Japanese Employment System

Three types of fulltime workers in Japan and differences from western working system

by Lina Writer/Translator

There are three main types of “full-time workers” in Japan: regular-fulltime workers, periodic-contract workers and full-time contractors. Each definition is a unique concept and particular in Japan.

3 types of fulltime worker contracts in Japan

Regular-fulltime worker (正社員)

Regular-fulltime workers (正社員, sei-shain) are all permanent positions, and they account for 60% of “salarymen” in Japan. They do not traditionally get fired (終身雇用制度), but when they do, either the company is going bankrupt, or it will be due to committing a crime or serious sexual harassment, etc. Therefore, if a regular-fulltime worker gets fired for their flaws, it will pretty much be the end of his “life”; since Japan has a culture of “shame”, he will never get a decent job or a regular-fulltime worker job again. Regular-fulltime work is not only a permanent position but also can receive many benefits from the company such as having a bonus, result rewards, rent subsidies, gym subsidies, etc. Now I mentioned all the good sides of this position, but it has a lot of bad points, which I am going to discuss later.

Periodic-contract worker (契約社員)

Periodic-contract workers (契約社員, keiyaku-shain) are full-time workers, but their term of work is decided when they sign their contracts. The durations are usually from one month to one year, and if the company wants them to work longer term, then, they would renew the contract. However, they can only stay with one company for a maximum of five years. After five years, periodic-contract workers will either become regular-fulltime workers or leave the company.

Fulltime contractor (派遣社員)

Fulltime contractors (派遣社員, haken-shain) belong to recruitment agencies called haken-gaisha (派遣会社), which are the type of companies who own “experts” and send them to other companies that are facing a shortage of labour. The expertise of fulltime-contractors varies from highly skilled engineering to “the ability to use Microsoft Office” or “having good communication skills.

In my previous job I was working as a fulltime contractor. I was working as a translator on a three-year project that needed a lot of personnel. The company did not want to hire regular-fulltime workers because they cannot fire them once they have been hired after the 3-year project, and skilful people do not satisfy with periodic-contract worker positions. but they did need a lot of them, so it was almost impossible to recruit employees.

The nature of each employee

The reason why workers need to leave in 3 or 5 years

As I mentioned, periodic-contract workers cannot stay at the same company for more than 5 years, and in the case of fulltime contractors, it is a maximum of 3 years. This measurement has been introduced to encourage companies to give workers stable positions. If a periodic-contractor or fulltime contractor is in charge of important tasks, the company has no choice but to hire the person as a regular-fulltime worker and give him a permanent position.

However, in most cases, when a person becomes a periodic-contract worker or fulltime contractor, they have failed in job hunting to be a regular-fulltime worker often due to a lack of career and skills or academic background. Also, from the beginning, they are hired with the intention to be released, in at least 3 or 5 years’ time. Thus, they will not be given much responsibility, but rather asked to perform “replaceable” work. In the case of my previous job, I was asked to be a “human Google translate”; it should be more precise than the AI, but other translators can replace me if they have the same level of English and Japanese skills as I have.

Good and bad sides depending on the position

Most Japanese people seek to be regular-fulltime workers, however, companies are pretty cautious about hiring regular-fulltime workers because they cannot fire them even if they are incompetent. Some full-time contractors do have competent skills and they are not replaceable, but this is very rare, and their salary is higher than regular-fulltime workers. But mostly it is not the case because recruitment agencies, the companies fulltime contractors truly belong to, receive at least 30% of what they are actually earning and the workers themselves will not be eligible for bonuses or retirement funds, a large lump sum awarded upon leaving a job.

However, there are skilful people who would want to stay fulltime contractors because once you become a regular-fulltime worker, your priority needs to be work, no matter what. They need to work overtime as long as needed to finish their tasks, and working weekends might be necessary. In Tokyo especially, trains are running after midnight, so they need to be in the office until late, and it could be worse if a person works from home because you can work into the small hours of the morning. By contrast, when I was a fulltime contractor, I could use all my paid holiday, and I did not have to work after 6 pm or at the weekend unless I wanted to. 

You can be lazy, and still not get fired

Also, due to the nature of being a regular full-time worker, your salary will not necessarily increase with harder work or more successful output within your position, it depends on your boss or company policy. So, many regular-fulltime workers can become very lazy, and it is obviously not a good situation for companies, but they cannot fire the lazy regular-fulltime workers.

Social problems caused by Japanese employment system

Your life is determined when you are 18

The Japanese employment system is causing one of the most serious problems in Japan right now. The biggest issue is Japanese person’s life can be decided when they are 18 years old. Since companies cannot fire regular-fulltime workers, the academic background has a strong influence as well as the company they worked for in the past. When a university student starts job hunting and wants to work at a big/famous company, if they are not from a certain level of the university, they will never get the chance to have interviews.

