Approximately 70% of companies in Japan will implement pay-scale increases in fiscal 2024, reports the Japan Times, citing a survey by the Finance Ministry. The survey was conducted from March to April, receiving answers from around 1,100 companies throughout Japan. According to the survey, the proportion of companies planning to raise their pay-scales stood at 70.7%, up by 6.3% from the previous year. The proportion of such companies rose 8.8% to 63.1% among small and medium-sized firms, outpacing a 3.2% increase among large companies.

Meanwhile, companies planning to implement pay-scale increases of 3% or more accounted for 59.8%, up 23.4% from the prior year. Companies at which pay-scale hikes and regular pay increases will total 5% or more came to 36.5%, nearly doubling from the previous year. “Raising employees' motivation to work, improving working conditions and preventing employees from quitting" was the most common reason for pay hikes, followed by "responding to rising prices" and "securing new employees."

The survey also showed that about 40% of firms were struggling with labour shortages even after raising wages. Meanwhile, 50.2% of small and medium-sized firms said that they had been unable to pass on rising labour costs in their product and service prices, partly due to a lack of understanding from their clients.