Firms in Japan struggle to hire people with disabilities at legally mandated rate

From The Mainichi

September 6 2022

TOKYO – Many companies in Japan are finding it hard to maintain the legally mandated employment rate for people with disabilities as those hired during the 1970s and 1980s begin to reach retirement age, a Mainichi Shimbun survey has revealed.

The statutory employment rate of people with disabilities imposed on companies in Japan is being raised year by year, and firms even compete to hire people with lower levels of disabilities.

The Mainichi Shimbun conducted the survey on 126 major companies from early June to early July regarding employment of people with disabilities, and 104 companies responded (an 82.5% response rate).

Companies became more active in hiring people with disabilities after a bill to revise the law for the facilitation of employment of physically disabled people was enacted in 1976, which stipulated for the first time a mandatory employment rate for them. The law requires that among companies’ full-time workforce, people with physical disabilities must make up at least 1.5%, and if they fail to achieve this target, they will be required to pay a fine.

It is believed that many of those hired at that time have reached or are approaching the retirement age of 60 to 65. When asked in the survey whether “a certain number of employees with physical disabilities who have reached middle age or older have retired or are expected to do so soon,” 45 companies responded “yes,” accounting for more than 40% of the total.

The government reviews the statutory employment rate every five years in principle, and in addition to raising the rate, it also expands the scope of the target group. In 1998, people with intellectual disabilities were included in the calculation, and in 2018, people with mental disabilities were added, and the statutory employment rate for people with disabilities rose to 2.3% in 2021 for companies employing an average of 43.5 or more people.

Forty-three companies responded that “it is difficult to recruit workers (with disabilities) to make up for those retiring and maintain the legally mandated employment rate,” indicating that they are struggling to secure human resources.

The labor policy council, an advisory body to the labor minister, is currently discussing a review of the system for the employment of people with disabilities. Of the respondents to the survey, 76 companies, or over 70%, wanted to maintain the status quo, while four companies requested a reduction from the current level.

Of the individual responses, one manufacturer noted, “As we increase the number of our employees due to business growth, we feel that we will face challenges in securing the number of people with disabilities to maintain the statutory employment rate.”

Another large company said, “We believe that the market for hiring employees with disabilities will be depleted and hiring them will become more difficult.”

According to statistics, as of 2021, there were approximately 600,000 people with disabilities employed in the private sector, with those with physical disabilities accounting for 60%, intellectual at 24%, and mental at 16%. As the number of those employees increases and the target group expands, the proportion of those with physical disabilities is decreasing, while that of those with intellectual and mental disabilities is on the rise. 

In addition to securing human resources, it is also a challenge to develop new jobs and support for people with mental, intellectual, and severe disabilities.

Kohei Komamura, a professor at Keio University and an expert on the employment of people with disabilities, commented, “With the shift in the industrial structure from manufacturing to services and the aging of people with physical disabilities, the focus of the hiring of people with disabilities is moving from one centering on people with physical disabilities to a new stage that includes people with mental disabilities.”

He added, “Companies alone cannot ensure both the quantity and quality of employment of people with disabilities. The government should invest in more resources to address the issue, including the enhancement of know-how and support.”