The Growth of Part-Time Employment in Japan: Opportunities for Foreign Businesses

The Growing Interest in Part-Time Work in Japan

In response to the emergence of telework during the COVID-19 pandemic, Japan has witnessed a surge in part-time work. Approximately 10% of the population is engaged in part-time employment, with 40% of them attributing their part-time work to the pandemic. Furthermore, even after the pandemic has subsided, 96% of part-time workers express their intention to continue this work style.

Until a few years ago, many Japanese companies strictly prohibited part-time work, following government guidelines. However, in 2018, new regulations were introduced, lifting the ban on part-time work and leading to numerous companies amending their employment rules to accommodate it. Currently, 51.8% of companies have HR systems that allow part-time work.

The Many Benefits of Part-Time Work for Foreign Companies

In the realm of business, human resources play a pivotal role in driving growth. When foreign companies expand their operations in Japan, full-time employees are traditionally the backbone of their workforce. However, finding exceptional talent can be challenging, and the associated costs, including labor expenses, can be substantial.

Part-time work in Japan offers a flexible and cost-effective solution. Unlike hiring full-time employees, part-time workers can provide valuable support, and employers can significantly reduce costs. Employing full-time staff entails navigating complex legal aspects related to hiring and labor practices.

Conversely, recruiting part-time employees through platforms like Indeed is a straightforward process, and remote work is the primary way, allowing for flexible working arrangements. Work hours and durations can be adjusted, from part-time employment for a few hours a day to fixed-term contracts, all of which can help in lowering labor costs. Furthermore, meeting certain income and working hour requirements can exempt part-time employees from social insurance contributions, considerably reducing the financial burden on the employer. (In Japan, social insurance contributions are typically divided equally between the employer and the individual.)

There are additional advantages to employing part-time workers. Nowadays, individuals who actively engage in part-time work tend to be highly motivated and skilled. This provides foreign companies with an excellent opportunity to connect with outstanding talent, build relationships, and reduce the risk of post-recruitment mismatches. In Japan, when using a recruitment agent, hiring costs typically amount to around 20% to 30% of the annual salary.

For foreign companies, hiring part-time workers in Japan offers numerous benefits.

In Conclusion

The COVID-19 pandemic has spurred the adoption of telework in Japan and an increasing trend in part-time employment. With the proliferation of telework, the demand for part-time work is expected to continue to rise. This shift presents significant advantages for foreign businesses. Operating with part-time staff enables them to initiate their business operations in Japan efficiently and cost-effectively.

Note: Please consult with such experts as a lawyer or a certified public accountant for detailed advice and information.

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