Throughout much of the 20th century, many larger companies in Japan offered essentially lifetime employment security.

This system started in the early 1900s to counter frequent job changes as people looked to improve their income and working conditions. In an attempt to keep their employees, some companies started introducing pay-raise and pension systems.

Soon after World War II, there was a significant labor shortage, which gave a real boost to the concept of lifetime employment, especially among large companies and during the decades of the 1960s through about 1990 the lifetime employment system took hold nationwide. The basic premise is that since the company guarantees its employees a salary until retirement the employees can concentrate on their work knowing that they and their company share a common fate.

Knowing that the company’s success more or less insures their success creates strong company loyalty. Most companies hire new employees in a once-a-year recruitment drive at which time students about to graduate are interviewed and tested, then hired. Job seekers are often hired more for their character and academic background rather than for their professional skills.

Moreover, they are usually not hired by a specific department for a specific job, but by the company for a wide range of work. Once hired, the new employees are trained for a job which they will hold for a few years before being reassigned and retrained. This is thought to provide employees with broad generalist experience and a broad knowledge of how the company functions so that they will have this knowledge when they are eventually promoted to a supervisory position.

However, after Japan’s economic bubble burst in the early 1990s and, this along with a significant decline in the birthrate and an extended period of stagnant economic growth, continuing to provide lifetime employment became increasingly difficult for companies. But, some younger people saw this as a good thing.

With lifelong employment, promotion was almost always based on seniority and some younger, well-qualified employees saw the erosion of the system as perhaps good for them. It has also benefited foreigners in Japan. With the lifetime employment system, new employees were almost always hired at the time of their graduation, therefore it was difficult for foreigners to find anything other than part time employment with a Japanese company but that has been changing in recent years.

With lifetime employment, people perhaps had a greater fondness and a deeper loyalty to their company and this may be eroding. In the mid-1970s I went with my wife Kayo’s brother, Kozaburo, to visit the company which employed him, Nippon Shinyaku.

The company was a pharmaceutical firm which had what used to be called an industrial semiprofessional sports team much like the former Phillips 66 Oilers or the Peoria Caterpillars in this country.

Kozaburo was not an office worker, he was a pitcher for the company’s baseball team, but that day we went to the company’s main office building. The day started with everyone gathering in an open space outside the building where the president made a short speech thanking the employees for their dedication and hard work and encouraging them to continue that pattern, then everyone engaged in a short time of exercise or calisthenics, sang the company song and engaged in other activities.

This was certainly not a daily activity, but it did take place a few times during the year. Loyalty by the company and to the company was quite strong. The employment system is changing but change comes very slowly.

Recommended for you