Priorities for the Japanese Economy in 2017 (January 2017)

"Sharing the Inconvenience" for the Sake of Work Style Reform

UENO Toru Consulting Fellow, RIETI

Japan is too convenient: Does that prevent it from achieving work style reform?

Most Japanese people including myself who have had the experience of living in North America or Europe probably feel that there is no country as convenient as Japan. In North America and Europe, it's quite common for shops to close on Sunday. In Japan, in contrast, convenience stores are open 24 hours a day, and quite a number of shops open on Sunday and even New Year's Day. Visitors from abroad are often surprised by how many salespeople are on duty in Japan's department stores and how attentive they are to customers. I recently went to London on business and was surprised to hear the story from an expat who rented a home near a tube station and was really inconvenienced when the station was temporarily closed for construction. In Japan, such construction is done late at night or on weekends to minimize the impact on passengers. Visitors to Japan are typically impressed by how the trains always arrive on time, down to the minute. Outside Japan, many Japanese people probably have felt the frustration of having maintenance workers not showing up at the appointed time. The big selling point of service in Japan is omotenashi, the spirit of hospitality. One could argue that Japanese service is among the best in the world. People accustomed to that level of service find it inconvenient to live elsewhere.

   

For the rapidly aging Japanese economy to grow, it is inevitable to improve productivity, especially that in the service sector, which is lower than others. Work style reform that will contribute to empowering women and raising productivity has been widely discussed. As a Japanese, I am proud of the convenience that makes day-to-day life so easy, but perhaps too much convenience is a factor that prevents work styles from changing. A similar argument was made at the Science Council of Japan-RIETI Policy Symposium "Diversity Management and Work Life Balance" held in March 2016. Department stores that open on New Year's Day are an example of too much convenience, since the practice discourages women from entering into the workforce. It was argued that it is essential for consumers to share the inconvenience in order to overcome the problem. Sharing of inconvenience is the key to successful work style reform.

Increasing overtime due to many factors that cannot be solved within the company

In order to help workers including women who are rearing children fulfil their potential in the labor market, it is necessary to eliminate overtime and make it easy to take leaves. Looking at the past five years, however, general workers' overtime work hours have been increasing even as official work hours have remained essentially unchanged. (According to the 2016 Ministry of Health, Labour and Welfare Analysis of Labour Economy, monthly official work hours rose slightly from 154.2 to 154.3 from 2011 to 2015, but monthly overtime work hours rose from 13.0 to 14.5 in the same period.) Japanese workers continue to take paid leaves at a lower rate than anywhere else: only 47.6% according to the FY2015 General Survey on Working Conditions. This is far below the government's target of 70% by 2020.

According to the 2015 Analysis of Labour Economy, in response to the reasons for overtime work hours, the highest ratio of respondents answered (starting from the very highest) that "work assignments fluctuate and tend to happen unexpectedly" (67.5%), "shortage of manpower" (53.0%), and "some work can't be done without overtime due to the nature of the work or the needs of customers" (49.0%). Although there were also a fair number of answers indicating management shortcomings on the company side (e.g., not enough personnel, uneven work assignments, uneven progress on work), the list was topped by factors beyond the company's control.

There have been a number of news reports lately on a leading Japanese company recognizing its employee's suicide as a work-related death. The company decided to turn off the lights in its headquarters after 10:00 p.m. as a way to prevent it from recurring, but there were comments made by its confused employees saying that "the workplace will never change unless our trading partners understand the situation" (Nihon Keizai Shimbun, November 1, 2016). It has been also reported that a large number of taxis wait at midnight for officials in the Kasumigaseki area who themselves wait to receive late-arriving inquiry notices from Diet members to whom they need to draft their responses. The problem of officials having to work overtime until midnight because of delayed inquiry notices from the Diet has been pointed out, and there has been some improvement. Even so, according to a survey by the Cabinet Secretariat's Cabinet Bureau of Personnel Affairs (June 16, 2016), the Diet finished issuing all inquiry notices at 8:41 p.m. and assignments of inquiries to the offices responsible for them were finalized at 10:40 p.m. on average in the April-May 2016 period.

Customer first

When the Japanese language absorbed the word "service," it took on the added meaning of "free of charge." Moreover, the expression "The customer is God" has long been popular. The tradition is to consider the consumer superior to the service provider. In North America and Europe, when a customer receives some service, say at a supermarket cash register or a restaurant or hotel, often the customer thanks the service provider. In Japan, many customers say nothing. They feel that since they paid, getting service for what they paid for is just a matter of course.

Looking at the business hours at retail shops, the number of shops that are opened 24 hours and the percentage of employees working in them are rising (from 1.1% in 1991 to 4.2% in 2007 and from 2.5% in 1991 to 11.0% in 2007 respectively according to the 2015 Analysis of Labour Economy). This is likely because of the growing number of convenience stores and the like. Convenience stores are highly evolved in Japan and so have become indispensable to people's lives. They are the result of a relentless pursuit of consumer convenience, but there arise issues of labor shortage at midnight.

Department stores that open on New Year's Day are another gift for consumer convenience, but when one famous department store decided to close on New Year's Day 2016, some of the long-established tenant retailers went to social media to post messages of appreciation for prioritizing their employees' working environment over a sales boost. Many positive comments were posted in reply. Others in the industry were envious.

Raising productivity by sharing the inconvenience

To implement the work style reforms, it is necessary to transform various institutions and have top executives at each organization strengthen the internal management, but that is not enough. It is also necessary to build social systems where organizations and citizens give consideration to those associated with their work and lives, including working hours, and not pursuing only their own convenience.

When asking a subordinate or a trading partner to do some work, by arranging or modifying the request, adjusting the schedule, or planning ahead, we could reduce their burden. For retail and service sectors as well, we need to ask ourselves if their services are really necessary late at night or on New Year's Day. Consumers can bear a little inconvenience or plan ahead so that they can use those services during normal hours. Omotenashi is important, but do customers truly need these services, and are these services profitable for shops? These are things that we need to reconsider.

In particular, if those in upper or superior positions take the initiative in sharing some of the inconvenience, efficiency in society as a whole and industrial productivity will improve. It is the same idea that if men share more housework, that will encourage women to play more roles in society. If everyone becomes used to sharing small inconveniences, what we once considered inconvenient will become routine and that will change our mindsets. That is when we succeed in finishing up the work style reform.

January 6, 2017

March 21, 2017

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