Tokyo: Daiwa Securities, Japan’s second-largest brokerage and investment bank, plans to raise wages by at least 5% in the upcoming financial year, aiming to outpace inflation and attract top-tier talent amid a shrinking labor pool. Chief Executive Officer Akihiko Ogino shared the company’s intentions in an interview with the international news agency Reuters, highlighting the critical need for competitive compensation.
“In order to secure quality talent, we have to raise wages above inflation,” Ogino stated. “Every company has a shortage of workers.”
The proposed wage increase, slated for the financial year beginning April 2025, follows annual hikes of 5%, 4%, and 7% over the past three years. Daiwa is also exploring raising the starting monthly base wage for career-track employees from 290,000 yen ($1,920) to 300,000 yen ($1,980), pending negotiations between management and employees.
Wage Growth Surpassing National Trends
This year’s “shunto” spring wage negotiations saw large Japanese firms agree to an average pay hike of 5.2%, the highest in 33 years. However, Daiwa’s anticipated increase for April 2025 would likely surpass many companies’ efforts. According to a Reuters survey conducted in October, only 9% of firms foresee wage increases between 5% and 7% for the next financial year.
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Addressing Workforce Needs Through Hiring
In addition to wage adjustments, Daiwa has intensified efforts to recruit experienced professionals. The company expects to onboard 250 mid-career hires by March 2025, a significant rise from 161 the previous year and 147 the year before that. These efforts underscore Daiwa’s proactive strategy to mitigate the challenges posed by Japan’s dwindling labor force.
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Broader Economic Implications
Japan’s policymakers have long pointed to stagnant wage growth as a barrier to boosting domestic demand and overall economic vitality. Bank of Japan Governor Kazuo Ueda has emphasized the importance of sustainable wage increases as a prerequisite for future interest rate adjustments.
