Major companies are undergoing a significant transformation in their compensation systems and employment structures. Reports have highlighted Daiwa House Industry’s increase in starting salaries for new graduates and Shionogi’s abolition of its de facto mandatory retirement system, while the shift to AI is also affecting hiring trends.
A comparison of major homebuilders shows how compensation systems are changing. Daiwa House Industry raised starting salaries for new graduates by ¥100,000 to ¥350,000 and abolished the winter bonus, standardizing payments through monthly salaries. Sekisui House is expanding overseas sales by leveraging its strengths among the ultra-wealthy and is also attentive to employee benefits, while Open House has built a structure that can more readily capture demand from middle-income buyers, seeking to balance performance-based pay with stability. These developments indicate that companies are restructuring their compensation models in line with their medium- to long-term strategies.
Shionogi abolished its de facto mandatory retirement system and introduced a system under which employees continue to be evaluated and contracted as regular employees after age 65. Together with the government’s policy of promoting employment through age 70, this points to a shift toward personnel evaluations that place greater emphasis on ability and performance rather than age alone.
The use of AI in operations at major banks, life insurers and securities companies is moving in the direction of curbing new hiring. While retaining highly specialized personnel in frontline roles, companies may increasingly limit hiring, including of younger workers.
In frontline operations, including in the United States, cases are increasing in which human expertise commands higher earnings in areas beyond the tasks AI can handle. Japanese companies are also shifting toward real-time assessments at the entry, mid-career and exit stages, strengthening treatment based on ability and performance.