Japan’s New Residency Qualification System for Foreign Talent
In response to the growing global competition for skilled talent, the Japanese government plans to implement a comprehensive policy that will introduce a new residency qualification system for foreign workers by April 2027. This initiative is designed to attract and retain foreign expertise within Japan’s workforce.
Key Changes to Current Systems
- Abolition of the Current Technical Intern Training System: The existing technical intern training system will be phased out in favor of a new approach.
- Introduction of the Employment for Skill Development System: This new framework will cover the same industry sectors as the specified skills system, which targets highly skilled workers and was launched in 2019.
The primary objective of this reform is to systematically nurture foreign human resources and ensure their long-term integration into Japanese workplaces. The government plans to promote a related ministerial ordinance before the summer concludes, responding to the escalating global talent competition.
Background on the Technical Intern Training Program
Initially launched in 1993, the technical intern training program aimed to aid international development by providing trainees from developing countries with skills and knowledge while they worked in Japan. However, the system has faced criticism for exploitation by companies seeking inexpensive labor, leading to human rights violations such as unpaid wages and excessive hours.
Meanwhile, neighboring economies like South Korea and Taiwan have expanded their acceptance of foreign workers, intensifying the competition for talent. Japan’s allure for foreign nationals has diminished, particularly since its nominal per capita GDP was surpassed by South Korea in 2022. Consequently, Japan urgently needs significant reforms to draw competent foreign human resources.
Features of the New Employment for Skill Development System
- Training for Unskilled Laborers: Foreign nationals entering as unskilled workers will undergo a three-year training program to qualify for the specified skill Type 1 residency status, allowing them to work in Japan for up to five years.
- Job Mobility: Foreign workers will have the opportunity to change employers under specific conditions, including job transfers within the same industry, thus fostering a more favorable working environment. In contrast, the previous technical intern training system restricted workplace changes, often leading trainees to leave due to unsatisfactory conditions.
To manage excessive labor competition, the new system will impose industry-specific restrictions on job transfers for one to two years. Trainees must meet certain skill assessments and Japanese language proficiency tests to qualify for job changes. Companies accepting these trainees will be limited to reputable firms that adhere to established standards.
Focus on Rural Labor Shortages
The new system will specifically target acute labor shortages in rural areas. The maximum number of foreign workers allowed for training and employment will depend on a company’s full-time employee count. However, selected companies in rural regions will be permitted to accept up to three times the standard limit for foreign trainees.
Additionally, stricter regulations regarding job transfers to urban areas will be implemented to prevent the over-concentration of talent in cities with higher wages. This initiative aims to minimize workforce migration from rural regions and promote a balanced distribution of talent across various areas.
Limits on Trainee Transfers
At host companies, the proportion of trainees who have switched employers must not exceed one-third of the total foreign trainees. For urban companies, this limit will be even stricter, allowing transferred trainees to constitute no more than one-sixth of the total foreign workforce.
Transitioning from Technical Intern Training to Employment for Skill Development
The existing technical intern training system will gradually be replaced by the “Employment for Skill Development” system. This new framework will standardize training requirements across various industries, aligning them with the highly skilled worker skills system introduced in 2019.
The primary goal of this reform is to systematically nurture foreign human resources and facilitate their long-term integration into Japanese workplaces. The government plans to issue a related ministerial ordinance by the end of summer to support the implementation of these reforms.
Addressing Concerns with the Previous System
Established in 1993, the technical intern training program was initially aimed at fostering international cooperation by accepting trainees from developing nations. However, it has faced backlash for potentially serving as a means to obtain low-cost labor, raising concerns about human rights violations, including unpaid wages and long working hours.
In contrast, neighboring economies like South Korea and Taiwan have significantly increased their acceptance of foreign workers, heightening global competition for skilled talent. Consequently, Japan’s economic attractiveness to foreign nationals has declined, especially as its per capita GDP was overtaken by South Korea in 2022.
Urgent Need for System Reform
Recognizing the pressing nature of these challenges, the Japanese government has acknowledged the need for substantial reforms to position Japan as a more appealing destination for skilled foreign human resources. The forthcoming Employment for Skill Development system will allow foreign nationals entering as unskilled laborers to undergo a three-year training program to elevate their skills to meet Type 1 residency status, permitting them to work in Japan for up to five years.
Enhancing Mobility and Working Conditions
A significant feature of this new system is that it will allow foreign workers to change employers under certain conditions, such as job transfers within the same industry sector, thereby improving their working conditions. Under the previous technical intern training system, trainees were generally not permitted to switch workplaces, which contributed to a decline in their ability to tolerate unsatisfactory working conditions.
To mitigate intense competition for labor among companies, the new system will introduce industry-specific periods of one to two years during which job transfers will be restricted. To qualify for these transfers, trainees must meet specific criteria related to skill assessments and Japanese language proficiency. Participating companies will be limited to reputable firms that adhere to established standards.
Moving Forward with Policy Formulation
Following the establishment of this foundational policy, the government has begun drafting detailed operational guidelines that will define specific regulations for sectors employing foreign trainees. The government anticipates adopting these policies by the end of the year after consultations with an expert panel, thereby finalizing the new Employment for Skill Development system.
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Source: NHK website and article on NHK
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