Daiwa House Industry, one of Japan's leading construction companies, recently announced substantial raises for new graduates as well as existing employees, aimed at combating labor shortages and addressing inflationary pressures.
On January 20, the company revealed plans to raise the starting salary for new graduates by 100,000 yen, bringing the monthly salary for university graduates to 350,000 yen starting April 1, 2025. This increase constitutes approximately 38 to 43 percent more than previous levels.
Further supporting its employees, Daiwa House plans to also raise the average annual salary of about 16,000 regular employees by 10 percent. The adjustments reflect not only the company's aim to secure talented individuals amid persistent recruitment challenges but also its commitment to improving employee welfare against the backdrop of rising living costs.
Specifically, starting salaries for master's degree graduates will rise to 362,000 yen per month, with technical college, specialized school, and junior college graduates receiving starting salaries of 332,000 yen per month. This salary overhaul touches about 16,000 regular employees, signifying the company's extensive commitment to enhancing its workforce compensation.
Daiwa House is not just increasing salaries; it's also restructuring how employees receive their payments. The company's strategy includes reducing the average bonus from 4.9 months of salary to roughly 3.7 months, allowing for a significant 23.5 percent increase to base salaries. The aim here is to create a stable compensation plan less influenced by company performance, thereby giving employees more predictable earnings.
This move is particularly significant as Japan faces deepening labor shortages across various industries, especially construction. According to company representatives, these wage adjustments are part of efforts to attract skilled talent and retain existing employees, encouraging them to meet the future demands of the sector.
With these changes, Daiwa House hopes to strengthen its position as not just an employer but also as a leader within the construction industry, offering competitive salaries and secure employment conditions. By fostering such improvements, Daiwa is making strides toward ensuring stability and enhanced operational performance, providing employees not only with increased financial benefits but also with peace of mind.
Reports indicate this is the highest pay increase rate seen since the fiscal year 2000 within the company and reflects broader trends of wage growth as industries strive to remain competitive.
While some may question the sustainability of these increases amid fluctuatiing economic conditions, Daiwa House appears resolute, focusing on long-term growth and stability. The firm's latest salary adjustments serve as both a structured response to current economic conditions and as proactive measures to secure its future workforce.
Conclusively, Daiwa House Industry's decision to raise salaries signifies more than just financial incentives; it marks a potential shift within the construction sector's approach to employee retention, job satisfaction, and overall market stability.