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Japan – Government to subsidise temp-to-perm staffing

04 February 2014

The Japanese government has decided to start providing subsidies for ‘temp-to-permanent staffing’ in fiscal 2014 to improve employment situations for young people, reports the-japan-news.com.

Under the new subsidy system, the government will pay cash rewards to staffing agencies if workers gain permanent jobs through the temp-to-permanent staffing service. The system aims to support young people who have difficulty obtaining regular employment even after graduation.

It is assumed that young people, such as those who cannot find jobs a year after graduating from university, will take advantage of the new system and the service will be offered free of charge.

The government will divide the nation into five regions, and each region will create consigning contracts with staffing agencies. In Japan, staffing agencies offer basic training; such as work etiquette and computer skills and introduce companies to job seekers, as well as providing other support; including individual consultations during a maximum six-month period as a temporary worker to help temporary staff obtain regular employment.

The government will shoulder part of the expenses for basic training to be provided by the staffing agency, while at the same time paying the agency a cash reward of about JPY 100,000 (USD 981.57) per person for successful placements, when a temporary worker is employed as a regular worker by the company to which he or she was assigned.

The government will allocate JPY 4.3 billion (USD 42.2 million) for these programmes in a supplementary budget for fiscal 2013. After the supplementary budget is passed, the government plans to launch these programs sometime before the summer.

According to the Health, Labour and Welfare Ministry, the percentage of spring 2013 graduates that had found jobs by 1 April 2013 was 93.9%. But at the same time, nearly 30% of recent graduates who found jobs quit them within the first three years, giving rise to problematic mismatch between graduating students and companies that employ them.

According to a senior official at the labour ministry, there has been an increasing divide between two groups of new college graduates: those who become regular employees and those who remain non-regular workers.

The government hopes to avoid such mismatches by using a probationary employment period, where temporary workers are assigned to a company by a staffing agency with the possibility of becoming regular workers in the future.

The government intends to give full support to those young people who are seen as difficult to immediately employ as regular workers, utilising the know-how of staffing agencies, including efforts ranging from job training to job placement services.

According to the labour ministry, 25,927 people had been employed as regular workers in fiscal 2011 after being assigned to a company by staffing agencies with the future possibility of becoming regular workers. The government wants 7,500 young people to find regular jobs through the new system over the next three years.

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