"Raise Starting Salary for College Graduates to '2.89 Million Won'... Japanese Major Companies Engage in Talent War"

Major Japanese corporations have started offering a starting annual salary of "300,000 yen (approximately 2.89 million KRW)" for new university graduate hires. This move to significantly raise starting salaries aims to secure talented personnel amid a labor shortage.

Street scene in Tokyo, Japan. Photo by Yonhap News

On the 27th, the Yomiuri Shimbun reported that housing construction company Daiwa House plans to increase the starting monthly salary for university graduates from 250,000 yen (approximately 2.41 million KRW) to 350,000 yen (approximately 3.37 million KRW), a 40% raise this year. Fast Retailing, famous for its clothing brand Uniqlo, also announced it will raise the starting monthly salary for university graduates from 300,000 yen to 330,000 yen (approximately 3.18 million KRW) starting in March.

Starting salaries for university graduates in Japan had remained almost unchanged for a while due to the economic stagnation symbolized by the "Lost 30 Years," but in recent years, they have been rising sharply amid a trend of wage increases by major corporations.

According to a survey by Nihon Keizai Shimbun (Nikkei), the average starting salary at major companies for 2024 is about 240,800 yen (approximately 2.32 million KRW), up 8.8% from 2021, surpassing the average wage increase rate for workers (7.4%) by 1.4 percentage points.

Buoyed by this, some major corporations have entered the 300,000 yen starting salary range for the first time this year. The trend of raising starting salaries for university graduates is said to have accelerated since 2022. Nikkei reported that this is due to intensified competition for talent with high-paying general trading companies and consulting firms, prompting companies to improve compensation quickly.

However, the "300,000 yen starting salary" has not yet become widespread in the Japanese university graduate recruitment market. Mitsui Chemicals, a well-known major corporation, decided to raise wages for university graduate hires (general positions) by 9.4% from April this year, but the increased starting salary is 280,000 yen (approximately 2.7 million KRW). However, the starting salary for those who have completed a master's program is 302,000 yen (approximately 2.91 million KRW), entering the 300,000 yen range for the first time.

Mitsui Sumitomo Bank plans to raise the starting salary for university graduate hires joining in April this year from the current 255,000 yen (approximately 2.46 million KRW) to 300,000 yen. The bank has set the highest annual salary for managerial positions at around 30 million yen (approximately 290 million KRW) and intends to allow employees with specialized knowledge to receive treatment similar to department managers or group leaders, even if they are not in managerial positions.

Nikkei explained that this will be a turning point for the spread of job-based salary systems in large financial institutions that have maintained traditional Japanese employment practices.