Japan’s Talent Mismatch is one of the Most Acute in Asia Pacific

September 26, 20168:31 am1093 views

Japan’s talent mismatch has once again been ranked one of the most acute in the Asia Pacific, according to the 2016 Hays Global Skills Index – Japan, which assesses the efficiency of skilled labour markets in 33 countries.

Japan received a score of 9.8 for ‘talent mismatch’ – a slight decline from last year’s highest possible score of 10, but is now positioned behind only the USA, Ireland, Portugal and Spain (all scored 10) for the severity of its talent gap.

“This shows that there is a significant gap between the skills that businesses are looking for and the skills available in the labour market,” says Marc Burrage, Managing Director of Hays in Japan.


The Hays Global Skills Index, produced in collaboration with Oxford Economics, ranks Japan 10th on the list of 33 countries, with an overall score of 6.0 in 2016, down from 6.1 in 2015. Seven indicators, or points of potential pressure, make up the ranking and each received a score out of 10. A score close to 0 indicates little to no pressure, while a score close to 10 shows severe pressure.

“Labour market reforms and initiatives of recent years are slowly leading Japan in the right direction, demonstrating improvements in overall ‘labour market participation’ particularly increased female participation in the workforce,” says Marc. “Yet, despite the slight reduction from the highest possible score of 10 last year to 9.8 this year, talent mismatch continues to be one of the key challenges in Japan.”

Japan’s high score for ‘wage pressure in high-skill occupations’ is also of concern at 7.1, a jump from last year’s score of 6.2. Wages are rising more quickly in high-skill than low-skill occupations relative to the past, which signals that high-skill occupations are experiencing shortages of talent.

See: Growing Mismatch in the Job Market in Japan for Q2 2016

“The consistently high talent mismatch in Japan attributes to wage pressure in high skill occupations, causing increasing unfilled job vacancies – a vicious cycle that continues to affect businesses and potential for the economy to grow,” Marc added.

“We continue to emphasise that salary increases are not necessarily the solution to alleviate skills shortages but further attention is required to address ongoing structural challenges.

Japan’s economy faces an improving macroeconomic environment, but a lack of openness to immigration, combined with a strong talent mismatch means that employers may face an increasingly difficult time filling posts.

“While the government continues to struggle to fix and revive the economy, competition for talent will remain fierce in this challenging labour market,” concludes Marc.

Japan’s job seekers are required to conduct critical research before securing a job that would offer them an opportunity to secure new skills and grow professionally in their careers. While salary is important, many employers are taking a cautious approach to hiring in 2016. Hence, it is important for candidates to not only manage their salary expectations but also look for benefits that add to their personal bottom line, over the long term.

Also read: 73% Employers in Japan Consider Recruiting Overseas Hires

Image credit: reuters.com

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