Learners of Japanese soon run into the phrase “shou ga nai”. Roughly translated as “it can’t be helped”, it neatly sums up a fatalistic philosophy in tune with a nation beset by earthquakes, tsunami, volcanoes and typhoons.
Until recently, Japan’s record on gender equality also fell into the “shou ga nai” category. Even with a rapidly ageing population and the need to boost productivity, too often the role of women in business has been a passive one. In spite of repeated attempts to increase female workforce participation, Japan Inc remains overwhelmingly a man’s world.
A recent report on female board representation commissioned by BNY Mellon and its boutique Newton Investment Management underscores this view. On average, from 2004 to 2013, the report found that the percentage of women on Japanese corporate boards was just 2.4 per cent. For Russia, in contrast, that figure was 4.2 per cent, for India it was 5.3 per cent, and for Brazil it was 10.5 per cent. Compared to developed countries, Japan’s showing is even worse. Female participation on French boards was 15.4 per cent, in the US it was 15.9 per cent, and in Norway the figure was 39.5 per cent.
Other research points to the same conclusion. The World Economic Forum’s Global Gender Gap Report, which considers a range of factors such as health, education, and economic participation, ranked Japan 104th out of 142 countries in 2014. That represents marginal progress on 2013’s 105th place, but is still way down on the country’s 2006 ranking, when Japan came 80th.
These figures demonstrate how far Japan has fallen behind its global peers. While other countries have forged ahead, Japan has been treading water at best.
Nonetheless, recent events do suggest that attitudes are beginning to change. In 2013, as part of his “Abenomics” economic reform package, Japanese Prime Minister Shinzo Abe listed the promotion of women in the workforce as a key government target. One aim is to lure back working mothers by increasing the number of nursery places for children. Behind the scenes, there is also anecdotal evidence of growing pressure on companies to do a better job of hiring and promoting women. Overall, the goal is to boost their workforce participation rate to around 73 per cent by 2020.
Aside from government intervention, other factors may be just as effective in driving up gender equality. Foremost is the combination of a low birthrate and a rapidly ageing population. Japan’s working age population peaked in 1995 and has been in decline ever since. Likewise, 2014 saw a record low for new births.
The effect, exacerbated by an economic resurgence as Abenomics begins to take hold, is a growing labour shortage. In February 2015, the job offers to applicant ratio was 1.15, the highest ratio since 1992 according to commentators, indicating a tightening of the labour market.
This means that companies are already finding it difficult to reach annual quotas for new graduate hires. In the service sector, a beef bowl chain and some izakaya pubs have been unable to hire staff and are now facing closure.
For women, this labour shortage could be considered good news. Already, the percentage of female graduates receiving job offers has overtaken that of men for the first time. Elsewhere, companies are beginning to adopt more family-friendly HR policies, such as banning overtime, in an effort to lure mothers back into the workforce. This is especially the case in sectors where late evenings and working weekends have tended to be the norm but where the labour shortage is now beginning to bite.
Until recently, the thinking was always: why offer jobs to women when so many men are still unemployed? Now companies are shrinking because they simply can’t hire enough of the right people. They’re finally beginning to realise that hiring more women is not just a headline-grabbing luxury but essential if they want to survive.
For Japan Inc, it seems, the days of a “shou ga nai” approach to gender equality may be coming to an end.