Japanese Small, Midsize Firms Increasingly Employing Foreign Workers; Effort Aims to Secure Talented Employees

By Shunsuke Tanaka / Yomiuri Shimbun Staff Writer

1:00 JST, June 1, 2025

Many small and midsize companies are actively hiring foreign workers. Of the 2.3 million foreign workers employed in Japan, more than 50% work for companies with under 100 employees.

This situation comes amid a serious labor shortage in Japan, and issues have surfaced such as a concentration of foreign workers in big cities and their worsening working conditions.

Koganei Seiki Co., a manufacturer based in Iruma, Saitama Prefecture, which primarily produces engines for motor sports, has 40 Vietnamese workers among its about 300 employees.

All the Vietnamese employees hold visas for highly skilled workers named “Engineer / Specialist in humanities / International services.” They operate the manufacturing equipment and program the process for manufacturing parts.

“They graduated from top-class universities in their country and have high-level capabilities,” said Yusuke Kamoshita, president of the company.

Todaya, a long-established ryokan Japanese-style inn in Toba, Mie Prefecture, employs 37 foreign workers from 11 countries, including China and Myanmar. Some are technical intern trainees, while others are specified skilled workers.

Many of them are fluent in English and thus are valuable for serving foreign tourists.

“It is important how our guests feel. So, I taught them the manners, etiquette and culture [of Japan],” said President Junzaburo Terada.

According to the Health, Labor and Welfare Ministry, the number of foreign workers in Japan increased from 787,000 in 2014 to 1.658 million in 2019. It increased again to 2.302 million in 2024.

In 1993, the government introduced the technical intern training program so that foreign workers could acquire job skills at companies in Japan and bring those skills back to their home countries.

Of the about 2.3 million foreign workers, about 470,000 are technical intern trainees who are facing problems such as long working hours and nonpayment of wages. According to the Immigration Services Agency, the number of missing trainees in 2023 reached a record high of 9,753.

To address such problems and encourage foreign workers to work in Japan for longer, the government will abolish the technical intern trainee system and create a new “training and employment” resident status by 2027.

Technical intern trainees are not permitted to change jobs until they have worked at a single company for three years, but in the new category, foreign workers will be allowed to move to other companies after one to two years. However, it is likely that companies in eight prefectures, including Tokyo and Osaka, will be restricted from employing the new category of workers if they are changing jobs from rural areas.

As of 2024, the number of foreign workers in Tokyo was 585,000, 25.4% of the total; 229,000 in Aichi Prefecture, accounting for 10%; and 174,000 in Osaka Prefecture, accounting for 7.6%. The figures show a tendency of foreign workers to concentrate in big cities. Akita Prefecture had the smallest number of foreign workers with 3,536, or only 0.2%.

According to an estimate by the National Institute of Population and Social Security Research, Japan’s working age population, which is between the ages of 15 to 64, will likely decrease from more than 75 million in 2020 to 55.4 million in 2050.

“There is a serious labor shortage, mainly in the transportation and nursing care sectors,” said Tomoya Suzuki of the NLI Research Institute. “To maintain Japan’s society and economy, we need to have a perspective on how Japanese and foreign workers can coexist in harmony.”