Challenges of Logistics and Supply Chain Recruitment in Japan

A white paper By Simon Truss: Managing Partner, Top Transport Talent and Wayne Yoshida, Senior Talent Acquisition Manager at A.P.Moller – Maersk.

Recruiting for the logistics and supply chain sectors in Japan is fraught with several significant challenges. These challenges stem from demographic shifts, socio-economic factors, and industry-specific issues. Understanding these challenges is crucial for developing strategies to attract and retain talent in these essential sectors.

Demographic Challenges

Aging Population: Japan's demographic profile is characterized by one of the world's highest proportions of elderly citizens. This aging population leads to a shrinking workforce as more individuals retire, and there are not enough younger workers to replace them. The logistics and supply chain sectors, which often require physical labour, are particularly impacted by this trend.

Low Birth Rates: Persistent low birth rates exacerbate the workforce shortage. With fewer young people entering the job market, there is a limited pool of candidates to fill logistics and supply chain positions. This demographic imbalance poses a long-term challenge for workforce planning and sustainability.

Socio-Economic Challenges

Urbanization: Younger generations tend to migrate to urban centres in search of better job opportunities and living conditions. This urbanization trend leaves rural and suburban logistics hubs, which are critical for supply chain operations, understaffed. The preference for urban living makes it difficult to attract young workers to less populated areas where many logistics facilities are located.

Lack of university level Logistics and Supply Chain degrees: At a time when many developed countries offer excellent Logistics and Supply Chain Management degrees at the Bachelor, Masters and PHD level - Japan is falling behind.This has created significant knowledge gaps, in particular in Supply Chain Management disciplines such as Demand Planning, Fulfillment and Inventory Management. At a time when we see candidates coming from France, the UK, China, Australia and the USA with a Bachelor or Masters degree in Logistics and Supply Chain Management, the young talents from Japan tend to enter the industry with a background in Trade, Law or language studies which are not as vocationally relevant.

Perception of the Industry: The lack of world class Logistics education opportunities also has a negative impact on the perception of the Industry. The logistics and supply chain sectors are often perceived as low-status or undesirable career paths, particularly among younger generations, making it challenging to attract skilled new talent.

Urbanization: Younger generations tend to migrate to urban centres in search of better job opportunities and living conditions. This urbanization trend leaves rural and suburban logistics hubs, which are critical for supply chain operations, understaffed. The preference for urban living makes it difficult to attract young workers to less populated areas where many logistics facilities are located. 

Industry-Specific Challenges

Demand for Skilled Workers: Modern logistics and supply chain operations increasingly rely on technology and automation, requiring workers with specialized skills in areas such as robotics, data analysis, and supply chain management. There is a growing gap between the demand for these high-skilled workers and the supply of adequately trained candidates.

High Turnover Rates: The stressful nature of logistics work, characterized by long hours, physical labour, and high-pressure environments, leads to high turnover rates. Workers often leave for less demanding jobs, creating a continuous need for recruitment and training of new employees.

Wage Competition: To attract and retain workers, companies must offer competitive wages and benefits. However, this can be challenging for smaller firms with limited financial resources. Larger companies may also face difficulties in balancing increased labour costs with maintaining profitability.

Technological and Innovation Challenges

Pace of Technological Change: While technology can help alleviate some labour shortages, the rapid pace of technological advancement requires continuous upskilling of the workforce. Recruiting workers who are not only willing but also able to adapt to new technologies is a significant challenge.

Investment in Training: Developing and implementing effective training programs to equip workers with the necessary skills for modern logistics and supply chain roles requires significant investment. Smaller companies, in particular, may struggle to provide comprehensive training and development opportunities.

Cultural and Policy Challenges

Work Culture: The traditional Japanese work culture, which often values long working hours and seniority-based advancement, can be unattractive to younger workers who prioritize work-life balance and merit-based progression. Adapting work cultures to be more appealing to younger generations is essential for recruitment.

Immigration Policies: Japan's historically stringent immigration policies limit the influx of foreign workers who could help alleviate labour shortages. Although recent policy changes have aimed to attract more foreign talent, bureaucratic hurdles and integration challenges persist.

Strategies for Overcoming Recruitment Challenges

To address these recruitment challenges, several strategies can be considered:

Enhancing the Appeal of the Industry: Promoting logistics and supply chain careers as technologically advanced and essential for the economy can help improve their image. Highlighting opportunities for career growth and innovation can attract young talent.

Flexible Work Arrangements: Implementing flexible working hours, remote work options, and better work-life balance initiatives can make these sectors more attractive to potential employees.

Education and Training: Partnering with educational institutions to develop specialized training programs and apprenticeships can ensure a steady pipeline of skilled workers. Continuous professional development opportunities can also help retain employees.

Leveraging Technology: Investing in automation and technology can reduce the reliance on manual labour and improve efficiency. This can make the industry more appealing to tech-savvy workers.

Government Support: Advocacy for more supportive immigration policies and government incentives for training and technology investments can help alleviate workforce shortages.

By addressing these multifaceted challenges through a combination of cultural shifts, technological advancements, and strategic initiatives, Japan's logistics and supply chain sectors can enhance their recruitment efforts and build a more sustainable workforce for the future.

Whilst finding the right person is hard to find, skills can be trained. 

Top Transport Talent believes that upskilling is essential for executives to access higher level positions and to nurture a true passion for the industry. We partner with several world-renowned institutions to help fill the  current and future skills gaps in Japan.

We can help candidates to review what courses may be right for them and choose from a range of world class training options. At the end of their training, we can also help them to find their dream job.

The service is offered free of charge and offered as part of a career support package to bilingual Transport, Logistics and Supply Chain executives based in Japan.

Please see www.toptransporttalent.com for more information.