5 ways to increase your market value: Unraveling the latest trends in Japan's labor market
Estimated Read Time: 5 minutes
As companies grapple with talent shortage in Japan, the power dynamic has shifted from corporations to the workforce. The dominant factor for the declining working population in Japan is due to the lowest birthrate in over 100 years and an ever-aging population, leading to a war for talent.
According to the Statistics Bureau of the Ministry of Internal Affairs and Communications, the average working population in 2021 was 68.6 million, a decrease of 80,000 from the previous year, marking the second consecutive year of decline. The Cabinet Office predicts a further decline, with Japan's population expected to reach approximately 87 million by 2060 and 43 million by 2110. Considering these circumstances, the labor shortage in Japan is expected to worsen in the future.
Another significant issue for Japanese workers is the problem of low wages. In the OECD's annual average wage ranking for 2022, Japan slipped to the 25th position out of 38 countries, dropping one rank from the previous year. Japan's average wage is nearly half that of the United States, and the wage gap with South Korea has widened by $7,413 (with a $3,036 difference in 2021). As a result, wages in Japan have remained stagnant, leading skilled individuals to seek better opportunities both domestically and internationally. This poses a challenge for companies in attracting and retaining top talent.
However, the current state of the Japanese labor market does offer workers the opportunity to secure more competitive compensation by increasing their market value through job changes. This enables them to choose the most suitable workplace and conditions, expanding their career options and the benefits associated with changing jobs. So, how can you become a highly sought-after professional in this market? This article will outline specific methods and strategies you can implement to increase your market value in Japan.
Labor market reform in Japan
The Japanese government has recently announced "Labor Market Reform" as a solution to address the aforementioned labor market challenges. The primary objective of this reform is to establish a new system that supports the labor market, with a focus on promoting diversity in work styles and addressing existing employment and unemployment issues. The reform encompasses several crucial measures aimed at narrowing the wage gap with other countries, establishing equitable wage structures for similar job roles, eliminating gender and age disparities, and preventing wage decreases when switching jobs. The following key points outline the essential measures:
1. Support for re-skilling
Given the rapid societal changes, including the advent of Digital Transformation (DX), there is a growing need for workers to continually acquire new skills throughout their lives. To address this evolving landscape, the government is investing in initiatives that encourage individuals and employees to upgrade their skills according to perceived requirements. Additionally, effective support measures for companies are being considered to adapt to these changing labor demands.
2. Shift to job-based pay
Traditionally, Japan has adhered to a lifetime employment system. However, the modern labor market calls for greater diversity and flexibility, with multiple job changes becoming the norm throughout a person's career. Consequently, recruitment methods are transitioning from the traditional "membership-based employment" model to "job-based employment." This shift focuses on hiring individuals with specific skills and work experience tailored to defined duties. By embracing "job-based employment," the government aims to narrow the wage gap between Japanese and foreign firms, allowing individual companies to introduce job-based pay structures that align with their unique circumstances.
3. Labor mobility to growing sectors
The number of job seekers in Japan has increased by approximately 1.2 million following the outbreak of the COVID-19 pandemic, reaching 9.68 million in 2022 according to the Labor Force Survey conducted by the Ministry of Internal Affairs and Communications. This indicates a rise in employment mobility. To facilitate labor movement towards expanding sectors, the government is promoting several initiatives, including:
5 strategies to increase your market value
Labor market reforms have opened up new avenues for job seekers, and it's crucial to leverage these opportunities by focusing on personal growth and acquiring high-demand skills. We have prepared an effective strategy to help you effectively utilize these market trends to your advantage. Here are five specific measures to consider for increasing your market value:
1. Recognize your skills, strengths, and achievements
Identify your unique abilities and experiences that set you apart from others. These distinguishing factors make you valuable and in high demand. Keep your resume up to date, emphasizing your accomplishments with quantifiable measures and tangible outcomes. This provides concrete evidence of your capabilities and helps showcase your expertise effectively.
2. Continuously hone your expertise
Continuous self-investment is key to becoming a highly marketable professional in times of rapid change. Dedicate time and effort to refine your skills and expand your expertise. Stay updated by acquiring relevant qualifications and taking courses that align with high-demand areas. This ongoing commitment to personal growth demonstrates your adaptability and willingness to stay ahead in your field.
3. Focus on high-demand skills
To enhance your market value, it's essential to focus on skills that are in high demand. Stay informed about industry trends and developments, such as digital fields, technology advancements, and proficiency in languages like English. Regularly check job postings to identify sought-after skills and qualifications. Utilize salary guides and other resources to gain insights into the current job market and discover in-demand jobs and skills.
4. Expand your network
Networking plays a crucial role in increasing your market value in the labor market. Proactively expand your connections with industry professionals and peers. Utilize platforms like LinkedIn to connect with relevant individuals, attend seminars and events related to your field, and actively participate in online communities. Building a strong network opens doors to new opportunities and enables you to stay updated with industry insights and job prospects.
5. Establish personal branding
Developing a strong personal brand is essential for effectively communicating your expertise and goals. Utilize social media platforms to actively share insights, knowledge, and updates about yourself. Clarify your areas of expertise and clearly communicate what you're looking for professionally. By reaching out to a wide network of people, you increase your chances of seizing new opportunities and positioning yourself as a valuable asset in the job market.
Summary
Increasing your market value in the business world requires more than just acquiring specialized and in-demand skills. It also involves leveraging your network of contacts and establishing a strong personal brand. To enhance your market value, it's essential to maintain a flexible learning attitude and proactive behavior. Given the favorable labor market for job seekers in Japan, it's crucial to carefully reconsider your career path and skill development. Seize this opportune moment to actively enhance your market value through job changes.
If you need guidance on career advice, market trends, or exploring career opportunities, don't hesitate to reach out to a consultant. They can provide valuable insights and support in your quest to increase your market value and make informed decisions about your professional growth.
See the latest market trends and in-demand roles in our 2024 Salary Guide.
