Approx. 50% of companies are aware of the securement of employment opportunities for people up to the age of 70. 40% of companies and 60% of registered users of career change support services feel positive about the enforcement of the revised Elderly Employment Stabilization Act.
-en world Japan The attitude survey on the labor force participation by the elderly-
en world Japan K.K. (headquarters: Chuo City, Tokyo, President: Vijay Deol), one of Japan’s largest recruiting firms specializing in global human resources, conducted a questionnaire survey on the obligation to secure employment opportunities for people up to the age of 70 in the revised Elderly Employment Stabilization Act (revised in April 2021), and 113 companies and 1,275 registered users of career change support services responded.
■What is the obligation to provide employment opportunities for workers up to the age of 70?
The revised Act on Stabilization of Employment of Elderly Persons stipulates this obligation, which is scheduled for enforcement in April 2021.
The current Act on Stabilization of Employment of Elderly Persons requires business owners with a mandatory retirement age of 64 or below to implement measures for the employment of workers up to the age of 65. However, the mandatory retirement age was raised to the age of 70, and companies are now obliged to provide employment opportunities for people up to the age of 70 because of the necessity to develop an environment where elderly people motivated to work can fully exercise their skills, which will help to achieve social security for all generations in this era when people can live 100 years.
Unlike when the retirement age was 65, it is now necessary to increase the number of options so that any elderly employee can actively work by taking advantage of their skills to secure employment opportunities up to the age of 70. Thus, the government is considering the development of legal provisions to provide different options and a system where management and labor can discuss the options to provide employees or discuss how each worker can choose the options that apply to them. Options that can be provided as legal provisions are as follows:
(1) Elimination of the mandatory retirement age
(2) Extension of the mandatory retirement age to the age of 70
(3) Introduction of a continued employment system (including continued employment at subsidiaries and affiliates)
(4) Realization of new employment at other companies (excluding subsidiaries and affiliates)
(5) Financing freelance contracts with individuals
(6) Support for individuals to start a business
(7) Provision of financial assistance to individuals to participate in social contribution activities
In addition, in order to promote employment opportunities for people up to the age of 70, it is considered appropriate to develop laws and regulations in two stages and to start working on the first stage.
The first stage is considered as follows:
1) The above options shall be clearly specified in laws and regulations and the obligation to provide employment opportunities for people up to the age of 70 shall be stipulated.
2) If deemed necessary, the Minister of Health, Labor and Welfare will require business owners to develop plans between management and labor and implement those plans.
Based on the progress of the first stage, the government will consider revising laws on some of various options as the second stage to guarantee the implementation of such revisions by announcing company names (to oblige them) as under current law.
The government will consider exemptions in cases where management and labor agree, such as poor health and poor attendance as under previous laws. (As of May 2020)
KPI 2025: Employment rate of people aged 65-69: 51.6％
Reference/source: Prime Minister’s Office of Japan “Growth Strategy Portal Site”(Japanese)
Summary of survey results
1．Companies (employees in charge of HR/recruitment)
■ Approx. 50% of companies (employees in charge of HR/recruitment) are aware of the obligation to provide employment opportunities for workers up to the age of 70.
■ 39% of foreign capital companies and 51% of Japanese companies responded that they felt positive about the implementation of the obligation to provide employment opportunities for workers up to the age of 70.
■ The most common reason why companies were positive was because they believed it was necessary to provide employment opportunities to workers who were motivated to work regardless of age. The most common reason why they were negative was because the tasks that could be assigned to older workers were limited because of physical strength.
■ The largest percentage of companies responded that they were going to introduce a continued employment system for workers up to the age of 70 from April 2021. Some foreign capital companies have already introduced a system.
2．Registered users of career change support services
■ Approx. 30% of registered users of career change support services were aware of the obligation to provide employment opportunities for workers up to the age of 70.
■ Approx. 60% of respondents were positive about the implementation of the obligation to provide employment opportunities for workers up to the age of 70. Older respondents tended to be more positive.
■ The most common reason why respondents were positive about the change was because they want to keep working as long as they were healthy and energetic. The most common reason why foreign capital company employees were negative was because they did not want to work up to the age of 70. The most common reason why Japanese company employees were negative was because they thought it was necessary to develop work environments and laws so that workers did not need to work up to the age of 70.
