Mitsubishi UFJ Bank in Japan Struggling with Labor Shortage
Promises Up to 40% Salary Increase
Targeting 1,000 Former Regular Employees Rehired After Retirement
Mitsubishi UFJ Bank, Japan's largest city bank and ranked 9th worldwide in total bank assets this year, is attracting attention by offering unprecedented conditions to solve its labor shortage.
According to a report by Nihon Keizai Shimbun (Nikkei) on the 13th, Mitsubishi UFJ Bank will pay up to 40% higher salaries to employees rehired after mandatory retirement starting next year. It is known that about 1,000 former regular employees rehired at the age of 60 will be promised a five-day workweek and salary increases. As a result, senior employees receiving up to an annual salary of 10 million yen (approximately 94 million KRW) based on their active-duty pay are expected to emerge.
Currently, Mitsubishi UFJ Bank maintains reemployment through annual contracts after mandatory retirement, allowing employees to choose to work two to four days a week instead of five. Compared to their active-duty period, this has resulted in a 30-70% decrease in salary after reemployment, causing a decline in employees' motivation and productivity. Some employees have moved to other companies or quit work altogether rather than accept lower pay, exacerbating the labor shortage. In response, the bank proposed improving working conditions by guaranteeing reemployed staff the same duties as during their active service, such as branch management positions, and increasing their salaries. Nihon Keizai explained, "This is to improve the treatment of experienced employees and maintain personnel assigned to branches or administrative departments."
Mitsubishi UFJ Bank, one of Japan's three major megabanks, is the first in the industry to raise salaries for employees rehired after retirement. The industry expects this measure to expand throughout the financial sector. Earlier, the automobile company Suzuki introduced a new personnel system in May that maintains the base salary of reemployed employees at the active-duty level. GS Yuasa and Nihon Seiko are also working to adjust wages realistically by raising the base salaries of senior employees.
Meanwhile, the current Japanese employment market is reported to be suffering from an extreme labor shortage. In October last year, the "effective job openings-to-applicants ratio" (the number of jobs available per job seeker) recorded 1.25, rising for two consecutive months compared to the previous month. A high effective job openings-to-applicants ratio indicates that there are many jobs but few workers. Consequently, Japanese companies have shown movements to abolish or raise the retirement age, and the government implemented the revised Elderly Employment Stabilization Act in 2021, which mandates companies to provide employment opportunities up to the age of 70 as an effort obligation.
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