Staying Ahead in Japan’s Talent Retention Game: Insights for Foreign Companies, 2025

January 21, 2025

Attracting and retaining top talent is a growing challenge for companies in 2025. According to insights from our Salary Guide and LinkedIn surveys, this has become one of the most significant issues organizations are grappling with. So, what can businesses do to not only retain a high-performing workforce but also stand out to top talent amidst increasing competition?

1. Embrace Hybrid Work Models

The shift to remote work during the pandemic has fundamentally changed how employees approach their jobs. Many have established routines that enhance their productivity and work-life balance. As a result, employees are now more accustomed to working from home and may resist a full return to the office. While employers may have legitimate reasons for wanting teams on-site, finding a mutually beneficial agreement on hybrid work will be essential. Flexibility will be key to retaining talent, as it allows businesses to balance the need for in-person collaboration with the benefits of remote work.

2. Offer Competitive Compensation

While salary is not the sole motivator for employees, it is undeniably critical. Employees who feel underpaid are more likely to seek opportunities elsewhere, while overpaying can strain company finances and affect overall sustainability. Regular compensation reviews are necessary, particularly in regions like Japan, where tax and insurance costs are rising. Ensuring that salaries are competitive within the industry and geography will help prevent turnover and attract high-quality candidates, keeping your workforce strong and committed.

3. Invest in Robust Training and Support Systems

As businesses adapt to post-pandemic realities, employees—particularly new hires—will need clear guidance and support. In Japan, for example, younger generations tend to rely more heavily on structured training and supervision to navigate their roles successfully. With frequent job changes and new team environments, providing a solid onboarding process and continuous development opportunities will empower employees to grow, make informed decisions, and contribute to the company’s long-term success. Training programs that foster confidence and skill development are key to employee satisfaction and retention.

4. Leverage Experienced Talent from Older Generations

In Japan, the aging population is increasingly becoming a significant factor in the workforce. With fewer younger workers entering the job market, older candidates—often with decades of experience—are seeking stable employment opportunities. Embracing this demographic offers companies a unique advantage. Older workers bring invaluable knowledge, expertise, and mentorship potential, which can be crucial for cultivating a strong, multigenerational workforce. Not only can these experienced employees contribute immediately, but they also have the capacity to mentor younger colleagues, ensuring the continuity of knowledge within the company.


By focusing on these four key areas—hybrid work, competitive pay, comprehensive training, and inclusion of older talent—companies can navigate the evolving landscape and build a workforce that is both capable and loyal in 2025 and beyond.

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