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Japan is increasing the number of women in the workforce, but to reap the full economic benefits, it may need to make systemic changes.

Prompted by a growing talent shortage in Japan, Prime Minister Shinzo Abe is looking to tap into the talent resources of the country’s women, a relatively low proportion of whom have traditionally participated in the workforce. A subsection of his “Abenomics” initiatives, called "Womenomics”, focuses on making it easier for women to join or re-join the workforce. Measures include building more childcare facilities, as well as setting aside 800 billion yen to provide free day care.

Recent reports suggest that the Japanese government's efforts are starting to pay off. The Nikkei business daily reported in February that the rate of working women aged 30 to 34 rose to 75% last year, up from about 50% three decades ago. The workforce participation rate for women aged 15 to 64 exceeded 69% in 2017, the Nikkei said.

For their part, Japanese companies are making an effort to hire women who exited the workforce to raise children. Microsoft Japan offers a paid internship to help women prepare to return to work, with flexible schedules to help ease the transition. Sompo Japan, an insurer, said it will rehire women for positions similar to those they were in before they left, according to the Nikkei.

The benefits of including more women in the workforce are well-documented, both at the macro-economic and company level. Many studies have concluded that workforce diversity, specifically with regards to women, is profitable for companies in Japan and around the world. As Jesper Koll, head of ETF-provider WisdomTree Japan, told CNBC, companies with more female workers in senior management positions experience higher returns and greater productivity.

Measurable differences appear at the national level as well. “For every one percentage point in the (women's) participation rate, you are boosting Japanese GDP by about half a percentage point”, said Koll. While the Japanese economy is growing at a rate of about 1.5 to 2%, he explained, it would have grown only around 1 to 1.5%, had there been no improvement in women’s participation in the labour force.

Still, experts say that to fully realize the economic benefits of having more women in the labour force, Japanese companies need to do more to hire women and make the corporate culture better for them. This would include closing the gender pay gap, providing incentives for women to take more full-time and management positions in growth areas, and offering them paths for professional advancement.

Keiko Takegawa, Director General at Japan's Gender Equality Bureau, said the government needs to do more to invest in its aim of having more women in the workforce, to include passing laws and making companies abide by them. There are reasons for optimism. "As the government, we aim to promote full-time work for women and their moving up to managerial positions and corporate directors”, said Takegawa.

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