Competition, salary levels, and lack of promotion opportunities are among the main factors behind the talent challenge, according to Hays.
By Maggie Mancini
Nearly three-quarters (71%) of companies in Japan are experience a “medium to severe” skills shortage, according to research from Hays. This is the highest rate, tied with Thailand, among the six Asian economies surveyed. The survey provides a glimpse into the skills shortages facing organisations.
The study finds that 62% of recruiters in Asia will experience a “medium to severe” skills shortage in 2025, with a further 26% experiencing a mild skills shortage. When asked about the main factors behind the skills shortage, 47% of recruiters cite competition as their biggest challenge, while 33% say salary levels play a role and 27% cite lack of promotion opportunities.
The roles that companies are particularly struggling to fill are mid-level roles at 55%, followed by manager level (37%), entry/junior level (20%), C-level (13%), and director level (12%). In response to these challenges, 33% of recruiters plan HR investments focussed on employee retention, while 27% cite recruitment as a priority.
Japanese recruiters face the most severe skills shortage in Asia, tied with Thailand with 71% of companies affected, ahead of Malaysia (64%) and China (60%). Additionally, 38% of companies cite competition with other companies as the main reason for the skills shortage. More than half (56%) of companies plan to increase their workforce in 2025 to address skills shortages. Of these, 14% plan to increase their workforce by 5% to 10%, and a further 14% expect to increase their headcount by more than 10%.
Additionally, 15% of recruiters said they plan to increase headcount this year but have not yet decided on the specific percentage increase. In tandem with their hiring plans, 31% of companies are prioritising retention and focussing on securing essential talent.
Communication and interpersonal skills are the most important soft skills that companies are looking for (50%), followed by the ability to work well with others (27%) and the ability to adapt to change (25%), the report finds.