■ The largest percentage of respondents want to have the same type of job and position in the same workplace after the age of 61.
[Comments on the results]
Vijay Deol, President&Representative Director
Japan has a unique dynamic when it comes to the need for people to remain in the workforce longer. Not only does Japan have one of, if not the most talent short market in the world, it also has one of the longest living and healthiest populations in the world. This combination of factors makes it more necessary than probably any other country to create an environment where people can continue to add value to the workforce longer than was traditionally common.
At en world, we are constantly meeting candidates over 60 years old who are not only healthy, active, and sharp of mind, but are eager to apply their skills and knowledge to companies that can benefit immensely from their vast experience. In some cases, older workers may be capable and willing to work as full time permanent employees, but there are also a lot of opportunities for companies and workers to look at more creative and flexible working arrangements that allows older workers to continue to add value but in more cost-effective ways for companies. For these reasons it’s no surprise that the responses to our recent survey show a majority of businesses becoming more opening and favorable to utilizing older workers beyond the age of 60.
Details of survey results
(1)Responses from companies (employees in charge of HR/recruitment)
1. Approx. 50% of companies (employees in charge of HR/recruitment) are aware of the obligation to provide employment opportunities for workers up to the age of 70. (Fig. 1)
When asked whether they were aware of the obligation to provide employment opportunities for workers up to the age of 70 under the revised Act on Stabilization of Employment of Elderly Persons (scheduled to be enforced in April 2021), approx. 50% of companies (employees in charge of HR/recruitment) responded that they were aware of the requirement (foreign capital companies: 55%, Japanese companies: 51%).
[Fig. 1] Are you aware of the obligation to provide employment opportunities for workers up to the age of 70 under the revised Act on Stabilization of Employment of Elderly Persons?
2. 39% of foreign capital companies and 51% of Japanese companies responded that they felt positive about the implementation of the obligation to provide employment opportunities for workers up to the age of 70. (Fig. 2)
We asked companies how they felt about the obligation to provide employment opportunities for workers up to the age of 70, and approx. 40% of foreign capital companies and approx. 50% of Japanese companies responded that they felt positive about the requirement. The percentage of Japanese companies feeling positive about it was higher than that of foreign capital companies by 12 points (foreign capital companies: 39%, Japanese companies: 51%).
[Fig. 2] How do you feel about the obligation to provide employment opportunities for people up to the age of 70?
3. The most common reason why companies were positive was because they believed it was necessary to provide employment opportunities to workers who were motivated to work regardless of age. The most common reason why they were negative was because the tasks that could be assigned to older workers were limited because of physical strength. (Fig. 3, Fig. 4)
We asked companies why they felt positive. The most common reason was because both foreign capital and Japanese companies believed it was necessary to provide employment opportunities to workers who are motivated to work regardless of age (foreign capital companies: 75%, Japanese companies: 80%). The second most common reason for foreign capital companies was because they wanted excellent, skilled workers to work longer (foreign capital companies: 57%, Japanese companies: 50%), and the second most common reason for Japanese companies was because they believed Japan needed to supplement its labor force to solve its labor shortage (foreign capital companies: 60%, Japanese companies: 46%).
We asked companies why they felt negative about the obligation. The largest percentage of both foreign capital and Japanese companies responded that tasks that could be assigned to older workers were limited because of physical strength (foreign capital companies: 60%, Japanese companies: 56%). The second largest percentage of foreign capital companies responded that old customs would remain unchanged and prevent companies from innovating (foreign capital companies: 52%, Japanese companies: 22%). The second largest percentage of Japanese companies responded that younger workers could absorb new technologies and knowledge faster (foreign capital companies: 20%, Japanese companies: 33%).
The most common response from foreign capital companies in the “Other” category was fewer positions and employment opportunities for younger workers. This response was typical of foreign capital companies because they cut employees at the direction of their headquarters. Responses from Japanese companies included “people should take it easy when they get old” and “it will be difficult for them to continue their current jobs unless new positions are created.”
