"Abolishing Retirement Due to Labor Shortages"... The Growing Choice Among Japanese Companies

Shionogi & Co., a listed Japanese pharmaceutical company, has decided to introduce a system that employs individuals aged 65 and older as regular full-time employees.

It is unusual in Japan for a listed company to continue employing workers over the age of 65 as regular employees rather than on a contract basis.

This is interpreted as a desperate measure to maintain competitiveness amid an acute labor shortage.

According to the Nihon Keizai Shimbun (Nikkei) today (the 19th), Shionogi plans to raise its retirement age from the current 60 to 65 starting next year, while also allowing workers over 65 to work as regular employees if they meet certain requirements.

Previously, the company re-employed retired workers as temporary contract workers. Moving forward, it will continue to employ workers as regular staff even after age 65, deciding on continued employment each year if the employee wishes to extend their term and the company determines they are capable of performing the duties.

Since the affected employees have not yet reached retirement age, it is expected to take about five years before regular employees past the age of 65 actually emerge.

Isao Teshirogi, president of the company, explained, "For those who have the will and ability to continue working and whom the company needs, we pondered how to enable them to continue contributing to the company."

Since 2012, Japan has mandated that companies guarantee employment opportunities for workers up to the age of 65 who wish to work.

Additionally, in 2021, the country legislated that companies should make efforts to guarantee worker employment opportunities up to the age of 70.

While this has led to an increase in elderly people working, they have frequently been re-employed by companies after reaching the retirement age of 60 on contract positions with relatively poor compensation and treatment.

According to the Ministry of Health, Labour and Welfare, 62.2% of all companies set their retirement age at 60 last year, while only 3.9% had abolished the retirement age system.

Last year, the number of employed people aged 65 and older reached a record high of 9.43 million, but excluding executives, 76.1% of them were non-regular workers.

Amid this situation, cases like Shionogi providing older workers with treatment comparable to other employees are increasing.

Construction company Daiwa House introduced a system last year allowing employees to continue working until age 67 if they wish, even though its retirement age is 65.

Even when working until age 67, there are no changes to compensation, such as salary or bonuses.

Confectionery company Calbee established a "Senior Meister" position, allowing seniors with specialized knowledge or skilled techniques past the retirement age of 60 to continue working while maintaining the same compensation they received at retirement.

Home improvement retailer Cains introduced a system this year that maintains compensation structures, such as salaries, even after age 60 when delaying its retirement age from 60 to 65.

Hitachi, Ltd., one of Japan's representative major corporations, has also decided not to cut the pay of "senior employees" re-employed after retirement if they perform the same duties as active-duty workers.

Nikkei emphasized that senior talent is gaining prominence in a labor market facing severe shortages, noting that human resource systems evaluating and compensating individuals based on job duties and performance rather than age, while securing experienced talent, will determine a company's competitiveness.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.