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Rethinking Overtime

Kaho Izumitani

Jul. 15, 2015

Working at a Japanese company can mean putting in hour after hour of overtime. But many young workers are starting to prioritize their hours outside the office. The annual job hunting season, when most Japanese companies hold interviews, has begun. Around the country, senior college students are lining up at career fairs dressed in simple business attire known as “recruit suits.”

And these job hunters have clear priorities when looking around at potential employers. Recent findings show that 1 out of every 3 students is looking for a job that allows them also enjoy their after-working hours. At one job fair, a student said “I hope to work fixed hours and have time to spend with my family too.” Another said “I’m not attracted to companies that demand a lot of overtime.”

For many Japanese workers, going home at 5pm is something they can only dream about. Working late into the night is seen as a sign of commitment in the corporate culture.

But some companies are moving away from that model, including SCSK, an IT company in Tokyo that is attracting young workers. “We feel that more and more highly-motivated and talented students are heading toward us!” Indeed, last year, more than 15,000 hopefuls applied for just 150 positions.

So just what makes the company so attractive? Three years ago, it implemented policies aimed at raising productivity and minimizing overtime. In the office, workers post notes announcing what time they intend to finish work for the day and their coworkers hold them to it. Meetings after 5pm are banned. Some meetings during office hours are done with the participants standing, in order to make them move ahead quickly.

Since the policies went into effect, the average number of monthly overtime hours has been cut in half. At the same time, productivity and profitability have soared.

Workers have seen their lives transformed by the new corporate culture. IT engineer Ken Iwamoto is one of them. He now enjoys more time with his family, as well as a successful career. Every afternoon, he leaves the office at 5:30pm to spend time with his three children. He gets to play with them, bathe them and put them to bed. “Knowing for sure I have private time every day makes a difference. I remain highly motivated,” Iwamoto says.

Smaller businesses are also attracting young people by offering a better work-life balance. Managers at Takushin, a scaffold leasing company in the city of Fukuoka, used to find it hard to find people, but now more than 200 people apply for the 2 or 3 positions that become available each year.

The key is the company’s employees-first policy. Everyone sticks to strict business hours. The company asks clients to respect that and doesn’t accept last-minute delivery requests. The average amount of overtime per employee is just 2 hours a year. The policy is saving time and money, and profits are on the rise.

CEO Tsugihiro Fujikawa says addressing work-life balance is his strategy to attract young people. “It used to be that students didn’t visit my company’s booth at job fairs. It was humiliating,” he recalls. “I realized that ‘employees first’ must come before ‘customers first’.”

Now when a bell in the workplace chimes at 5:20pm, everyone promptly leaves. Some enjoy an evening of leisure, while others go straight to day care to pick up their children.


Kaho Izumitani joined Aki Shibuya and Sho Beppu in the studio to discuss the growing trend.

Beppu: Would you say that one of the key signs of change in the Japanese economy is the way more people are looking for a good work-life balance?

Izumitani: Exactly. Japan’s working-age population is declining and so is the birthrate. So, raising employee productivity is a big priority for Japanese companies. For a long time, nobody really questioned the need for overtime. Having employees who worked late every day and skipped vacations helped Japan become an economic powerhouse in the 20th century. But it’s clear that the old way of doing business no longer works. Japanese labor productivity is two-thirds that of the US. And Japan ranks 22nd among the 34 OECD member countries in terms of productivity.

Shibuya: So it makes sense that young people are taking a different approach to work.

Izumitani: Exactly. Students I spoke with at a job fair told me they have no interest in working long hours, unless there’s a clear reason or goal. I was surprised when many of them told me about how important it is to use time efficiently. A leading recruiting company published a survey last month. It found that a growing number of students are trying to avoid companies that have reputations for long work hours and little time off. So recruiting younger workers is becoming a growing challenge for companies. There’s a Japanese expression that translates as “reading the air.” It means picking up on what people around you are thinking or feeling, and acting accordingly. That explains why so many people stay late at the office. They are waiting around until the boss leaves. But I think change is in the air.

Beppu: Some Japanese companies are adapting successfully to this new mood. Will other firms follow their lead?

Izumitani: The companies I profiled in this report have achieved solid results by changing their policy. More young people are applying for jobs, employee turnover is down, and improved worker productivity has helped raise profits. I spoke to a human resources consultant who says that fewer than 20 percent of Japanese companies have policies in place that encourage a work-life balance. But he believes that trying to get that balance right will become more and more important as the population of working-age Japanese declines. The Japanese economy is now a seller’s market for young job-seekers. Businesses need to move with the times and develop working environments that promote a healthy work-life balance.