[Fig. 3] Please respond if you feel positive about the obligation to provide employment opportunities for workers up to the age of 70. Why do you feel that way? (Multiple answers allowed)
[Fig. 4] Please respond if you feel negative about the obligation to provide employment opportunities for workers up to the age of 70. Why do you feel that way? (Multiple answers allowed)
▶Responses included in “other” (Open-ended)
・It will prevent companies from employing younger workers because their headcount is limited. (Foreign capital company)
・It is necessary to develop new types of jobs. It is impossible to assign current tasks to elderly workers with no change. (Japanese company)
4. The largest percentage of companies responded that they were going to introduce a continued employment system for workers up to the age of 70 from April 2021. Some foreign capital companies have already introduced a system.(Fig. 5, Fig. 6)
When asked what measures they were implementing based on the Act on Stabilization of Employment of Elderly Persons, the largest percentage of both foreign capital and Japanese companies chose the introduction of a continued employment system for people up to the age of 65. (Foreign capital companies: 65%, Japanese companies: 71%)
When asked what measures would they implement to provide employment opportunities for workers up to the age of 70 from April 2021, approx. 60% of companies responded that they had not considered what to do yet. The largest percentage of companies considering what to do chose the introduction of a continued employment system for workers up to the age of 70. (Foreign capital companies: 23%, Japanese companies: 29%) The reasons why those companies chose that option are shown below. Several foreign capital companies have already incorporated the system into their employment regulations, which shows their conscious efforts for the continued employment of skilled human resources.
[Fig. 5] What measures are you currently implementing based on the Act on Stabilization of Employment of Elderly Persons?
[Fig. 6] What measures will you implement to provide employment opportunities for people up to the age of 70 from April 2021?
▶ Reasons why companies chose the introduction of a continued employment system for workers up to the age of 70 (Open-ended)
・Because some employees want to retire early, extending the mandatory retirement age to 70 would limit their options. (Foreign capital company)
・We already offer continued employment after the mandatory retirement age (65 years old) based on contracts. (Foreign capital company)
・We have already incorporated the system into our employment regulations. (Foreign capital company)
・It is impossible to extend the mandatory retirement age for everyone because people age differently. (Japanese company)
(2)Responses from registered users of career change support services
5. Approx. 30% of registered users of career change support services were aware of the obligation to provide employment opportunities for workers up to the age of 70. (Fig. 7, Fig. 8)
When asked whether they were aware of the obligation to provide employment opportunities for workers up to the age of 70 under the revised Act on Stabilization of Employment of Elderly Persons (scheduled to be enforced in April 2021), approx. 30% of registered users of career change support services responded that they were aware of the obligation (foreign capital company employees: 32%, Japanese company employees: 31%), which was lower than the percentage of companies that were aware (50%). (See Fig. 1, Page 2)
[Fig. 7] Are you aware of the obligation to provide employment opportunities for workers up to the age of 70 under the revised Act on Stabilization of Employment of Elderly Persons? (Registered users of career change support services/foreign capital company employees)
[Fig. 8] Are you aware of the obligation to provide employment opportunities for workers up to the age of 70 under the revised Act on Stabilization of Employment of Elderly Persons? (Registered users of career change support services/Japanese company employees)
6. Approx. 60% of respondents were positive about the implementation of the obligation to provide employment opportunities for workers up to the age of 70. Older respondents tended to be more positive. (Fig. 9, Fig. 10)
We asked registered users of career change support services how they felt about the obligation to provide employment opportunities for workers up to the age of 70, and approx. 60% felt positive about it (foreign capital company employees: 61%, Japanese company employees: 57%). The percentages of foreign capital company employees and Japanese company employees feeling positive were higher than that of companies by 22 points and 6 points, respectively. (Responses from companies/ foreign capital companies: 39%, Japanese companies: 51%, see Fig. 2, Page 2)
Registered users of career change support services were more positive than companies, and they appeared to have high hopes for the enforcement of the revised act. Older respondents felt more positive about the change.
