Even before 2020, when the Covid-19 pandemic struck, the Japanese government was already encouraging remote work as part of its labor reform measures, although most companies were slow to warm up to the idea. Due to the Covid-19 crisis, remote work became more common and normalized in Japan, as well as in other parts of the world.
More Japanese corporations have made the transition towards more flexible working arrangements as well. For example, technology company Fujitsu announced its “Work Life Shift” program, a permanent work-from-home plan designed to increase workers’ flexibility and autonomy.
One major benefit of remote or hybrid work is alleviating the burden on public infrastructure, particularly the transport system in urban centers, thus reducing carbon impact, congestion and time wasted in traffic jams. The average Japanese worker spends 71.8 minutes on their daily commute. The time saved could be better used in more meaningful ways such as sleep, rest and maintaining work-life balance.
The shift to more remote work can also catalyze the digitalization and modernization of workplaces, which can increase efficiency in many businesses. In the long term, companies may enjoy cost savings on rent and utilities. It is estimated that every worker who works from home saves a company US$22,000 a year. Moreover, remote work saves money not just for the employer but also the employee. The average worker might save US$4,000 annually by spending less on petrol, car maintenance, coffee, lunches and clothes.
The rise of the four-day work week
In June 2021, economic policy guidelines published annually by the Japanese government included recommendations for companies to provide a four-day work week option for workers. This idea has also been gaining traction in other countries such as New Zealand. In addition to a happier and a healthier workforce, it may even improve productivity levels. In 2019, Microsoft Japan tested a four-day work week, which boosted productivity by 40 percent. Panasonic has also announced that it will start giving interested employees a third day off.
A shorter work week has other benefits for the Japanese economy as well. The labor force would be able to dedicate more time to retraining and reskilling, which can help prepare them for a transition to higher-growth sectors. Faced with an ageing population, Japan’s workforce is shrinking rapidly, and key industries are facing labor shortages. The Japanese workforce is predicted to decrease to 68.75 million in 2030, down from a peak of 87.26 million in 1995. It has thus become essential for workers to stay productive for as long as possible to cushion the demographic pressure.
More free time could contribute to an increase in domestic consumption and other economic activities. Young people in Japan are keen to take on side jobs as a supplement to traditional employment. This could lead to more diversity and fluidity in the labor market and also promote entrepreneurship. Furthermore, a shorter work week can give younger people more time for social interaction and family, which may encourage them to date, marry and have more children, which would serve Japan’s efforts to address the challenge of its ageing demographics.