This article is an excerpt from our research publication SJ3: The pathway to regenerative business. A Japanese version is available on Note.
Summary
- Wellbeing is crucial for sustainable action on individual and collective levels and can impact employee engagement, supported by improved communication and shared purpose.
- The majority of Japanese employees are unhappy at work. Underlying reasons include structural issues like seniority-based promotion, as well as a lack of agency and inclusion.
- Addressing wellbeing in the workplace is a long term investment, with cohesive strategies leading to exponential benefits.
Introduction
Since its first formal definition by the United Nations Brundtland Commission in 1987¹, sustainability has mostly been described in human terms, with humans as both actors and benefactors. In these terms, ‘sustainability’ implies the ability to simply sustain acceptable living conditions for future generations.
In line with this human-centred approach, people’s wellbeing should play a foundational role in driving sustainable transformation, and organisations have much to gain from cultivating wellbeing in the workplace. Yet this has often come low on the corporate agenda, especially in Japan.
As a result, Japanese people are, on the whole, unhappy with their jobs. Our research indicates that across all generations and sustainability consciousness groups, work, career, and finances are the aspects of wellbeing with the lowest levels of satisfaction. Why is this the case, and what can Japanese organisations do about it?
There are several well documented aspects of Japanese work culture that could negatively affect people’s personal wellbeing, including long work hours, high pressure, and limited career advancement opportunities. The expectations of overtime and a strong work ethic often lead to limited personal time, poor work-life balance, and dissatisfaction.
This culture began to shift with the transition towards remote work during the COVID-19 pandemic.
A WeWork Japan study² found that over half of companies that implemented hybrid work policies now have more that 25% of employees claiming they can switch on and off effectively, and take time off as necessary. There are also higher average wellbeing levels among people who work remotely up to three days a week.
This is a good starting point, but there are still a series of structural and cultural factors limiting employee wellbeing within companies in Japan.
Seniority
Seniority-based promotion systems have traditionally been effective at maintaining loyalty and stability within Japanese companies, but have also resulted in slow career progression for younger employees, as well as a lack of autonomy.
While there may be diversity of age in many companies, simply hiring new graduates is not enough to make them feel included or valued. Top-down decision making and bias towards seniors reduces opportunities for younger employees to contribute meaningfully, while equally discouraging older employees from challenging traditional practices.
Although many companies in Japan are starting to appreciate the importance of recognising and rewarding younger talent, there is still a long way to go in terms of achieving a more diverse and meritocratic corporate culture in Japan.
Shifting from seniority-based promotions to performance-based tracks is the obvious solution to empower younger members, as boldly adopted by companies like Toyota and NTT. It should be noted that this is likely to meet with some resistance from longer-tenured employees, prompting some companies to adopt a phased approach.
In the meantime, implementing employee recognition programs — regardless of age or seniority — and encouraging cross-generational mentorship and collaboration are other ways to overcome this barrier.
Employee sense of agency
Partly as a result of these structural issues, many workers feel a sense of disempowerment and lack of fulfilment, with little involvement in decision-making processes or chance to express innovative ideas.
Hierarchy, especially in larger organisations, hinders change. Many Generation Z employees hesitate to share new ideas even with their direct superiors, let alone with people in a greater position of influence.
As well as potentially restricting company growth, this lack of input also reduces the chances that the system will improve: our study found that less than 10% of employees consciously reflect about problems at the workplace or take any initiative to discuss and solve them, a trend which is especially prevalent in younger generations.
If young people feel powerless or unwilling to make improvements in their company, it’s hard for them to feel good about work overall.
Establishing mechanisms to regularly collect, assess, and respond to employee feedback is critical. Equally important is the internal communication that goes with it: if you run surveys and workshops, participants will only feel empowered once they see the results and know their voice has been reflected.
On a day-to-day basis, there is also the opportunity to train managers in more democratic forms of leadership, with practices as simple as designing meetings and processes to be more inclusive of employee opinions.
Another empowering practice is reverse mentorship, which gives younger employees the chance to share their unique skills and expertise with superiors.
Diversity, Equity, and Inclusion (DEI）
Within corporate cultures that focus on conformity and harmony, people who don’t fit identity expectations can struggle to reach their potential. Lack of inclusion is a factor behind low levels of work and career wellbeing, with our study finding that only 5% of people feel accepted at work regardless of their personal identity.
The Japanese workforce has always been relatively homogeneous, with companies preferring internal promotion instead of mid career hires. This has resulted in a relative lack of diversity in terms of gender, ethnicity, nationality, and age.
Japan also has a relatively low number of global workers in its companies, limited by language and cultural barriers, as well as traditionally strict immigration, although this has started to change with newer government policies incentivising highly skilled workers. While global talent can bring a diverse range of perspectives and experiences, many struggle to integrate longer term and suffer from exclusion.
Members of the LGBTQIA+ community often face discrimination and harassment at work in Japan. In a 2022 study with 3,000 LGBTQIA+ participants, more than 60% of people said there were no specific policies or support for them in their workplaces.³
Gender inequality is a significant challenge in Japan, ranking 125th in the 2023 Global Gender Gap Report, and 123rd for Economic Participation and Opportunity, with a particularly low share of women in management, senior, and elected roles.⁴
Despite substantial efforts, there is still limited access to leadership roles and a lack of support for work-life balance, particularly when it comes to shared responsibility for raising children. This contributes to dissatisfaction at work and low workforce participation.
