose of residence (in principle, within 28 hours per week), and includes part-time work by international students and similar cases.

Nationality Breakdown of Foreign Workers in Japan

By nationality, Vietnam accounts for the largest share at 26.2% of all foreign workers, followed by China (23.0%) and the Philippines (11.1%). While employment of Vietnamese nationals has increased, China declined 5.3% year on year, and South Korea (1.8%) and Nepal (1.4%) also declined.

*Reference: Ministry of Health, Labour and Welfare / Summary of the Notification Status of “Employment of Foreign Nationals” (as of the end of October 2021)

The “Specified Skilled Worker” System for Accepting Foreign Workers, Launched in 2019

The Specified Skilled Worker system was launched in April 2019 to help address Japan’s severe labor shortage. Under certain conditions, companies can employ foreign workers under the “Specified Skilled Worker” status of residence.

It became possible to accept foreign workers who have job-ready skills in industries where labor shortages remain difficult to resolve even after efforts to improve productivity and secure domestic talent.

The Specified Skilled Worker system also requires the ability to speak the minimum level of Japanese needed for daily life.

For more details on Specified Skilled Worker, see “What Is Specified Skilled Worker? A Comparison of (i) and (ii) and Differences from Technical Intern Trainees.”

Differences Between Specified Skilled Worker (i) and (ii)

The Specified Skilled Worker system has two statuses of residence: “(i)” and “(ii).” The differences are summarized below.

(i)

  • Period of stay: up to 5 years
  • Family accompaniment: not permitted
  • Skill level: must pass the required skills examination
  • Eligible industrial fields: 14 categories

(ii)

  • Period of stay: unlimited
  • Family accompaniment: permitted
  • Skill level: must have skills equal to or greater than those required for the (i) examination, and practical experience as a supervisor is also required
  • Eligible industrial fields: 2 categories

(ii) is a status of residence granted to foreign workers who hold a higher-level qualification than (i). Hiring a foreign national under (ii) can be considered securing outstanding talent for the company.

For more details on the differences between (i) and (ii), see the article “What Is Specified Skilled Worker? A Comparison of (i) and (ii) and Differences from Technical Intern Trainees.”

Advantages of Employing Foreign Workers

What advantages come with employing foreign workers? Below are several of them.

・You can secure younger talent

Japan is one of the world’s most aged societies. The younger population will continue to decline, and talent to carry companies forward will only become scarcer.

By hiring foreign workers, companies can secure younger workers, which can also help revitalize the workplace.

・Many are open to working in regional locations

Younger Japanese workers often prefer to work in major cities such as Tokyo or Osaka, but foreign workers frequently have less attachment to a particular region.

They tend to place greater weight on skill acquisition and working conditions than on location. Hiring foreign workers can therefore also help ease labor shortages in regional areas.

Group of Diversity People Team smiling and cheerful in success work with laptop at modern office. Creative Multiethnic or Ethnicity teamwork feeling happy, enjoy and engaged with achievement project.

・You can secure ambitious, growth-oriented talent

Foreign workers often have a strong drive to gain knowledge and advance their careers by working in Japan.

They tend to spare no effort to improve themselves and keep working to deliver results.

Seeing that approach to work can also raise the motivation of Japanese employees, which is a major benefit for employers.

・Multilingual capability becomes possible in business settings

In a workplace of only Japanese staff, conversation is naturally in Japanese. With foreign workers present, however, basic communication becomes necessary, which can lead Japanese employees to pick up languages other than Japanese, including through gestures.

They may also serve as interpreters in overseas transactions, potentially broadening the scope of business significantly.

・Ideas emerge from different perspectives

Accepting workers from overseas means encountering other countries’ cultures, customs, and religions. Opportunities to engage with values and ways of seeing things not found in Japan naturally advance globalization within the company.

It also creates chances to learn different approaches and viewpoints, which helps revitalize the organization.

Disadvantages of Employing Foreign Workers

We have covered the advantages of employing foreign workers, but of course there are disadvantages as well.

Below we explain in detail what disadvantages companies may face.

・Smooth communication may be difficult at first

Naturally, foreign workers’ Japanese ability varies. The premise is that they can handle the minimum conversation needed for daily life, but they cannot understand expressions, customs, and subtle nuances that only Japanese people grasp.

It is also important to note that culture and values that seem obvious in Japan may be completely incomprehensible to foreign nationals, and communication may not go smoothly. These issues often ease over time as people become accustomed, but extra care is needed especially at the beginning.

Image photograph of man and woman chatting (lovers / couples)

・Recruitment requires more person-hours than usual

When hiring Japanese nationals, the process is generally interviews and tests, then deciding whether to hire and notifying the candidate. When employing foreign nationals, however, several additional steps are required.

