Rapidly ageing population forces Japanese firms to lean on foreign workers

By River Akira Davis & Hisako Ueno

Four years ago, Hizatsuki Confectionery hired its first foreign workers.The company, in a mountainous region north of Tokyo, has been baking and frying glutinous dough into rice crackers since 1923. Then it was known as Teikoku Senbei, or Imperial Rice Crackers.

Today, the company’s third-generation president, Takeo Hizatsuki, has encountered an existential challenge that his father and grandfather never did. Hizatsuki Confectionery can’t find enough Japanese employees.

A shrinking and rapidly ageing population has forced Japan, which for centuries was mostly closed off to immigrants, to allow foreign workers to enter the country and potentially stay for good. Most come from other parts of Asia, including China, Vietnam and the Philippines.

That transition to employing more foreign workers has proceeded gradually at big companies in major cities over the past decade. But in parts of the countryside, where labour shortages are particularly acute, some of Japan’s storied businesses like Hizatsuki Confectionery are just now figuring out how to accommodate foreign workers for the first time. These are areas of the country where few speak languages other than Japanese, and communities tend to be more wary of integrating newcomers. Whether companies can persuade foreigners to stay may dictate their survival.

For small and medium-size businesses, the backbone of Japan’s regional economies, “foreign workers are indispensable,” said Yuki Hashimoto, a senior fellow at the Research Institute of Economy, Trade and Industry, or RIETI, in Tokyo. “Without them, they will collapse.” Japan lacks a national system for helping foreign workers with essentials like language assistance. Local businesses and municipalities are quickly fashioning their own methods of long-term support.

For Hizatsuki Confectionery, the company’s experience with foreign workers began in 2020, when Hizatsuki, the president for the past two decades, decided to hire 10 workers from Vietnam.

He recalled in an interview that his Japanese employees were deeply unsettled by the change. “I told them: ‘To be able to feed the Japanese people, we need to be able to survive. And to be able to survive, we need to accept foreign workers.’”

Over the past four years, Hizatsuki said, he established various policies aimed at retaining the workers from Vietnam, as well as others from Indonesia, who now make up two dozen of the company’s 210 employees.