Japan Data

Two in Three of Japan’s Small and Medium-Size Companies Face Labor Shortages


The labor shortage in Japan is particularly severe among small and medium-size companies.

More than Half of Companies Think Labor Shortage Will Get Worse

A fiscal 2019 survey on labor shortages among small and medium-size companies found that 66.4% face labor shortages, a 1.4-point rise over the previous year’s result.

In the fiscal 2015 survey, 50.3% of the companies surveyed had reported labor shortages, and that percentage has steadily increased in the four years since. The proportion of companies that had just the right number of workers has declined steadily over the past four years, to 31.5% in 2019, as compared to 45.5% in 2015.

When asked about the prospects for overcoming the labor shortage over the next three years or so, 52.1% of all surveyed companies said that they expected the labor shortage to get worse. That percentage was even higher, at 62.4%, among companies already facing a labor shortage, against the backdrop of Japan’s population decline and migration to larger urban areas.

Growing Shortages in Caregiving and Nursing

The hotel and restaurant sector faced the most severe labor shortage, with 81.8% of surveyed companies reporting that they lack staff, a 2.7-point rise over the previous year’s survey result. Labor shortages have surged recently in the nursing and caregiving sector, rising 11.2 points over the previous year’s survey, to 79.2%. Around 70% to 80% of companies in the transportation, construction, and telecommunication and information services industries also reported labor shortages.

Breakdown by Industry of Companies Facing Labor Shortages

Fiscal 2019 survey Fiscal 2018 survey
Hotels and restaurants 81.8% 79.1%
Caregiving and nursing 79.2% 68.0%
Transportation 78.2% 78.2%
Construction 75.4% 75.6%
Telecommunications and information services 72.7% 64.3%
Wholesale and retail 60.5% 57.8%
Manufacturing 57.7% 59.1%

Created by Nippon.com based on a survey from the Japan Chamber of Commerce and Industry and the Tokyo Chamber of Commerce and Industry.

The 2019 results revealed that the larger the size of the company surveyed, the more likely it is to be facing a labor shortage: 44.1% among companies with 5 or fewer employees, 64.7% among companies with 21 to 50 employees, and 77.3% among companies with 101 or more employees. 

Companies that reported a need to employ foreign staff, which includes both those who have hired and those that are considering or have plans to hire foreign staff, rose from 42.7% in the previous year’s survey to 50.8%.

(Translated from Japanese. Banner photo © p-bandits/Pixta.)

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