For example, confirming that the work visa is appropriate for the job being filled, and in some cases coordinating with local talent agents overseas, increases the workload.

・You need to establish an internal acceptance framework

When accepting foreign workers, you need a framework that secures understanding and cooperation from other staff. Teaching the job also tends to involve more communication challenges than usual, and without the cooperation of other staff it is fair to say that employing foreign workers will be difficult.

In addition, cultural differences (how toilets and shared spaces are used, how work is carried out, and so on) can make it easier for staff stress to build up.

In any case, it is important to note that employing foreign workers is difficult unless a solid acceptance framework is in place.

・Training costs are higher than usual

Be prepared for the fact that the cost of training until the job is learned will be higher than for Japanese employees. If Japanese ability is insufficient, you first need to encourage Japanese language acquisition. On top of that, skills training is also required, so costs naturally increase.

・Understand that they are prone to stress in unfamiliar places and environments

Foreign workers leave the countries they are used to and live and work in an unfamiliar Japan. Language differences and other factors can cause stress as they learn the job.

Accepting organizations should make a point of communicating frequently and take care not to leave them isolated. They should also always watch for workplace bullying and for conduct or remarks that could constitute power harassment, and when workplace guidance is needed they should keep in mind considerations that differ from those for Japanese employees.

・Do not view them as cheap labor

Not a few managers and hiring staff hold the mistaken view that foreign workers are talent who can be employed at lower wages than Japanese workers. However, all conditions (wages, break times, working hours, and so on) must be equal to or better than those for Japanese workers. Employers also need to clearly recognize that foreign workers are outstanding talent with advanced skills and knowledge.

In any case, understand that foreign nationals are not workers who can be hired cheaply and pushed beyond reasonable working hours.

・Confirm that the job content matches the status of residence

The most important point when considering employment of foreign nationals is “for which occupation they will be hired.” For foreign workers to work in Japan, obtaining an appropriate status of residence is the first condition.

At the interview stage, it is important to carefully confirm whether they meet the conditions appropriate for the occupation being filled, as well as the qualifications, skills, and experience they hold.

It is also important to make sure all staff in the company understand that cases such as hiring someone as an engineer but actually assigning them only simple tasks may be subject to penalties.

Steps for Hiring Foreign Workers

The flow from recruiting to employing foreign workers can be summarized as follows.

  • Confirm the status of residence of the foreign national you are considering hiring
  • Confirm whether a work visa can be obtained
  • Interview
  • Once a job offer is decided, prepare an employment contract stating conditions, compensation, and other terms
  • Apply for a work visa and wait for review by the immigration authority
  • Employment is finalized after the work visa is obtained

For more details on hiring foreign workers, see also the article “Explaining the Process of Hiring Foreign Workers! What Are the Merits and Points to Note?”[P3]. Please take a look.

If you are considering hiring Specified Skilled Worker talent, consult YourBright—we have extensive experience

This article explained the merits and demerits of hiring foreign nationals. We hope it will be helpful for those currently considering employing foreign workers.

YourBright Inc. is a pioneer in Specified Skilled Worker talent placement. Since registering with the immigration authority in 2019, we have a track record of supporting numerous Specified Skilled Worker foreign nationals.

Business owners and hiring managers considering employing foreign nationals are welcome to contact YourBright anytime.

About the author

Hayato Yamashita
Director, YourBright Inc. / Practical Manager, Registered Support Organization
Specializes in Specified Skilled Worker, international talent hiring, registered support, and status of residence practice, and is involved in the practical work of international talent placement and acceptance support.

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Article review framework

This article has been reviewed by staff involved in international talent placement, registered support, and status of residence practice, based on the practical expertise of YourBright Inc., a Registered Support Organization. Systems and operations may change, so please also check the latest information from public agencies.

Practical points to note

For Specified Skilled Worker, status of residence, and foreign employment, it is important to manage not only institutional requirements but also employment contracts, support plans, post-joining interview records, and consultation response histories in a consistent way. Organizing required documents and internal personnel before acceptance, and recording the implementation of regular interviews and daily life support after hiring, helps prevent trouble and support retention.

Author information

Author: Hayato Yamashita. Director, YourBright Inc. / Practical Manager, Registered Support Organization. Specializes in Specified Skilled Worker, international talent hiring, registered support, and status of residence practice, and is involved in the practical work of international talent placement and acceptance support.

References

Immigration Services Agency of Japan: Specified Skilled Worker system / Ministry of Health, Labour and Welfare: Measures for Foreign Employment / YourBright Inc.: Company Overview