Opinion
A change in Japan’s labor market welfare policy presents an opportunity for Israeli companies
A series of social and economic shifts is leading Japan, one of the world’s largest economies, to adopt a new approach to worker welfare. To accelerate and fine-tune this large-scale systemic transformation, advanced technologies are also required. This presents an opportunity for Israeli companies operating in this field.
Japan, one of the world’s leading economies, is facing a profound paradox: on the one hand, a work culture that’s rooted in dedication, loyalty, group identity, and stability; On the other, a new generation of workers seeking flexibility, sensitivity, and well-being.
For decades, the character of the kaishain, the company man, embodied the Japanese ideal: a worker who joins an organization straight out of university and remains there until retirement. Absolute loyalty, long hours, and complete identification with the workplace were all key aspects of Japanese workers’ professional and social identity.
However, the Japanese ideal of the kaishain came with many difficulties: burnout, lack of work-life balance, lack of relationships, reduced birth rates, and deep dependence on a system that wasn’t always rewarding or considerate.
A painful phenomenon that illustrates the toll of traditional work culture is karoshi—death from hard work. Heart attacks, strokes, or suicides caused by extreme workload and chronic stress continue to serve as warning signs, even in 2025, highlighting the urgent need for deep cultural change.
Indeed, the Japanese employment model is showing cracks. In 2025, many Japanese workers report feeling burnout, loneliness, inflexibility, and a lack of personal recognition. The organizational environment tends to be formal, slow to change, and at times even abusive—especially toward women, foreign workers, and young people who wish to bring new perspectives.
The generational gap is widening: while older workers see work as a mission, younger workers seek meaning, balance, and freedom. More and more young Japanese are looking for jobs that respect work-life balance, offer a pleasant and non-abusive work environment, and allow them to be not just workers, but also human beings.
Decline in Engagement Indices: A Sign of Change
Concerned by these trends, Japanese companies and government bodies have begun conducting eNPS (employee Net Promoter Score) surveys, which measure worker loyalty and engagement. The score is based on a single question:
“How likely are you to recommend working at this organization to a friend or colleague?”
A steep decline, as seen in recent surveys, may indicate feelings of burnout, distrust, or a need for cultural change.
The survey suggests that the main challenge reported by Japanese companies is the need to retain employees. Many Japanese companies have begun to take steps to improve working conditions—raising salaries, improving the work environment, enhancing transparency, reducing stress levels, increasing personal development opportunities, and fostering a more pleasant and respectful work environment.
New Regulations: A Lever for Cultural Change
In parallel, the Japanese government is advancing far-reaching reforms that directly impact the workers’ experience:
• New restrictions on overtime: Companies are required to closely monitor work hours and implement oversight mechanisms, with increased fines for violations.
• Expanded parental leave: Workers are now entitled to longer, more flexible leave, as part of a policy to support working families.
• Mandatory ESG reporting in HR: Companies are required to disclose data on diversity, inclusion, and worker well-being in their reports—enhancing transparency and social accountability.
• Integration of advanced technologies in HR workflows: Artificial intelligence and automation are being introduced into recruitment, payroll, and management workflows, without compromising ethics and privacy.
• Promotion of diversity and inclusion: The government has set clear goals, including increasing the number of women in senior management roles by 30% by 2030.
Israeli Innovation as a Catalyst for Well-Being and Engagement
Collaborations between Japanese corporations and Israeli innovators—such as those led by NTT Israel's innovation lab—are creating new opportunities for workers: exposure to advanced technologies, work experience in multicultural teams, and accelerated personal growth.
Employee engagement isn’t a destination, it’s a journey. Japanese corporations now stand at a fascinating crossroads, where tradition meets innovation. If Israeli companies can bring together human-centered values and technological tools, they can help the Japanese build an organizational culture that promotes not just business outcomes, but also well-being, inclusion, and purpose.
Noa Asher is the CEO of NTT Israel.
