In Japan, where the declining birthrate and aging population are advancing rapidly, many industries struggle to secure younger talent.

This article explains common questions for those considering hiring foreign workers, points to note when employing them, and how to address issues that foreign workers face.

Japan’s Current Situation Regarding the Acceptance of Foreign Workers

According to the “Status of Employment of Foreign Nationals” released by the Ministry of Health, Labour and Welfare in October of Reiwa 1 (2019), the number of foreign workers in Japan exceeded 1.6 million in 2019 and has continued to increase year after year.

The following factors are cited as causes of the increase:

  • Acceptance of international students and highly skilled foreign nationals is advancing
  • The number of foreign workers is increasing along with the spread of the Technical Intern Training Program
  • Employment conditions for “Permanent Residents” and “spouses of Japanese nationals” are improving
  • Talent shortages among engineers have become pronounced with the development of IT technology

Furthermore, in April 2019, a new status of residence system, “Specified Skilled Worker,” was established.

Under “Specified Skilled Worker,” foreign workers can be accepted under either the “Specified Skilled Worker (i)” or “Specified Skilled Worker (ii)” status of residence.

Going forward, the government will likely be pressed to take various measures to address labor shortages at companies and small businesses.

Breakdown of Accepted Foreign Workers

Below is a breakdown of accepted foreign workers by nationality, prefecture, and status of residence.

〇 By nationality

Looking at accepted foreign nationals by nationality, the largest group is Vietnam with 453,344 people (26.2% of all foreign workers), followed by China with 397,084 (23.0%) and the Philippines with 191,083 (11.1%).

Source: Ministry of Health, Labour and Welfare, Summary of Notifications of the “Status of Employment of Foreign Nationals” (as of the end of October Reiwa 3)

〇 By prefecture

Looking at the share by prefecture, Tokyo accounts for 25.7%, Aichi for 7.9%, and Osaka for 7.6%.

In terms of growth rate by prefecture, Tochigi (16.5% year on year), Wakayama (14.5%), and Yamanashi (12.0%) were high. Meanwhile, Tottori recorded a decline of −0.8%.

Source: Ministry of Health, Labour and Welfare, Summary of Notifications of the “Status of Employment of Foreign Nationals” (as of the end of October Reiwa 3)

〇 By status of residence

By status of residence, “status of residence based on status or position1” was the largest at 580,328 people, accounting for 33.6% of all foreign workers. This was followed by “status of residence in professional or technical fields2” at 394,509 (22.8%) and “Technical Intern Training” at 351,788 (20.4%).

Source: Ministry of Health, Labour and Welfare, Summary of Notifications of the “Status of Employment of Foreign Nationals” (as of the end of October Reiwa 3)

What Are Foreign Worker Issues? Causes That Make Problems More Likely

Along with the increase in foreign workers residing as technical intern trainees or under Specified Skilled Worker status, issues on the accepting side have also emerged.

Here, we explain problems that companies considering accepting foreign workers should know in advance, as well as their causes and countermeasures.

What Are Foreign Worker Issues?

Foreign workers are a valuable presence for companies. However, various problems have been pointed out regarding wages and working hours at the time of employment. As accepting companies, it is necessary to have accurate knowledge and prepare in advance.

Problems That Tend to Arise with Foreign Workers and Main Causes

According to publications by the Ministry of Health, Labour and Welfare, the top five reasons why employers of technical intern trainees receive supervision and guidance were safety standards, working hours, payment of premium wages, payment of wages, and work rules. Among these, violations related to wages and working hours are of particular concern. One cause is that some employers hold the mistaken belief that they can set low wages for technical intern trainees and have them work long hours. The existence of foreign workers laboring under poor working conditions has become a major problem.

Source: Ministry of Health, Labour and Welfare, Status of Supervision and Guidance of Implementing Organizations of Technical Intern Training, Referrals for Prosecution, etc. (Reiwa 2)

Advantages and Disadvantages for Companies Accepting Foreign Workers

For companies, talent is a treasure, and ongoing labor shortages can put the survival of the business at risk.

There is also the reality that Japan’s shortage of younger talent can now only be resolved by accepting foreign workers.

Here, we introduce advantages and disadvantages you should know when considering hiring foreign workers.

Advantages of Accepting Foreign Workers

Accepting foreign workers offers the following advantages.

  • Younger workers can be secured
  • Globalization within the company advances
  • New ideas are generated, contributing to workplace revitalization
  • It can serve as a foothold for market development and overseas expansion

For more on the advantages and disadvantages of accepting foreign workers, see also our article “What Are the Advantages and Disadvantages of Accepting Foreign Workers? Points to Note You Should Know in Advance.” Please take a look.

Disadvantages of Accepting Foreign Workers

Accepting foreign workers also has the following disadvantages.

  • Communication in the workplace can be difficult
  • Misunderstandings can arise from cultural differences
  • The hiring process takes time
  • Support and training at the time of acceptance also require time and expense

Points to Note When Accepting Foreign Workers

We explain the points you should note when accepting foreign workers.

Confirm Requirements Such as the Status of Residence of the Foreign National You Wish to Accept

When considering accepting foreign workers, the most important thing is to confirm the requirements of the status of residence. If the requirements are not met, acceptance is not possible.

Confirm in advance whether the person meets the status of residence requirements needed for acceptance, such as for engineers, technical intern trainees, or Specified Skilled Workers.

Clearly State Working Conditions in the Employment Contract and Related Documents

The employment contract prepared after a hiring decision must be prepared in a language the foreign worker can understand (such as their native language).

At the time of the employment contract, both parties should also carefully confirm detailed conditions such as pay raises, evaluation systems, working hours, and breaks.

Please note that if you violate the Labor Standards Act or other laws, you may become unable to accept any foreign workers going forward.

Prepare a Support System After Acceptance in Advance

Before employment begins after a hiring decision, it is important to put in place a support system for after acceptance.

Foreign workers leave familiar surroundings and are filled with anxiety and loneliness. Even after investing expense and time in hiring, some cases result in an early return to their home country.

Ensure adequate support until they become accustomed to work and daily life in Japan.

Consult YourBright for Hiring Specified Skilled Worker Talent

We have explained the information needed to accept foreign workers, as well as the advantages and disadvantages.

The advantages of accepting foreign workers outweigh the disadvantages. Companies considering accepting Specified Skilled Worker foreign nationals are encouraged to consult YourBright.

We carefully respond to requests such as “I want to learn more about the Specified Skilled Worker system” or “I would just like to consult once.”