A Japanese company bans late-night work. A baby boom soon follows

We set out to boost productivity but had no idea it would have an impact on the birthrate, says Fumihiko Kobayashi, Executive vice-president, Itochu

When Masahiro Okafuji became chief executive officer of Itochu Corp. in 2010, he made improving productivity a top priority so the company could compete against bigger rivals in Japan. His approach was counterintuitive. Working in the office after 8 pm would be banned, and there would be no more overtime-with rare exceptions. Security guards and human resources staff would scout Itochu’s office building in Tokyo, telling people to go home. Those clinging to their desk were told to come in early the next day to get their work done-and get paid extra.

The tough love worked. A decade later, the company-whose businesses range from the FamilyMart convenience store chain to metals trading-reported a more than fivefold jump in profit per employee from 2010 to 2021 as surging commodities prices and a weak yen buoyed its bottom line. What also changed, to the surprise of Itochu’s management, is that more female employees took maternity leave, had kids and came back to work.

“We set out to boost productivity but had no idea it would have an impact on the birthrate,” says Fumihiko Kobayashi, Itochu’s executive vice president.
 

The trading house has emerged as an unlikely trailblazer in bucking a falling birthrate trend that Japan’s government and others around the world have tried hard to reverse, without much success. Itochu saw the fertility rate among full-time employees double in the years since Okafuji became CEO, reaching almost two children per female employee in the fiscal year ended March 31, 2022-far exceeding Japan’s current national rate of about 1.3.

The birthrate spike caught the attention of Itochu board member Atsuko Muraki, who previously served as director of equal employment and child welfare at Japan’s Ministry of Health, Labour and Welfare. She encouraged the company to make the trend-defying numbers public last year, seeking to send the social message that, for women, raising kids and having a career don’t have to come at each other’s expense. Mixed reactions followed. Some criticized Itochu for meddling in employees’ lives and being insensitive to those with reproductive challenges.Itochu’s night work ban eased some of the work pressure. And after the Covid-19 pandemic, employees were granted the option to work from home two days a week. 

The company went further last year, when it cut core office hours from eight to six, so people can punch out as early as 3 pm.