Shrinking, Aging Pool of Workers Push Japan to Find New Ways to Fill Jobs

Japan’s shrinking and aging population is spurring efforts by businesses to find new ways to keep the elderly employed for longer, as they seek to address a chronic and expanding labor shortage.

Author of the article:

Bloomberg News

Kanoko Matsuyama and Supriya Singh

Published Dec 03, 2023 • 5 minute read

(Bloomberg) — Japan’s shrinking and aging population is spurring efforts by businesses to find new ways to keep the elderly employed for longer, as they seek to address a chronic and expanding labor shortage.

Earlier this year, the government committed ¥3.5 trillion ($23.6 billion) on measures to increase the birthrate, but the shortfall in available workers has been challenging employers for some time. Although Japan has taken steps to relax immigration controls, that hasn’t been enough to make up for a shortfall.

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All of this has forced companies to come up with new ways to find labor and keep their operations running smoothly, sometimes with novel ideas. Here are some of the steps that shops, restaurants and other businesses are taking to attract and retain older staff.

Elderly Care

Care for elderly folk is one area that’s seen an acute shortage of labor. What’s interesting is that many of the people tending to those who need help with their aging bodies, are themselves on the older side.

The average age of caregivers in Japan is 50, already about seven years greater than the average across all industries; that figure is projected to rise further as facilities struggle to attract new workers. Labor shortages in the sector are predicted to triple to 690,000 by 2040, according to the Ministry of Health, Labour and Welfare.

Job-matching site Sketter was designed so that non-essential jobs in nursing homes can be advertised. Tasks such as cooking, cleaning and meal support can be handled by paid volunteers, giving caregivers more time to devote to their main tasks of taking care of the elderly.

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“Seniors are searching for ways to engage in society even after they retire,” said Ryohei Suzuki, who founded Sketter in 2019. “They might be able to work full time, but they are looking for lifework and means for life.”

Aging Taxi Drivers

Japan’s government has said it plans to raise the retirement age of drivers of privately owned cabs to 80, from 75 currently.

Rural areas are suffering from an acute shortage of transportation for the elderly, as local governments cut back on public transport, especially buses, due to declining populations in villages and towns. As a result, cabs are becoming the only option for those who no longer drive and need to get to hospitals, or shop for daily goods.

A government official said that taxi drivers tend to make more money in cities and are usually reluctant to move to regional areas; by raising the driving age, they may be encouraged to remain in rural areas. Currently, privately owned cabs are licensed to operate in cities with a population of 300,000 or more, but that criteria may also be scrapped.

Read More: Driver Shortage Sends Japan Taxi Firms to Recruit New Graduates

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The Ministry of Land, Infrastructure, Transport and Tourism is sought public input through mid-October and is now working toward announcing new policies, according to the official.

Taxi companies are also seeking to hire younger drivers straight out of school, offering more flexible working hours in order to make up for staffing shortages.

New Job Categories

Recruit Holdings Co., Japan’s biggest jobs and staffing firm, began working with employers about a decade ago to break up jobs into narrower tasks so that older workers could be matched up with specific duties, such as:

Stocking supermarket shelves ahead of store hoursCleaning and preparing factories before workers arriveSpecific job shifts at gasoline stands, warehouses and fast-food restaurants

As a result, employers found it easier to find staff by offering more flexible hours earlier in the day, which cater to older people because they tend to prefer working in the morning rather than late at night, according to Kuniko Usagawa, director of JOBS research center at Recruit Jobs Co.

“It’s a great match,” Usagawa said. “At first it was great for supermarkets, but now there are people opening gas stations or cleaning factories. Especially in the logistics sector, we find people who take the first train to work at 5 a.m. and get home after 8 a.m.”

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The same thinking applies to stay-at-home mothers who might prefer to work in the middle of the day when they have more free time, Usagawa said. People with physical disabilities can also find more opportunities by being matched with specific, simpler tasks instead of a job requiring a wide range of skills.

Usagawa points out that older people who have jobs tend to require less health care and make fewer hospital visits. Many have told her that their main reason for taking up jobs is to meet people and have meaningful social connections.

“Japan’s aging population is often viewed negatively, but I believe that this idea can be exported globally, considering the fact that other countries are facing aging populations,” Usagawa said.

The Restaurant of Mistaken Orders

In 2017, a pop-up restaurant hired dementia patients from nursing homes to work as waiters, taking orders and delivering meals to customers. Mistakes happened along the way — some orders never got through, or food was delivered to the wrong table. But that was the point: to raise awareness and offer support, according to Shiro Oguni, who worked on the project.

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“All we did was put up a signboard that said ‘Restaurant of Mistaken Orders’,” Oguni said. “By setting that in advance, the customers were more accepting. No one got upset even if there were mistakes.”

Dementia afflicts 55 million people worldwide and is projected to double over the next two decades, according to Alzheimer’s Disease International. In Japan, where the ratio of elderly people are highest in the world, dementia is predicted to afflict one in five people by 2025.

The restaurant project inspired businesses and eventually spread across more than 50 locations in Japan and beyond, to South Korea, Taiwan, China and the UK and Canada. Oguni said he gets almost 100 inquiries a month and 90% of them are from overseas.

“It’s extremely difficult to increase social acceptance and we need a mechanism that will make society want to change it,” Oguni said. “Those who were inspired by the idea can implement it in their own way in their own society.”

—With assistance from Reed Stevenson.

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