Japanese Companies Sprucing Up Employee Dorms to Attract New Workers, Keep Young Ones They Have

The Yomiuri Shimbun

21:00 JST, November 10, 2024

Some are being decked out with spa-like baths with saunas and sports gyms, and maybe a cafe to enhance interactions between the residents.

But these are not amenities for an upper-scale apartment complex. A growing number of top Japanese companies are sprucing up their employee dormitories and housing facilities as a means to recruit new workers and retain the young ones that they have.

While many companies shuttered their employee dorms late in first decade of the 2000s, such residences are enjoying a renaissance of sorts in recent years, a trend that has benefits for both sides. Companies scrambling to fill their work force attract employees who are provided places to live amid persistently high housing prices.

“I became good friends with an older employee from another department in the dorm, and the advice he gives me is very reassuring,” said a 24-year-old male employee at major trading house Itochu Corp. “And I can also save on my living expenses.”

Itochu previously had four dorms spread out in different locations before it opened a central dormitory in Yokohama for male employees in March 2018 . About 230 workers reside in the new facility, which has a large communal bath, dining room and sauna. The company plans to open a residence for female employees in 2025.

MUFG Bank plans to tear down and rebuild its large dormitory, located in Shinjuku Ward, Tokyo, in the autumn of 2025. Its dorms typically have shared baths and toilets, but each room in the new facility will have its own bath and toilet — a nod to a new generation that places importance on privacy.

To encourage interactions between residents, the blueprints feature a laundry area that includes a cafe with large TV screen, allowing for them to view big sporting events together. There will also be booths for on-line working.

At a time when inflation is pushing up housing costs in central Tokyo, the fees for living in the dorm will be “about half” that of rent at similar residences in the surrounding area, a company source said.

“More time will be spent in the dorm than in the office. This is an essential investment for improving our ability to attract workers,” said an official at MUFG Bank.

According to research by the National Personnel Authority, 41.6% of firms provided company housing in fiscal 2022. This marked a drop from 63.9% in fiscal 2004, as businesses trimmed their employee benefits, but has leveled off in recent years. Among companies, there is a noticeable movement to improve the quality of their dormitories.

A survey by job information agency Mynavi Corp. found that about 40% of job-hunting students sought “a dorm / company housing” among a potential employer’s work conditions and benefits — a figure that eclipsed “short working hours” and “child-rearing support.”

The manufacturing industry is seeing a trend of companies building dorms near their regional production bases.

In 2023, major electronic components maker TDK Corp. opened a dormitory in Yurihonjo, Akita Prefecture, where its largest domestic factory is located. A communal building houses a cafeteria that serves dishes made with locally grown vegetables, and is also open to the community. The company jointly hosts events there with a local junior high school.

The prefecture’s declining population has made filling jobs a challenge, so TDK has expanded its recruitment efforts across the entire Tohoku region. “We hope that community exchanges will make people become fond of areas they don’t know much about,” a company representative said.

Kazutaka Kobara, a researcher at the NLI Research Institute, said, “At this time when a growing number of workers leave their jobs after a short time, comfortable company dormitories will help in retaining younger employees. Companies will need to come up with ways to increase the appeal of their dorms, even as the buildings age over the years.”