Japanese brokerage firms boost wages, benefits to retain retirement-age employees

Japan’s largest securities firm is boosting wages and benefits for workers reaching retirement age, underscoring the urgency of retaining talent in one of the world’s fastest-aging countries.

Workers aged 60 or older typically face sharp declines in wages when reemployed, as well as reductions in roles such as document creation. Now, they are increasingly paid based on performance and given greater responsibility based on their experience.

At Daiwa Securities Group Co., the salaries of senior employees aged 60 or above in Japan have risen by an average of 15% each year in the past two years. Nomura Holdings Inc. added paid sick leave to benefits last year, putting it on par with younger peers. The securities arm of Sumitomo Mitsui Financial Group has also increased the salary levels of senior employees for two consecutive years.

Nomura, Japan’s largest brokerage, said in response to a Bloomberg query: “The diverse experience and skills of employees who are 60 or older are very important to our business.” For example, “employees with experience in a world with interest rates above zero can Providing information that is unimaginable to the younger generation.”

As Japan’s fertility rate continues its record decline, prompting the government to take desperate action, companies are also having to adjust their mindset towards the workforce. A report from Keidanren, Japan’s largest business lobby group, said companies should do more to motivate older workers, such as setting wages based on performance and job responsibilities.

“Redeploying older adults into the workforce is critical if companies want to stay in business or achieve growth,” said Nobuhiro Maeda, senior analyst at the NLI Institute’s Office of Gerontology Promotion. “From now on, labor shortages are expected to become More serious.”

Data from Japan’s Ministry of Internal Affairs and Communications since 2002 show that employees over the age of 60 accounted for a record 14% of employees at Japanese financial companies and insurance companies last year. The proportion of employees aged 20 to 34 fell to 26% from 36% in 2002.

Other companies in Japan are also taking action. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank, plans to raise wages by up to 40% for employees at its main banking unit who rejoin the company after they retire at age 60, Nikkei reported.

For Japanese brokerages, the issue of retaining older talent is particularly important. Financial firms are seeking their experience navigating bond markets, which are booming again after a decades-long policy-induced lull.

In addition to raising wages, Daiwa Securities has also removed upper age limits for some jobs, a spokesman for Japan’s second-largest brokerage said. Mizuho Securities adopted a new personnel system in July, and rehired personnel enjoy the same benefits.

A spokesman for Mizuho Securities said: “We hope that employees will continue to stay and play an active role after the age of 60 if they have the required abilities, experience and value.”

These changes may be having an impact. Nomura’s flagship brokerage unit in Japan has seen a 20% rise in the number of people rehired after turning 60 or older since the fiscal year ended March 2019, to 800, company data showed.

“There is a certain value in those who know firsthand what was going on before Japan entered its ‘lost thirty years,'” said Hideyasu Ban, an analyst at Bloomberg Intelligence, referring to those in their late 50s and early 60s who lived through Japan’s economic boom and bust. group. Overview of Japanese financial markets. “Their experience may be beneficial.”

This article was generated from automated news agency feeds without modifications to the text.