Navigating work transformation in Japan

Rapid technological change and shifting social values are redefining the nature of work worldwide. In Japan, traditional employment models built around lifetime employment and seniority are proving increasingly misaligned with today’s social and economic realities. This is prompting a gradual, but meaningful, rethinking of how work is structured.

One of the central drivers of this transition is the rising importance of upskilling and reskilling. According to a Workday survey, 76% of managers in Japan believe that skills-based approaches can boost productivity, innovation and organizational agility, supporting broader economic growth. Nearly half of Japanese companies have already begun moving towards skills-based talent models, signalling a structural shift in workforce management.

This transformation is also evident at the individual level. A 2025 survey by Recruit found that 'personal growth' is the top priority (35.1%) for new employees, yet more than 30% remain concerned about whether they can develop their skills in their current roles.

Meanwhile, the meaning of work in Japan is also changing. According to a Cabinet Office public opinion survey, the share of people who cite 'earning money' as their primary reason for working rose from approximately 50% in 2001 to approximately 63% in 2024. By contrast, the proportion of respondents who say they work 'to find purpose in life' has declined, indicating that more people are seeking a sense of purpose outside of work. This shift is further reflected in perceptions of the ideal job, where 'work that allows for a good work-life balance' is increasingly valued, following 'stable income' and 'enjoyable work.'

In response, the Japanese government, local authorities and businesses are advancing reforms to align work models with these changing realities.

From October 2025, the Japanese government introduced a financial support scheme that allows working individuals to take a temporary leave from their jobs to focus on acquiring new skills. This programme targets employees who do not have access to employer-provided paid reskilling leave, and it provides an education and training leave allowance equivalent to 50–80% of their wages during the leave period. The scheme is funded through employment insurance, with benefits available for 90 to 150 days, depending on the individual’s contribution history.

This initiative aims to reduce the burden on employers and individuals while promoting reskilling. The Cabinet also expects that taking time away from one’s current job to gain new experiences will support future careers and long-term personal development and that sharing these experiences with society will contribute to Japan’s growth, through skills and in broader ways.

Flexible work arrangements are also expanding through the adoption of four-day working-week models. Tokyo introduced a system in April 2025, following prefectures such as Ibaraki, Chiba, Hyogo, Nara and Osaka. Under Tokyo’s model, employees can take one additional day off per week, as long as they meet the standard requirement of 155 working hours over a four-week period, with no reduction in total working hours or pay.

As labour shortages intensify, flexible working arrangements are gaining traction as a means of attracting and retaining a more diverse workforce. A number of companies, including Fast Retailing, Yahoo Japan and Sagawa Express, have already adopted similar systems, while others, including Mizuho Financial Group, offer options for four-day working weeks. By taking the lead, local governments, like Tokyo, are expected to encourage wider adoption of these models across the private sector.

Remote work expanded rapidly in response to the COVID-19 pandemic. While many organizations have since shifted from fully remote arrangements to hybrid models, flexible work has become firmly established. A 2025 survey found that only 22.6% of Japanese companies neither implement nor plan to implement remote work, while the largest share (32.3%) reported that approximately 50-80% of their employees work remotely. Another survey, conducted in 2025, showed that 82.2% of workers wish to continue teleworking, indicating that support for flexible work arrangements remains strong.

As economic and social conditions continue to evolve, both the skills required for work and how work is performed are changing significantly. The World Economic Forum’s Future of Jobs Report 2025 projects that 39% of existing skills will be transformed or become obsolete over the five years from 2025, underscoring the growing importance of reskilling.

At the same time, expectations for work-life balance and flexible work arrangements continue to rise. “Local employers show a strong desire to utilize the existing workforce as operating models undergo transformation. Our data shows that employers in Japan have a strong focus on the country’s demographic trends and are more likely to prioritize upskilling and transitioning their staff between roles and less likely to reduce staffing levels,” comments Sam Grayling, Insights Lead for the New Economy and Society at the World Economic Forum.

Support for sabbatical-style reskilling, the expansion of four-day working weeks and the normalization of hybrid work represent concrete responses to these shifts. As these initiatives scale, they have the potential to enhance individual well-being and productivity, contributing to a more resilient economy and society.