"Investing in People" Sony, Kirin, and Other Japanese Companies to Establish Council Next Month for Employee Retraining

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Major Japanese companies such as Sony Group and Kirin Holdings are set to establish a council next month that links employee retraining. With investment in people becoming the first task of Japanese Prime Minister Fumio Kishida's flagship economic policy, "New Capitalism," the Ministry of Economy, Trade and Industry and the Financial Services Agency are supporting the initiative, aiming for participation from over 100 companies.

According to the Nihon Keizai Shimbun on the 25th, companies participating in the council will first share and collaborate on examples of reskilling (retraining). They are also considering accepting mutual side jobs among participating companies and jointly developing retraining content. Additionally, they will discuss methods for disclosing information related to human investment. Plans include making various information public, such as employee development costs, the proportion of childcare leave, and gender wage gaps.

The reason Japanese companies are putting so much effort into workforce development by even creating such a council appears to be their judgment that the way to revive Japan's declining economic competitiveness lies in human resources. According to the Ministry of Health, Labour and Welfare, the ratio of Japanese companies' capability development expenses to gross domestic product (GDP) averaged 0.1% from 2010 to 2014. Considering that the U.S. and Europe have recorded 1-2% since the 1990s, this level is extremely insufficient.

Taking this into account, the Kishida Cabinet is focusing on workforce development in companies and is preparing economic policies accordingly. According to Nihon Keizai, the Kishida Cabinet plans to invest 400 billion yen over the next three years to support the skill development and reemployment of one million people, promote self-development among workers, facilitate labor mobility into growth sectors such as digital fields, encourage side jobs and multiple job holdings, and improve lifelong education environments. At the same time, Nihon Keizai reported that information disclosure on human capital by Japanese companies is expected to be actively implemented.

Nihon Keizai stated, "Retraining is essential for improving the growth potential of companies and employees," adding, "It is necessary to focus on relearning digital skills and others to create innovation within companies or to facilitate transitions to growth sectors. Companies are also required to properly evaluate performance and improve treatment."