Japan is now positioned as one of the world’s most promising equity markets through 2030. While foreign investment has historically played a small role in the country’s economy, this opportunity has sparked a surge of Western capital. Berkshire Hathaway, for example, increased its stake in five Japanese trading houses by 70%.
Last fall, Jefferies’ Equity Research Team published From Lost Decade to Golden Age: A New Paradigm for Japan Inc., highlighting investment opportunities emerging from Japan’s ambitious economic reforms.
For new entrants, understanding Japan’s unique economic and professional landscape is essential. Jefferies’ latest Human Capital Survey, which compares attitudes in the Japanese labor force to those in the U.S. and U.K., provides valuable insights.
Here’s what the survey revealed about Japan’s labor force in 2024—and what it means for investors.
- Quitting: Just 22% of Japanese respondents are considering quitting in the next six months, compared to 42% in the UK and 45% in the U.S. This aligns with research showing that Japan’s HR policies—steep seniority-earning profiles, extensive fringe benefits, participatory management, and reluctance to hire experienced workers from other firms—result in low turnover rates..
- Remote Work: 28% of Japanese respondents prefer to work five days in the office, compared to 22% in the U.S. and 14% in the UK. Additionally, 56% of full-time employees in Japan are required to work in the office five days a week, a higher percentage than in both the U.S. and UK.
- Four-Day Workweek: Only 69% of Japanese employees support a four-day workweek, compared to 87% in the U.S. and UK. Among the 63,000 Panasonic Holdings employees eligible for a four-day workweek pilot, only 150 opted in.
- Burnout: Just 31% of Japanese employees report experiencing burnout, compared to over 70% in the U.S. and UK.
- Employee Recommendation: When asked how likely they would recommend their company as a workplace (on a 1-10 scale), 70% of Japanese workers rated it 0-6, and only 10% gave it a 9-10. In comparison, 31% of U.S. workers and 38% of UK workers gave a 0-6 rating. Japan’s employee Net Promoter Score remains deeply negative.
- ChatGPT Use: Just 52% of office workers in Japan have used ChatGPT, compared to 79% in the U.S. and 80% in the UK. Concerns about automation are also lower in Japan than in the other countries.
- Upskill & Reskill: Only 67% of Japanese workers would explore skill development due to concerns about automation, compared to 84% in the U.S. and 86% in the UK. Notably, 35% of U.S. respondents would consider higher education for reskilling, versus just 14% in Japan.
For years, Jefferies has analyzed the human capital strategies of American and European companies, finding a significant link to corporate performance (see Human Capital Stocks and Europe’s Human Capital Stocks). As investment opportunities in Japan expand, insights from this latest survey may reveal where opportunities and risks lie.
Overall, the survey reveals that Japanese employees are less likely to quit than their American and British counterparts, for a range of reasons. As a result, employee engagement—and its impact on productivity—is the most material issue for Japanese companies today.
While the U.S. SEC has been slow to require human capital disclosures, Japan is moving forward with mandatory reporting on key areas, including: (1) succession plans for critical roles, (2) management remuneration ratios, (3) director skills matrices, and (4) initiatives to promote women, foreign nationals, and mid-career hires into middle-management positions.
These measures signal a shift in corporate transparency, offering both new and seasoned investors insights into the workforce dynamics that will shape Japan’s economic future.
For continued insights on human capital management and more, stay connected to Jefferies’ Sustainability & Transition Team.
