Ed Eliason
Abstract: This article briefly reviews the facets and challenges of Japan’s unique lifetime employment system, used by many of the large companies in the Japanese business community. The concept of lifetime employment has existed in its present form for only about fifty-five or sixty years, yet this plan has been tremendously successful during Japan’s rise to economic superpower status. It is a quasi-paternalistic relationship which provides multiple benefits for each side while simultaneously conveying the message that company expansion and overall economic success is the basis for continued mutual prosperity. Employers make a commitment to oversee the welfare of their employees, and the employees in turn put themselves in the employer’s care. Multiple benefits accrue for management and labor, along with a community environment which encourages camaraderie and stimulates a business atmosphere conducive to efficiency and productivity. The key to the success of this system is continued expansion and productivity. However, current and future economic trends point toward reduced profitability and a more modest future growth rate, which presents problems. It is becoming increasingly clear that the current permanent employment system must either undergo additional adjustments or be restructured in some way. The changes will have to be slow and gradual, but milestone transformations are looming on the horizon to help insure the continued profitability of the Japanese companies currently utilizing the permanent employment system.
Keywords: employment, workers, Japan, Japanese, system, economics, business, management
