Japan, the country with the fastest aging population globally, is facing a severe talent shortage crisis. To address this issue, the Japanese financial industry is implementing measures such as raising salaries and improving benefits to attract retired employees back to the workforce, leveraging their rich experience and skills to navigate the rapidly changing market environment.
Traditionally, Japanese employees who returned to work after retiring at age 60 often faced significant salary cuts and reduced responsibilities. However, the situation has evolved. To retain valuable senior talent, an increasing number of companies are introducing performance-based compensation systems and assigning older employees roles that match their expertise.
Japan's financial industry employs workers aged 60 and above, increasing from less than 5% in the past to 14%, setting a new record. (Photo / Sourced from Pexels)
Leading financial institution Mitsubishi UFJ Financial Group (MUFG) plans to offer a pay increase of up to 40% for rehired employees after retirement at 60. Over the past two years, Daiwa Securities has raised the average salaries of senior employees aged 60 and above by 15%. Similarly, Sumitomo Mitsui Financial Group’s securities division has adjusted salary levels for older employees upward for two consecutive years.
According to data from Japan’s Ministry of Internal Affairs and Communications from 2003 to 2023, the proportion of employees aged 60 and above in the financial sector has risen from under 5% to 14%, a record high. In contrast, the percentage of employees aged 20 to 34 has dropped from approximately 40% to below 30%.
Why does Japan's financial industry place such importance on senior employees? One key reason is their experience during the era of high interest rates and a booming bond market—insights that younger generations often lack. Nomura Holdings noted that in the current interest rate environment, the diverse experience and skills of employees aged 60 and above provide valuable practical perspectives.
In 2023, Japan's total fertility rate was 1.20, with Tokyo's fertility rate even lower at only 0.99. (Image source: Pexels)
According to the latest data from Japan’s Ministry of Health, Labour, and Welfare, in 2023, Japanese women had an average life expectancy of 87.14 years, maintaining their world-leading position for the 39th consecutive year. Japanese men had an average life expectancy of 81.09 years. However, the birthrate has been declining since 2016, with Japan's total fertility rate at 1.20 in 2023, and Tokyo's birthrate at just 0.99—on average, women in Tokyo have fewer than one child.
Faced with the realities of declining birthrates and an aging population, the Japanese government is actively promoting policies to extend the retirement age. Companies are also adjusting human resources strategies to maximize the shining value of their senior workforce.
