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U.S. News
06 January 2025

Countries Compete For Skilled Workers Amid Labor Shortages

Nationwide reforms highlight the importance of foreign talent for economic growth and innovation.

The competition for skilled workers is heating up on a global scale as several countries, including the United States, Japan, New Zealand, and South Korea, introduce reforms and initiatives aimed at attracting and retaining foreign talent. Amid rising labor shortages and fierce economic pressures, these nations are recognizing the invaluable contributions of immigrants to their economies.

Recent events highlight the vibrant discourse surrounding immigration policies, primarily focused on work visas. The H-1B visa program, pivotal for importing skilled foreign labor, has come under scrutiny, yet it remains widely supported among technology giants who argue for its necessity to drive innovation. According to the American Immigration Council, skilled foreign workers play a significant role in the U.S. labor market, particularly within science, technology, engineering, and mathematics (STEM) fields.

The current H-1B visa program allows U.S. employers to hire foreign professionals for specialty occupations which, by definition, require at least a bachelor’s degree. This program has faced backlash from some political factions who argue it undermines American wages. Nonetheless, many tech companies like Tesla and IBM continue to demand these visas to fill high-skill positions, especially as unemployment rates remain low. Billionaire entrepreneur Elon Musk recently weighed in, emphasizing the tech industry’s need for such workers. “The number of people who are super talented engineers AND super motivated in the USA is far too low,” he remarked, reflecting the sentiments of many within the tech community.

Simultaneously, Japan is tackling its share of labor challenges due to declining birthrates and stagnant wage growth, leading to labor shortages particularly pronounced within several sectors such as manufacturing and healthcare. With rising numbers of foreign workers leaving due to dissatisfaction—often tied to lower pay and demanding workplace conditions—Japanese companies are stepping up efforts to improve employment conditions for these individuals to create inviting workplaces.

Eat & Holdings Inc., which oversees operations including the Osaka Ohsho chain of restaurants, is utilizing significant measures to retain its skilled foreign workforce. They offer furnished accommodations, language courses, and assistance with resolving personal issues—an approach aimed at reinforcing workers' connection to their company. “We want to always be there to resolve any problem at an early stage,” said Nguyen Thi Quynh Trang, who works on the company’s human resources team and supports over 370 foreign employees. Their strategy underlines the importance of comprehensive support, acknowledging the significance of both financial and emotional welfare.

Such efforts reflect Japan's broader legislative changes aimed at attracting foreign talent. The country plans to admit approximately 820,000 foreign skilled workers by the end of the next five fiscal years. Reforms introduced aim to streamline the visa application process and expand eligible sectors, marking significant shifts from their traditionally insular labor policies.

Meanwhile, South Korea has announced plans to issue 35,000 visas for skilled foreign workers across various industries such as construction machinery and automotive parts manufacturing. The Ministry of Justice emphasized its strategy to tackle labor shortages through careful analysis of sector demands and worker influx, stating, “We will create a virtuous circle structure so the entry of foreign labor boosts the mid- to long-term industrial competitiveness.”

These strategic decisions are rooted not only in economic necessity but also reflect shifting societal perceptions of immigration. Increasingly, countries recognize skilled foreign workers as integral to enhancing national productivity and fostering innovation. The evidence is clear: Many sectors are struggling to find skilled labor domestically, and opening doors to foreign talent may be the solution.

Still, with skilled workers also facing personal challenges—such as family dynamics and cultural adaptation—employers need to offer comprehensive support options beyond just job opportunities. Programs aimed at fostering community engagement and providing proper resources can ease transitions for foreign workers and significantly impact their satisfaction and retention rates.

Overall, the global competition for skilled labor is not just about numbers. It's also about creating work environments where foreign talent can thrive. Countries are beginning to acknowledge the societal and economic value brought by skilled workers from abroad. This shift signifies a broader recognition of the role immigration plays within the global labor market, helping to break down barriers and build pathways for collaboration, innovation, and sustainable economic growth.