Where do Highly-Skilled Foreigners Work in Japan? An Industry Overview

Written by: Ramesh Krishnan | Published date: 28th November 2019

Last year, the Government of Japan announced a significant policy shift aimed at encouraging highly skilled workers to work and live in Japan. The government made it easier for these highly skilled workers to obtain a Permanent Residency Permit by introducing a points-based system.

Under the new system, the minimum period of residence to qualify for a PR permit has been drastically reduced so that in some cases, after just three years of residence, a foreigner may be eligible to apply for it. In some cases, this minimum period has been reduced to even just one year! This is a proactive step on the part of the government to address the need for highly skilled workers in many cutting-edge industries and sectors.

The Ministry of Labor of Japan has referred to “skilled foreign workers” to include holders of Professional, Technical and Specialist in Humanities/International Services visas. This broader reference goes beyond focusing on just the “Highly Skilled Foreign Workers” (one of the many visa statuses available to foreigners), and in this article, we provide an overview of where these skilled foreign workers in general work in Japan.

Why has there been an Increase of foreign workers in Japan?

In October 2019, the Immigration Services Agency of the Government of Japan announced that the number of foreigners residing in Japan hit a record high for the 7th consecutive year. As of June 2019, the total number of foreigner residents hit 2.282 million, a jump of 3.6% from the end of 2018.

So what’s actually causing this increase in foreign workers coming to Japan? Let’s take a closer look at the complete data from the Ministry of Labour released in October 2018 to understand why.

According to the Ministry of Labour, three factors are thought to contribute to this increase in foreign workers:

Active promotion of the recruitment of skilled foreign workers and foreign exchange students by the Government of Japan

In an attempt to improve Japanese universities' global rankings, the government of Japan has taken steps to make schools more appealing to foreign exchange students. These steps include adding more English-taught degree programs, giving students the option between spring or autumn enrollments, and establishing joint degree programs — all to make foreigners' transition into student life in Japan a lot easier.

An increase in the total number of Permanent Residency holders and spouses of Japanese persons in the labour market

In April 2018, the Japanese government loosened its requirements for foreigners applying for permanent residency (PR). This change was brought on by the government's desire to bring in more talent, and for those who have already been in the country for a certain period of time, make it easier for them to secure their place in Japan.

An increase in popularity of the Technical Trainee Visa system among the Japanese corporates

The Technical Intern Training Act came into effect in November 2017, and its program targets workers who want to enter occupations in industries like nursing care, automobile maintenance, and fishing, and in addition to their occupational training, they also receive Japanese language and culture lectures. This made it a lot easier for workers from developing countries, like India, Vietnam, Thailand, Indonesia and the Philippines to come to Japan.

Foreign Workers Across Professional, Specialized or Technical Industries

• There were a total of 238,412 people working with visas for the professional/technical/specialized fields (e.g., Humanities/International Services, etc.)
• These skilled workers made up 18.6% of all foreign workers in Japan in 2018.
• An overwhelming majority of these skilled workers (~75.6%) hold Engineering or Specialist Humanities/International Services visas.

Which industries employ the most foreign workers?

The Top 5 employers of foreign workers in Japan are from the following industries:

1. Manufacturing >> 30.2%
2. Service Industries (those not counted in other industries) >> 14.8%
3. Wholesale/ Retail >> 13.0%
4. Lodging and Food Services >> 12.3%
5. Education and Learning Support >> 5.1%

We give a detailed breakup below:

(Source of data: Ministry of Health, Labour and Welfare)

Which Industries Employ Skilled Workers the Most?

If we take a further deep-dive into the numbers, we can identify the following industries as the top employers of skilled workers holding professional/technical/specialist visas: (Figures are shown for skilled workers in these industries as a percentage of all skilled workers across industries)

1. Information and Communications >> 16.7%
2. Manufacturing >> 15.7%
3. Wholesale and Retail >> 14.1%
4. Education and Learning Support >> 11.6%
5. Services industries (not counted in other industries) >> 10.3%

(Source of data: Ministry of Health, Labour and Welfare)

Thus, we can see that the distribution of skilled workers is reasonably even across these top 5 industries.

Good News for Foreign Workers in Japan

We expect a significant uptake in the number of foreign workers due to the Special Skills Visa that came into effect this past April 2019. And that could mean good news for many of you!

Japan has currently set in motion a large immigration experiment. The result of this is already starting to show in major cities like Tokyo. Today, 1 in 8 people turning 20 years of age wasn’t born in Japan. That number doesn’t even include those people who were born in Japan but aren’t ethnically Japanese. Japan is slowly rewriting its future course, and these recent changes in the immigration policy are a harbinger of the positive things to come!

And we at JPort Journal sincerely hope to make your transition and subsequently life in Japan productive! As always, our team is here to help you keep up-to-date with the latest news on working and living in Japan.