Japan Retirees in Demand as Labor Crunch Worsens

Part of Japan’s plan to ease its severe labor shortage involves enticing retirees back to work. But even they are in short supply these days, crippling industries that once had an ample labor pool of seniors willing to work.

Industries that depend on seniors for a significant portion of their workforce—like security, cleaning and building management—have seen job applicants plummet recently. Now, these industries are in a fight with other sectors as more companies extend their retirement age to hold onto aged employees, Nikkei reported.

“Along with cleaning and security, we were previously considered one of the three main choices for seniors who wanted to continue working,” said a representative from building management provider Tokyu Community. “But applications have suddenly fallen over the past few years.”

The company, which employs many people past retirement age, saw job applications drop 13% in fiscal 2017 from the previous year.

At Daiwa LifeNext, subsidiary of construction company Daiwa House Industry, applicants are also becoming scarce. “It’s getting harder to attract seniors,” said a company representative.

Companies are pulling out the stops to find staff, offering improved work conditions and higher remuneration. Tokyu Community raised its annual salary 2% last year.

The drop in applicants is being blamed on increased employment of seniors in other industries. “There used to be few companies that accepted seniors,” says Kuniko Usagawa, head of Jobs Research Center at Recruit Jobs. “But in the past few years, the retail and service industries have been actively stepping up hiring of retirees.”

As seniors increasingly find themselves in new roles, such as customer-facing jobs, building management and other traditionally senior-friendly fields have been hit.

Job advertisements welcoming people 60 and older have increased eightfold over the past two years on job listing website Baitoru, run by recruitment agency Dip. Meanwhile, companies continue to extend the retirement age: Last year, supermarket chain Ito-Yokado raised it to 70 for post-retirement part-timers.

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Industries that formerly had no problems finding seniors have had to boost their recruitment efforts. According to En-Japan, jobs in building management and security grew 1.8 times and 1.5 times, respectively, over a year. Dip says the number of cleaning jobs has risen 1.5 times. “The average hourly wage increase of about 20 yen (18 cents) year-on-year is comparably higher than in other industries,” according to Aidem, a part-time job recruitment company.

One company has turned to technology to sidestep the labor shortage. Secom, a leading security company, is developing a sensor-equipped robotic arm that can detect suspicious objects. The company hopes to begin selling the arm sometime this year. “It can be used instead of humans for security patrols at night,” according to Secom.

Some security companies are exploring other technology, such as using drones to patrol buildings.

Still, high-tech is not the answer for every company. “Workplaces that hire seniors are overwhelmingly small- and medium-size businesses, and they need people,” said Usagawa.

Tokyo-based Five A Company employs a person who is nearly 80 years old, according to company head Takahiro Mamiya. The cleaning company recruits about 100 employees each year, most of whom are seniors.

In 2017, Five A’s marketing costs for recruitment doubled over the previous year. “Even though we’ve raised wages, we’re worried that we won’t be able to fill all available positions,” said Mamiya.

The Abe government considers older workers as one way to ease the labor crunch, incorporating the principle into its fiscal plan. But “using just seniors and women has its limits,” according to Aidem.

Workers 60 and older numbered 13.28 million in 2017, an increase of 11% over the past five years, according to Japan’s Ministry of Internal Affairs and Communications. With job openings still outnumbering applicants, however, it remains to be seen if Abe’s efforts can put a dent in the country’s worsening labor shortage.