We call it academic background filter (学歴フィルター, gakureki-filter) because whether you can get job interviews or not is directly decided by university names, in the same way that we pour liquids through filter paper. This is such a transparent situation when Japanese parents put their children in cram schools from the elementary school level and force them to go to private schools that have a high percentage of students pass the entrance exams for quality universities. 

Many Japanese school age students are forced to study very hard, especially when they are in high school, because three years of high school life directly dictates their future. Then, since they worked too hard to get into good universities, they do not study at all in universities (but can still get decent jobs). When I was in high school, the first class started at 7 am, and we finished school around 5:30 pm. Many of my friends went to cram schools after until 8 or 9 pm, and we had a lot of homework that needed 3 hours or more to finish. It is almost impossible to finish the homework, so we were studying while eating lunch, the only 50 mins break. As a result, our breaks consisted of the brief 5 minutes between class changes.

Overwork and overtime

Most university students want to be regular-fulltime workers, but the position is very hard to maintain. The employee’s priority needs to be the job and there are a lot of rules to follow, including being prohibited from having side jobs. It is a sacrifice that might be worth paying to have an incredibly stable position, but some companies do not give regular-fulltime workers enough salary, or there may not be any payment for overtime1.

Also, in Japan, being “patient” is valued a lot. So, if a person is in their 20s, and has changed their job, let’s say, three or four times, it is going to be extremely difficult to be hired as a regular-fulltime worker because regular-fulltime workers are expected to provide a commitment until the age of 65.

However, you will never know until you actually become a member of the company whether or not you can get a promising salary, or the level of hard work you can tolerate without becoming sick. Thus, there are many regular-fulltime workers who want to quit their jobs, but they do not, because it is a hard position to achieve and once you quit, you may never become one again. I have quite a few friends working in Tokyo who became depressed or sick from work to the level that they needed to leave work for a few months at least.  

Many companies also do not try to hire married women or women who have kids because they think that they will not be able to give the necessary commitment, so those women have no choice but to become fulltime contractors. Indeed, it is almost impossible to manage both a regular-fulltime worker position and motherhood, but fulltime contractors cannot be in charge of important tasks that can improve their ability and gain meaningful experiences. Therefore, mothers struggle to have jobs when they want to work again after sending children to university.

Leading issue to the decreased birthrate

In Japan, women did not work until a few decades ago, focusing purely on housework and raising children. However, this is widely considered to be important work. However, today, children need to go to cram schools and private schools, or they do not get through the entrance exams of good universities, and education costs can be extremely expensive.

I have worked as a teacher in cram schools, and the monthly tuition fees are at least 400 USD for very basic ones, and as much as 10,000 USD!2 It is said that to raise a child until 22 years old in Japan, you need approximately 300,000 USD, and in Tokyo it costs more. That is why it can be a very common reason that Japanese couples do not want more than one child. 

The poor stay poor, no second chance, no American dream

The education provided by public schools is obviously not enough to pass the entrance exams, and so if you come from a family with a less-favourable financial situation, there would be not that many chances to escape the poverty in your generation. The poor stay poor. Also, if you are from the countryside, there are not many cram schools and private schools, and even if a student could pass the entrance exams of university, they will definitely need to live by themselves, leaving your hometown, which costs a lot of money. Also, salary is not high in the country, so it is challenging for parents to support their children.

Overall Japan is a country that does not give you a second chance. Once you are fired, once you have dropped out of school, once you quit a job… it is extremely hard to head back to the rails and start a new life. Japanese people are not religious at all, but being faithful or avoiding “shame” is the “religion”. In Japan, it is common that poor people do not want to be given income support because it is “shameful” to live and depend on someone else’s taxes. 3

The Japanese are raised to be disciplined and independent, and change is not a good thing in Japan, including changing jobs. That is why the regular-fulltime worker system has worked even though the company forces you to endure something unreasonable, and it might make you sick. However, time is changing and the situation is different from a few decades ago. The system constructed during Japan’s high economic miracle no longer fits the current situation of this working generation. This has been a problem for a couple of decades, and it seems to be continuing so. Eventually this broken system could lead to the breakdown of modern society. Unless some strong authority takes a revolutionary step.

  1. The Japanese people call these “black companies.”
  2. The students’ parents are professionals such as doctors and lawyers and can afford it but, sadly, just paying a lot of money to a school does not guarantee that their children will get into a quality one.
  3. A little while ago I read the news that an 82-year-old woman, living with her older sister who needs nursing care, refused to get income support because it would be shameful. Instead, she killed her sister, and surrendered herself to the police. The sisters’ combined pension income was only 100,000 JPY – my rent is 90,000 JPY- but the sisters were still refusing the money they needed to live on.
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