Employment strategies required in an aging society with fewer children

Entering the last decade of the 20th century, the economic environment affecting Japanese firms changed substantially. The long-term growth rate had been on a downward trend before then, but accelerated even further in the 1990s. The annual average growth rate, which stood at 10.5 percent in the 1960s, fell to 5.1 percent in the 1970s, 3.9 percent in the 1980s and eventually to around one percent in the 1990s. Japanese firms can no longer expect constant economic growth, and have come under pressure to take measures such as downsizing or closing branches or factories. Consequently, they are obliged to avoid fixed labor costs and are beginning to outsource. At the same time, they are cutting back on regular employees and increasing the number of part-time, dispatched and other types of workers with fixed-term labor contracts. In addition, as an increasing number of large firms enter into bankruptcy, the employment security of existing employees has been undermined, irrespective of the wishes of employers. Intensifying competition among firms, both domestically and on an international scale, together with a declining economic growth rate, is having a considerable impact on company employment practices. Japanese firms have been, and remain, fully aware of global competition and the need to enhance their export strength. As a result, it has been noted that, particularly in industries producing Employment Strategies Required in an Aging Society with Fewer Children