TOKYO Tokyo's central business district was the scene of an annual ritual on the morning of June 1, the first "official" day of job interviews, as students clad in black suits streamed into the offices of big companies.
"I just got a job offer," said a 21-year-old student with a smile as he came out of the headquarters of Sumitomo Mitsui Banking. He said he received the offer after a brief chat lasting 10-15 minutes. "I didn't imagine it would be my final interview," he said. He had already met more than 10 employees of the bank for informal interviews starting in May.
Companies are desperate for new recruits as the labor market tightens. With the jobs-to-applicants ratio for new graduates at a nine-year high, and a wave of experienced workers retiring, Japan Inc. needs fresh talent to sustain its growth. That is forcing some companies to offer higher starting salaries. But some economists are skeptical that brighter prospects for young employees will translate into faster economic growth.
Japanese companies traditionally do their hiring once a year. For the big companies that comprise the Japan Business Federation, the nation's top business lobby, June 1 was the first day of interviews for those graduating in March 2018.
There is a reason this year's crop of young job-hunters are having an easy time of it: Japan's seasonally adjusted jobs-to-applicants ratio hit a 43-year high for the workforce as a whole in April. There were 1.48 jobs on offer for every job seeker. The unemployment rate remained low, at 2.8%.
WE WANT YOU The data underscores the country's labor shortage amid the aging of society and the declining population. April's ratio exceeds figures in the early 1990s, when Japan was experiencing the bubble economy.
The ratio for regular workers in April was 0.97, up 0.03 point from March, and marking a record high since the ministry started the survey in 2004. This shows that companies are offering more regular jobs to secure workers from a longer-term perspective.
The labor market looks especially favorable for graduates. According to a survey by human resources specialist Recruit Holdings, 423,200 university students graduating nationwide in March 2018 are looking for private-sector jobs. That compares with 755,100 open positions. The jobs-to-applicants ratio, at 1.78, is the highest since 2008 -- just before the impact of the global financial crisis -- when the figure for students graduating in March 2009 reached 2.14.
During the bubble economy of the late 1980s and early 1990s, the ratio exceeded 2.5.
BOOM WITH A TWIST But one expert said this year's hiring season differs from those of previous economic expansions.
"Companies don't want to miss their chance to hire new graduates now," said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities. As they struggle to deal with a flood of retirements, companies are looking to get their hiring out of the way as quickly as possible.
Trading house Itochu will hold its second round of job interviews on the same day as the first round this year, two days earlier than in years past. Nomura Securities will interview 10% more applicants each day than it did the previous year, aiming to wrap up its hiring 10 days sooner than last year.
More employers are offering sweeteners to this year's new hires, including higher starting salaries. Food and pharmaceutical company Ajinomoto offered white-collar workers hired in April a starting salary of 234,000 yen ($2,118) a month, 12% more than last year. Builders Kajima and Taisei raised starting wages after holding them steady last year. "We aim to lock down top talent by making compensation more enticing," a Taisei spokesman said.
But despite the tighter job market, salaries in Japan are barely rising. According to a government labor survey, the average monthly wage for companies with five or more employees was 278,677 yen in March, nearly unchanged from the previous year's 278,704 yen.
Hisashi Yamada, chief economist at Japan Research Institute, said that the problems lie in the lack of mobility in the country's labor market, as well as low productivity and the fact that many of the new workers are nonregular employees.
Companies' moves to raise pay for new grads may put upward pressure on wages across the labor market, which would help lift consumption and economic growth. But SMBC Nikko's Maruyama thinks this year's recruitment will not help the economy much. "Though starting salary levels have been increasing, employers are holding down wages for seniors. Seniors are [thus] reluctant to spend their money," he said.
Nikkei staff writer Kentaro Iwamoto contributed to this report.