Gender Disparity in Japan’s Workplace and What Global Employers Can Do

December 16, 2020

Gender inequality is deeply embedded in Japanese culture and reflected in the workplace with a reported 24% gender wage gap and a current ranking 121st out of 153 countries in 2020 World Economic Forum's Global Gender Gap Report.  In the private sector, 57% of Japanese companies have no female board representation and only 15% of senior and leadership positions are held by women. For global employers, it is important to understand related social norms and government initiatives, and what role they can play to promote the diversity and fully embrace the benefits it can bring. 
 
Japanese Gender Inequality Rooted in the Enduring “Lifelong vs Nonregular” Employment System.  Starting after World War II, where the Japanese economy was shattered, a “Lifelong” employment social pact was formed between companies and employees to help with the skyrocketing demand for labor.  Under this “Lifelong” employment pact, companies guarantee the employee’s material needs until the day they died.  In exchange, employees devote themselves to their companies for life. Those jobs, usually taken by men, typically offered better bonuses and benefits.  In contrast, more than half of women who work are “nonregular” (fixed-term) employees.  In these roles, women tend to be paid significantly less than their lifelong peers for doing the same job. The group accounts for 37% of the country’s labor force.
 
A 2013 law does prohibit “unreasonable” differences in treatment between fixed-term and indefinite-term employees.  However, it is unclear to what extent it prevents such disparity. Further, two recent cases at Japan’s top court have disappointed nonregular employees – a group largely comprised of women.  In both cases, the top court determined no “unreasonable” differences were found between nonregular and lifetime employees, even though the female plaintiffs were denied access to bonuses and retirement payments unlike their lifelong – and mostly male – counterparts. 
 
The Japanese Supreme Court rulings above are just one example the limits of the country’s recent push to elevate women in the workplace, such as an official program known as "Womenomics", which was designed to help women by economic growth. However, trying to promote gender diversity without addressing the culturally ingrained barriers that lock women into gender-restricted roles has not proven effective in Japan.  Unconscious biases and societal expectations of traditional gender behaviors can hold women back or create workplace hurdles such as harassment.  
 
The government needs to adopt strategically inclusive policies and practices. Gender equality and diversity should be holistically considered from building a more supportive justice system protecting female workforce, to proposing and implementing regulations such as lifestyle reform and mandatory paternity leave
 
Global Companies and Investors Can Help Drive Change in Japan. This year, international asset managers voted against Japanese companies with no gender diversity on their boards. It suggests that global investors and companies, which are more advanced on gender diversity and inclusion, might pressure Japanese employers and the government into addressing the root cause of corporate gender discrimination.  Some global companies have already taken the lead by implementing equal pay for equal work regardless of sex and stopping gender disclosure requirements on job application
 
Outlook:  Although improvement in gender pay and diversity in Japan is expected to take time, global employers should consider themselves to be the impetus of a cultural change. Companies should strive for decreasing gender pay gap and pursuing policies and practices that enable women to be free from harassment and have equal participation within leadership and governance.