[Fig. 9] How do you feel about the obligation to provide employment opportunities for workers up to the age of 70 ? (Registered users of career change support services/foreign capital company employees)
[Fig. 10] How do you feel about the obligation to provide employment opportunities for workers up to the age of 70 ? (Registered users of career change support services/Japanese companyemployees)
7. The most common reason why respondents were positive about the change was because they want to keep working as long as they were healthy and energetic. The most common reason why foreign capital company employees were negative was because they did not want to work up to the age of 70. The most common reason why Japanese company employees were negative was because they thought it was necessary to develop work environments and laws so that workers did not need to work up to the age of 70. (Fig. 11, Fig. 12)
We asked registered users of career change support services why they felt positive. Approx. 70% responded that they wanted to keep working as long as they were healthy and energetic. (Foreign capital company employees: 69%, Japanese company employees: 68%) Then we asked respondents why they felt negative. The largest percentage of foreign capital company employees responded that they did not want to work up to the age of 70 (foreign capital company employees: 62%, Japanese company employees: 51%), and the largest percentage of Japanese company employees responded that it was necessary to develop work environments and laws so that workers did not need to work up to the age of 70 (foreign capital company employees: 61%, Japanese company employees: 56%). Common responses in “Other” included “fewer positions and employment opportunities for young workers”, “concerns about physical strength” and “concerns about a decline in performance and a resulting decline in companies’ competitiveness.”
[Fig. 11] Please respond if you feel positive about the obligation to provide employment opportunities for workers up to the age of 70. Why do you feel that way? (Multiple answers allowed)
[Fig. 12] Please respond if you feel negative about the obligation to provide employment opportunities for workers up to the age of 70. Why do you feel that way? (Multiple answers allowed)
▶Responses included in “other” (Open-ended)
・It deprives young workers of employment opportunities. We need to be more flexible about employment. (Foreign capital company employee)
・There are concerns about the burden on companies. There will be a decline in competitiveness. (Foreign capital company employee)
・Because it ignores the fact that people expect to retire at the mandatory retirement age and spend their golden years using their retirement allowance, it is necessary to change the system drastically. (Japanese company employees)
8. The largest percentage of respondents want to work in the same workplace, type of job, and position after the age of 61. (Fig. 13, Fig. 14)
When asked up to what age they wanted to keep working, approx. 80% of registered users of career change support services want to keep working after the age of 61 (foreign capital company employees: 78%, Japanese company employees: 80%). While the revised Act on Stabilization of Employment of Elderly Persons scheduled to be enforced in April 2021 will oblige companies to provide employment opportunities for workers aged 66 and older, approx. 50% of respondents want to keep working after the age of 66 (foreign capital company employees: 54%, Japanese company employees: 55%).
When asked how they wanted to work when older than 60 years of age, the largest percentage of respondents wanted to work in the same workplace, type of job, and position they had had until the age of 60. (Foreign capital company employees: 29%, Japanese company employees: 30%) Common reasons for wanting to work in the same workplace, type of job, and position they had until the age of 60 include “I make a high degree of contribution in the current position,” “concerns about change,” “our ability will not suddenly decline,” and “want to maintain the current level of income.”
[Fig. 13] Up to what age do you want to keep working?
[Fig. 14] Please respond if you want to keep working after the age of 61. How do you want to work when you are over 60 years old?
▶Reasons why respondents want to be in the same workplace, type of job, and position they had until the age of 60 (Open-ended)
・It will be hard to change a work environment suddenly at an old age. (Foreign capital company, 40s)
・In order to maintain my motivation. (Foreign capital company, 50s)
・I believe I still can contribute to the development of team members with my skills and experience.(Foreign capital company, 50s)
・I want to advance my career forever. (Japanese company, 40s)
・I believe it is an environment where I can contribute the most. (Japanese company, 40s)
・My skills, abilities, and motivation will not suddenly decline. (Japanese company, 50s)
・I want to secure a steady income. (Japanese company, 50s)
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[Outline of the survey]
Survey method: Online survey
Period: March 26- March 30, 2020
Number of valid answers: 113 companies
1,275 registered users of career change support services
Respondent attribute: Companies/Foreign companies: 65%, Japanese companies: 35%
Registered users of career change support services/Foreign capital company employees: 46％, Japanese company employees: 54％
Age: 20s: 7%, 30s: 27%, 40s: 41%, 50s: 23%, 60 years old and older: 2%
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The attitude survey on the labor force participation by the elderly
About en world Japan (https://www.enworld.com/)
en world Japan is a staffing firm established in 1999 specializing in global human resources with offices in four countries in the Asia-Pacific region. We specialize in supporting Foreign Capital Companies and global Japanese companies in recruiting human resources for middle to high level positions. We help companies with recruitment and job seekers with career changes from every angle by staffing full-time workers, professional human resources, and executive human resources and providing recruitment process outsourcing solutions.
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