Growing Mismatch in the Job Market in Japan for Q2 2016

August 4, 20168:12 am440 views

Summarizing data announced by the Ministry of Health, Labour and Welfare for each quarter in 2016, Robert Walters drew upon the findings to calculate an effective job opening to applicant ratio as on July 29, was 1.37, a 0.01 point rise when compared to the previous month.

The average ratio for the three-month period from April to June was 1.36. In April, the effective job-opening-to-applicant ratio by place of work exceeded 1.0 for all prefectures for the first time since the calculation of the job-opening-to-application ratio commenced.

With the tight labour conditions amidst a continuing labour shortage in Q2 of 2016, demand was prominent in areas such as the accommodation industry, food and beverage service industry (18.0% increase), construction industry (7.4% increase) and the medical and welfare industry (7.3% increase).

Companies that encountered difficulties in hiring fresh graduates have made the shift towards recruiting currently unemployed recent graduates with work experience, as well as experienced “ready-made” mid- to senior-level recruits.

This shift is believed to have helped spur demand for human resources in the job-movers’ market. The effective job-opening-to-applicant ratio for career jobs has also continued to rise (0.88), and demand for human resources for career jobs in professional and technical occupations in particular is on a growing trend.

Among the job categories, there is also increasing demand for professional and technical positions including construction/civil/surveying engineers (A ratio of 3.96), and information processing/communications engineers (2.29) IT specialists are required across a broad spectrum of industries, and personnel requests received by Robert Walters Japan reflect growing demand for experienced security and data specialists, as well as web engineers and digital marketing personnel.

The effective job-opening-to-applicant ratio has also remained high for sales jobs. The service sector is experiencing a continued labour shortage for jobs such as hospitality/wait staff (3.43).

See: Strong Hiring Demand for Capable IT Professionals in Japan

David Swan, Managing Director of Robert Walters Japan comments: “While job-opening-to-applicant ratio is on the rise in the professional and technical sectors, the low ratio for all administrative jobs including general administration, which is a “high volume zone,” stands out, marking a growing mismatch in the job market.”

“However, even for workers in such sectors, inquiries have continued to pour in for bilingual professionals who are proficient in both Japanese and a foreign language such as English; the number of job openings exceeds the number of applicants in this aspect, demonstrating a market that favours job-seekers.”

While orders have continued to pour in from the construction industry based on Olympics-related demand in anticipation of the 2020 Olympics, the labour shortage problem is worsening. The job-opening-to-applicant ratio remains high across all job categories in the construction and mining sectors, including construction work for building frames (6.85).

On the other hand, overall demand has remained low for administrative jobs such as general administration (0.28) and accounting-related administration (0.63). This is because demand for such personnel is on the decline amidst the growing trend of substituting human labour with machinery and systems for monotonous and simple tasks.

Swan later added: “Despite concerns for the impact of the withdrawal of the United Kingdom from the European Union and market sentiment toward further yen appreciation among other issues, the job market is expected to continue booming on the back of positive factors such as Olympics-related demand and the increase in the number of foreign tourists to Japan. Demand for bilingual professionals with specific skills is also continuing to increase regardless of the industry or job category, making it even more difficult for corporations to secure this kind of talent.”

 Also read: Japan’s jobless rate hit 21-year low of 3.1% in June

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