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Will the Japanese workplace advance or retreat after Covid-19?

New practices introduced as a direct result of the pandemic could lead to a long-term shift in how Japanese companies flex towards new ways of working, according to a major report

Traditional barriers in the Japanese workplace to adopting more flexible ways of working have been broken down by the coronavirus pandemic, opening a vigorous debate about the future of work in Japan, according to a new research report by Tokyo’s Xymax Real Estate Institute.

The report gives a stark insight into the scale of disruption at the height of the crisis as the Japanese government recommended companies to introduce off-peak commuting and telework, and instructed office workers to stay at home as much as possible to avoid physical contact with others.

‘The first comprehensive picture of what is currently happening in Japan…’

Xymax conducted a nationwide survey of companies across Japan in June 2020 just after the state of emergency was lifted, as well interviewing 30 registered users of its own corporate satellite office service. Its report, ‘Companies’ Workstyles and the Workplace under the Corona Crisis’, provides the first comprehensive picture of what is currently happening in Japan amid Covid-19. Tokyo is one of the world’s largest real-estate markets.

Switch to flexibility

The two most popular measures taken by Japanese companies in response to the pandemic were working from home (91.5 per cent of the survey) and off-peak commuting (76.6 per cent). Unsurprisingly, the larger the company, the more these measures were implemented.

The telecommunications sector topped the list of those industries that found it relatively easy to implement flexible working practices; the medical and welfare sectors found it the hardest, but still managed to introduce flexibility for more than half of their workforces. Of the Japanese companies that implemented work from home as a measure against the coronavirus, the study found that nearly two-thirds were doing so for the first time. A further 30 per cent were expanding or accelerating work-from-home schemes.

A third of companies that introduced satellite offices to their real-estate portfolio during the crisis were doing so for the first time. Reasons to do so included reducing commuting time for employees juggling childcare duties while schools were shut. More small and medium-sized companies (with less than 1,000 employee) turned to satellite offices during the crisis, which have typically the preserve of large firms in the past due to cost.

A retreat from the new?

Once Japan’s lockdown restrictions were eased in June, many small and medium-sized companies eased or discontinued their work-from-home policy in a retreat from flexible working. In contrast, larger firms stuck with the policy, especially in the Tokyo area, signalling that there could be significant changes in Japanese corporate office supply in the medium to long term.

Japanese companies were split fairly evenly in percentage terms between those who said they were able to implement measures against Covid-19 ‘without difficulty’ and those who said they struggled. The biggest challenge described by participants in the survey was ‘work that cannot be done at home’ (77.3 per cent of companies) followed by ‘inadequate paperless environment’ (45.9 per cent) and ‘inadequate means of electronic approval’ – an indication of Japan’s traditional adherence to a ‘seal culture’ of approvals and its lack of digital transformation in terms of processes.

Future of work in Japan

A decrease in communication and lack of employee motivation were also factors among companies struggling to cope – interviews revealed problems with connectivity in the home environment. But perhaps the report’s most significant findings relate to the future of work in Japan. Nearly half of Japanese companies (46.5 per cent) believed the future direction will be a blend of office work and remote working; only around a quarter thought the Japanese workplace would return to its pre-coronavirus status quo.

‘Much more has to be done around hygiene and social distancing…’

Tokyo and Nagoya were the two cities keenest on a blended approach. The smaller the company, the more likely they were to think the old ways would return after the virus. Generally, there was little or no appetite for expanding the main office. Just over half of all respondents (56.4 per cent) said their offices were safe and secure with the right anti-infection measures in place – a lukewarm result that suggests much more has to be done around hygiene and social distancing.

The Xymax report concludes that ‘the jury is still out whether work style evolution will happen at all companies that introduced working from home’. However, it argues that ‘the downsizing of the main office with the intention of using telework’ could accelerate due to the need to cut costs on the back of the economic slowdown in Japan caused by the coronavirus crisis. Access the full report from the Xymax Real Estate Institute here.

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