Japan’s Small Companies Slow to Adopt Teleworking

By Fumihiko Abe / Yomiuri Shimbun Senior Writer

18:32 JST, February 27, 2021

The resurgence of coronavirus infections and the declaration of another state of emergency for some prefectures has once again highlighted the importance of telecommuting as a means for workers to avoid the Three Cs. Large companies have been increasing the number of telecommuting employees, but the rate of implementation nationwide has been sluggish. There is a noticeable gap between big and small firms.

Reducing commutes

Kazuya Gonaigawa was looking at a computer, separated from coworkers by an acrylic board on a desk. Gonaigawa is a section manager at Mizuho Bank’s Chiba branch, but he was working at a satellite office in the bank’s Kichijoji branch in Musashino, Tokyo.

Gonaigawa has been commuting from his home in Shinjuku Ward, Tokyo, to Kichijoji about two days a week since early January.

“The commute is much shorter than going to the Chiba branch, and there’s also less risk of getting infected on crowded trains,” he said. “Plus, I can concentrate on my job better here than at home,” he added.

In November last year, Mizuho Financial Group Inc., including its three subsidiaries, announced a policy to raise the telecommuting rate for employees working at its headquarters to 25% on a regular basis. The company plans by the end of March to set up satellite offices in 11 locations around Tokyo for employees who hope to work there.

The Japan Business Federation (Keidanren) conducted a poll in mid-January on companies with operations in the 11 prefectures where a state of emergency was declared, and 90% of the 505 companies that responded said they had implemented telecommuting.

Yoshihisa Masaki, director of Keidanren’s Social Communication Bureau, estimated that these measures reduced the 1.35 million employees who usually commute in the 11 prefectures by 65%.

Although this does not reach the central government’s request for companies to reduce physical attendance by 70%, it is by no means a poor result.

Many companies also implemented telecommuting last spring when the government declared a state of emergency. When asked about their efforts since then, most companies said they have developed information systems and telecommunications environments, in addition to reviewing the content and processes of the work.

Keidanren’s Masaki said, “The environment has been developed, and the quality of work is improving.”

In a poll conducted by Keidanren last summer on matters to be emphasized in future discussions between workers and employers — excluding wages — “the introduction and expansion of telecommuting” topped the list cited by 56.5% of respondents, followed by “a reduction of overtime work” at 40.8%. This looks to be a focal point in the spring labor wage negotiations.

SMEs slow to adopt

In a poll conducted in mid-January by the Japan Productivity Center on employees aged 20 or older, the nationwide telecommuting rate stood at 22%, compared to 31.5% in May last year. The low figure for January was probably due to the fact that the state of emergency was not declared nationwide and schools were not closed.

The telecommuting rate is higher in large cities such as Tokyo.

There is also a big gap between large companies and small and medium-sized enterprises, known as SMEs. According to a Tokyo metropolitan government poll, the telecommuting introduction rate at companies with 30 to 99 employees was 47%, about 30 percentage points lower than the figure at companies with 300 or more employees.

The telephone counseling service at the Japanese Trade Union Confederation (Rengo) since last spring has received a large number of calls concerning telecommuting.

The service has received comments such as: “I’m required to go to the office even though telecommuting is available. My company says the main focus [of the state of emergency] this time is the restrictions placed on eating and drinking establishments.” Another person said, “As a reason for not approving telecommuting, my company said that fewer people coming to the office causes anxiety.”

Akira Nidaira, Rengo’s executive director of the Department of General Planning, said, “Many SMEs find it difficult to invest in telecommuting and are less likely to do so due to labor management concerns.

Nidaira also said Rengo has received the following complaint: “Companies don’t financially support telecommuting. They’re only cutting expenses.”

“Middle management at SMEs has a limited track record with telecommuting, and there are deep-seated worries about whether work will proceed smoothly,” said Shota Nakagawa, president of Caster Co., which supports remote work. “Small companies don’t face as much pressure as large companies in reducing the number of employees coming to the office. This fact also seems to affect the low telecommuting rate,” Nakagawa said.

There are several problems that have been pointed out regarding telecommuting:

■ Non-regular and temporary employees often do not qualify.

■ It frequently leads to long working hours.

■ Communication is difficult.

■ Appraising an employee’s performance is difficult.

■ There can be excessive monitoring via information technology.

■ There is insufficient information security.

A report on telecommuting compiled by the Health, Labor and Welfare Ministry in December emphasized that examples of SMEs introducing telecommuting should be made well-known.

The Tokyo metropolitan government and others are providing financial support for companies to procure information technology equipment.

It is necessary to show examples of advanced approaches to SMEs and steadily expand them.

The right mix

In 2016, the central government put telecommuting in the limelight as part of its “work style reform” policy.

However, with the exception of a few tech companies, telecommuting has been seen as a work style for employees who are raising children or taking care of family members. A Cabinet Office poll found that only about 10% of companies embraced the government’s initiative.

But the coronavirus pandemic changed everything. Telecommuting has moved ahead in response to the government’s appeal to avoid the Three Cs — closed spaces, crowded places and close-contact settings — and reduce the flow of people.

Telecommuting expanded dramatically in Europe last year. In Germany in 2019, one in 10 people telecommuted, but that figure jumped to one in four in 2020.

What was peculiar to Japan was that many have pointed out that productivity has declined.

“Productivity didn’t become a problem in Europe,” said Keiichiro Hamaguchi, research director general at the Japan Institute for Labor Policy and Training. “Work advances through teams in Japanese companies and each individual’s tasks are less clear, so telecommuting is difficult to fit into that chemistry,” he said.

The common employment system in Japan is to train workers to perform many jobs. However, the key to adopting telecommuting is whether a Western-style employment system, in which specialized personnel are assigned specific tasks, will spread.

“The original purpose of introducing telecommuting was to increase productivity, but now the priority is to mitigate infections and keep business going,” said Michiko Ikeda, director of Keidanren’s Labor Policy Bureau. “The challenge is to find the best mix of workers at the office and telecommuting for each company and department,” Ikeda said.