Toyota “re-employs until age 70” and works for 10 more years after retirement

2024-05-09 10:19:21

Japan responds to low birth rate and aging population by increasing retirement age
Expansion of re-employment from 65 to 70 from August… Ages 60-65, no unreasonable wage cuts
Japanese government: “Companies strive to employ people until the age of 70”… Solve labor shortage by increasing hiring of elderly people

Toyota Motors, Japan’s largest company with a market capitalization of approximately 515 trillion won, has decided to introduce a system that will allow 65-year-olds who are retiring to work until they are 70 years old. Considering Japan’s legal retirement age (60 years old), this effectively means that you will be able to work for 10 more years after retirement age.

Japan, which has suffered from a low birth rate and aging population for a long time, considers solving the labor shortage a national task. To this end, the retirement age has been gradually raised over several decades since the 1980s, and employment promotion measures for the elderly have been encouraged. In particular, by increasing re-employment, we are trying to achieve both corporate growth and job expansion for the elderly.

● “Re-employment until age 70 if desired.”

According to the Asahi Shimbun on the 8th, Toyota will revamp its personnel system and increase the re-employment age from 65 to 70 from August of this year. All occupations are eligible. Working conditions, such as wages, are determined individually in accordance with the current re-employment system.

It was also decided to improve the treatment of rehired employees aged 60 to 65. Previously, employees who wanted to reach retirement age of 60 were rehired, but if they did not hold a position higher than a manager, their wages were reduced by less than half. We plan to change this and from now on, we will not cut wages unreasonably, taking into account contributions to the company, etc.

Even under the current system, about 80% of employees reaching retirement age in their 60s accept a pay cut and sign a re-employment contract. However, if you look at it the other way around, about 20% of people leave the company. From the perspective of suffering from a labor shortage, they believed that it was important to retain these workers and began to improve the conditions of re-employment contracts.

Toyota is the world’s largest automobile company, selling 11.23 million units in the global market last year. We are pursuing a ‘multi-pathway’ strategy of investing in all areas, including internal combustion engines, hybrids, electric vehicles, and hydrogen vehicles. As a result, there is a huge burden due to labor shortages at development and production sites. In addition, as certification fraud and quality problems at subsidiaries such as Daihatsu emerged, the importance of securing talented individuals increased.

In addition, last year’s operating profit was 5.3529 trillion yen (about 47 trillion won), making it the first Japanese company to achieve an annual operating profit of 5 trillion yen. This means that there is room to re-employ the elderly. Toyota President Koji Sato emphasized at the press conference announcing the financial statements that day, “We will invest 380 billion yen (approximately 3.34 trillion won) in human capital.”

● Mazda-YKK are also actively rehiring senior citizens

The proportion of Japan’s working-age population (ages 15 to 64) reached 68.2% in 2000. However, it is decreasing significantly every year, reaching 59.5% last year. Instead, the proportion of the population aged 65 or older is expected to increase from 17.4% in 2000 to 37.7% in 2050.

To cope with changes in demographic structure, society as a whole is actively hiring older people. The retirement age was increased from 58 to 60 in 1998, and in 2006, a system was introduced mandating employment of people aged 65 or older. Companies must choose to extend or abolish the retirement age or rehire. In addition, companies have been obligated to make efforts to hire people until the age of 70 by 2021.

As a result, many companies, including Toyota, are promoting the extension or abolition of retirement age and improving the treatment of senior employees. YKK, famous for manufacturing zippers, eliminated the retirement age system in 2021, and Mazda, another automobile company, raised the retirement age from 60 to 65. In a poll conducted last year by the Nihon Keizai Shimbun, 66% of adults aged 18 or older said they would work after the age of 65.

Tokyo = Correspondent Lee Sang-hoon [e-mail]

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2024-05-09 10:19:21