In light of this sort of external pressure, more Japanese companies are recognising the need to develop cohesive DEI strategies. This can range from inclusive work policies and parental leave, to diversifying hiring and training around areas like unconscious bias and cultural sensitivity. Employee Resource Groups (ERGs) are common, and while top-down decision making can help drive change, this also creates movement from the bottom up, which is then up to management to amplify and support.
Sense of meaning
While Japanese workers may not have the agency to drive change, or feel included in the workplace, there is also a third, more fundamental element of career wellbeing: a sense of meaning in their work.
Corinne Johnson, an advisor to Japanese corporations, points to the culture of inefficiency as a root cause, contrasting the process-oriented Japanese approach with the output-oriented Western model: “There is so much wasted time and effort in many organisations — with people filling in excel spreadsheets and doing work that’s intrinsically administrative, not creating value.”
This inevitably takes its toll on mental health and wellbeing: “Of course they have low level depression. If you do meaningless work for 40 hours a week, that’s a bad job.”
The way to address this challenge is to create or rediscover a sense of purpose within the organisation — articulating and communicating it clearly, modelling it through leadership, and bringing it to life in daily operations.
This process typically takes several months of research and refinement before an extended activation phase. At all steps during this journey, there is an opportunity to engage employees of all departments, and to foster a greater sense of meaning on an individual and collective level.
Job mobility
Not only do workers lack meaning in the work they do, they also struggle to see a clear path forward, or a way out of their current situation. Our 2023 study found that less than 5% of employees feel that they are on track for a desirable career. 29% plan to change jobs within five years, and 21% are unsure, with only half the working population intending to stay with their current companies.
When they do move, workers are looking for companies that have fair policies and compensation packages, relevant and manageable workloads, and positive cultures.
Job hopping, which used to be rare in a country of lifetime employment, is now a key driver of pay increases in Japan, with a third of mid-career hires receiving raises of 10% or more. The practice is still relatively new, with Japanese employees staying up to three times longer in the same company than their British or American counterparts: an average of 12 years.
Japanese companies need to be aware of the new reality of job hopping, taking steps to retain their top talent. This includes articulating career paths, sharing transparent and flexible compensation structures, and providing opportunities for employees to learn as part of their roles. At the same time, they can also embrace the positive of a more fluid job market by welcoming diverse mid-career people with fresh knowledge and perspectives.
Sustainability
Employees expect a lot from their workplace when it comes to corporate responsibility. However, only 25% believe their organisation is taking meaningful action on sustainability, while another 25% believe the opposite. This is an important opportunity for companies to engage with employees through sustainability-related initiatives.
Current efforts often go unnoticed, even by people who are most interested and willing to contribute. 20% of the High consciousness group remain unaware of the opportunities to get involved at the workplace, highlighting the need for proactive communication and engagement. 25% of this group are aware of corporate sustainability issues but uninvolved, representing a missed opportunity for their employers.
Improved internal communication is one approach to increasing the effectiveness of these efforts, as is joining the dots between existing initiatives. A common story in both Japanese and Western companies is that there are a wide range of sustainability initiatives across departments, but a lack of a common thread to connect them.
This requires a clear and coherent strategy. At its core, guiding and organising corporate sustainability hinges on establishing a common purpose that directly contributes to employee wellbeing. This requires identifying, articulating, modelling, and manifesting this purpose across the whole organisation.
Outcomes
While employee dissatisfaction is partly responsible for growing fluidity in the job market, it also has implications for sustainable transformation in and through companies.
Employees from higher consciousness groups tend to report better work and career-related wellbeing, especially in the areas of inclusion, career progression, and agency — suggesting again that these criteria are prerequisites for developing a sustainable mindset.
Yet wellbeing is not only the foundation for sustainability consciousness on the individual level.
The WHO defines wellbeing in collective terms as “a concept applied at a societal level to describe the overall conditions experienced by the population”.⁵ It also forms the basis for what organisations are able to achieve as a whole. Companies that consciously invest in developing the collective wellbeing of their workforce are better placed to address global problems.
These companies have the opportunity to make a substantial contribution, magnified by the engagement of their people. This can be achieved by: addressing structural issues, embracing cross-generational collaboration, creating a sense of agency, and embracing DEI and purpose.
Although there are some quick wins to be had, fostering a culture of wellbeing at work is a long term investment, and one that will unlock immense sources of value in any organisation.
References
- Report of the World Commission on Environment and Development: Our Common Future (1987) Un-documents.net. http://www.un-documents.net/our-common-future.pdf
- ハイブリットワーク普及率、2021年から上昇し5割強に — WeWork調べ (2022). https://japan.cnet.com/article/35194290/
- Nijiiro Diversity (2022). Nijibridge.jp. https://nijibridge.jp/wp-content/uploads/2023/03/nijiVOICE2022_report.pdf
- Global gender gap report 2023 (2023). World Economic Forum. https://www3.weforum.org/docs/WEF_GGGR_2023.pdf
- Towards developing WHO’s agenda on well-being (2023) https://www.who.int/publications/i/item/9789240039384
Fabric is a Strategic Design and Sustainability consultancy helping businesses move towards more innovative, sustainable futures. Based in Tokyo, we’ve been consulting with global and local companies since 2004. We have extensive experience bringing together design thinking, sustainability, and human insight to deliver good strategy for clients.
