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Japan immigration

Small businesses see savior in Japan's blue-collar labor influx

Understaffed companies ready to welcome Asian workers in greater numbers

Foreign workers have labored for years in Japanese factories under a skills training program. (Photo by Ken Kobayashi)

TOKYO -- As Japan prepares to accept foreign blue-collar workers in greater numbers than ever, small and midsize businesses are looking to the new visa rules taking effect Monday for relief from a labor shortage that has hit them especially hard.

Japan expects as many as 345,150 applicants for two new visa categories through 2023, many of them from other Asian countries. Staffing companies are preparing to offer consultancy services for workplaces accepting these foreign employees.

Foreign workers have labored for years in Japanese factories and farm fields under a government-sponsored skills training program that has become a backdoor supplement for small businesses.

But this system places many restrictions on both the workers and their employers, prompting calls for reform. The program also has been plagued by violations of employee rights such as overly long hours.

"We expect foreign workers to learn multiple skills of production under the new visa system," said Kaname Oshima, senior managing director of sheet metal processor Oshima, based in the western prefecture of Hyogo.

The company has hired over 30 trainees in the past 15 years from Vietnam, where it also operates a factory.

But the trainee program's official goal has been to transfer skills to developing countries. The system also has lacked flexibility. It does not permit the company to let trainees work on simple tasks like detaching metals, even though the process is required to make sheets.

Though the metal company "still needs to rely on trainees," Oshima said it seeks to hire workers through the visa program to relieve its serious labor shortage.

A construction company in Tokyo has accepted more than 40 trainees from Vietnam since 2015.

"They have played a significant role in supplying the workforce," said a personnel management officer. The company is considering hiring more foreign workers under the new visa system.

The new law accepts foreign workers as regular employees in 14 fields including industrial machinery, construction and elder care. Applicants must demonstrate the requisite technical skills and a good command of Japanese, and most of the applicants are expected to be those who completed the existing trainee program in Japan. They will be issued visas to work for up to five years.

Permanent residency, including for their families, will be open to those with higher skill levels. Construction and the shipbuilding and marine industry are the only fields targeted for the scheme at present.

"We will first see a mass of trainees transferring to the five-year new visa, as well as 'returners' who already went back to their home country after the trainee program," said Kazuhisa Kikuchi, president of staffing consultancy A-FiveStar.

Prime Minister Shinzo Abe and his administration regard the new visa system as a first step toward solving Japan's labor shortage, said Kikuchi, who sees them "probably easing more regulations in the future to accept more workers."

Labor shortages represent a serious problem for the country's small and midsize companies, which make up 99.7% of all companies in Japan. Understaffing rates total 3.2% of jobs for manufacturing workplaces with five to 29 employees, and 3.5% for nonmanufacturers of the same size, the government's Small and Medium Enterprise Agency says.

These rates are considerably higher than for companies with more than 1,000 employees, which stand at 0.4% for manufacturing and 1.6% for nonmanufacturing sectors.

Many small companies now seek to attract foreign employees as the nation's labor shortage intensifies. Small and midsize companies represent 80% of workplaces that welcome trainees, Kikuchi said. The number of foreign workers continues rising, reaching a record 1.46 million in October for a 14.2% increase from the previous year.

Some staffing agencies see opportunities among Japanese companies desperate to secure a labor force.

Pasona Group, one of Japan's large agencies, will begin providing services Monday to companies that seek to hire foreign workers for long-term posts.

The agency will support such employees for six months, from their entry into the country to settling at their workplace and home, by contacting legal specialists for visa admission or helping them move. Pasona has offices in 15 countries including Vietnam, Indonesia and Malaysia, building a network of individuals who could fit in at Japanese companies.

The company aims to serve 500 companies in the first three years.

"Our target includes not only large but also small and midsize companies outside of big cities, which face serious labor shortages," said Yoshihisa Tani, Pasona's managing executive officer. "This would cost us a lot, but at the same time it is clear that measures are needed for these companies before it becomes impossible for them to recruit employees."

Persol Holdings also is considering a similar "personnel management service for foreign workers," said a spokesperson for the staffing agency.

These care services are expected to improve the lives of foreign workers in Japan. The lack of such aid for foreign trainees has sparked criticism nationwide.

The technical trainee program produced many instances of overwork, unpaid wages and abuse. Some supervising bodies licensed by the government to help trainees with everyday issues have proved ineffective in dealing with these problems.

More than 28,000 trainees went missing between 2012 and 2017, highlighting another shortcoming with that program. Trainees could stay in Japan for three to five years. But this short duration means the trainees must leave just when they have learned the language and developed technical skills.

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