Companies Even Cover Botox Costs... Benefits Race Spreads in Japan Amid a "Talent Shortage"

Nearly Half of Japanese Companies Say They Will Expand Employee Benefits
Labor Shortages and Rising Prices... Benefits Instead of Wage Hikes
Free Dinners at Company Cafeterias, Beauty Allowances Offered

From company cafeterias offering free meals through dinner to “beauty allowances” that cover Botox injections, Japanese companies are stepping up their employee benefits.

According to Yonhap News Agency on October 19, Japan’s Nikkei reported that “more Japanese companies are expanding their employee benefits amid labor shortages and rising prices.”

Free Cafeterias and Beauty Allowances... Benefits Race Amid Labor Shortages

An office worker, pictured for illustrative purposes. Pexels.

LINE Digital Frontier, which operates the webtoon service LINE Manga, made its employee cafeteria free starting in August. Breakfast and lunch had already been available for free or at a low cost, but employees can now eat dinner without paying, too. A company representative told the Nikkei, “It’s a major benefit to be able to get all three meals for free when you come to the office.” The Nikkei said the policy “promotes communication among employees and increases their satisfaction with the company, while keeping costs down compared with raising wages.”

Resource Creation, a social media management agency, has offered beauty allowances of up to ¥200,000 (about 1.69 million won) since 2024, with the amount depending on job duties and years of service. The company does not ask how the money is spent, as long as it is for beauty-related purposes. One employee said, “I got Botox injections to reduce wrinkles with my ¥150,000 (about 1.27 million won) beauty allowance,” adding, “Being able to spend the company allowance on beauty treatments motivates me to work.” Keitaro Takada, president of Resource Creation, said he expects the policy to reduce turnover if students applying for jobs are drawn to the company culture and decide to join.

Companies are investing in benefits to retain talent. Japan is facing serious labor shortages due to its declining birthrate and aging population. In addition, consumer price inflation exceeded 2% for four consecutive years through last year, making it increasingly difficult to ease employees’ cost-of-living burdens through wages alone.

“More Flexible Than Wages”... Benefits Vary by Company Size

A photo of a cluster of office buildings to help illustrate the article. Pexels

The trend is also reflected in statistics. A survey conducted by Japan’s Ministry of Health, Labour and Welfare and commissioned to credit research firm Teikoku Databank found that corporate spending on employee benefits rose 4.8% last year from the previous year. In a separate survey of 10,554 companies nationwide conducted by Teikoku Databank in September last year, 47.6% said they planned to expand their employee benefits. However, there was a large gap depending on company size. The share of companies planning to expand benefits was 57.9% among large companies, 45.8% among small and medium-sized companies, and 38.5% among smaller companies. By industry, the figures were high in construction (58.7%) and transportation and warehousing (55.1%), where labor shortages are severe.

Teikoku Databank also separately surveyed companies headquartered in Tokyo. The most commonly cited benefit they wanted to introduce was a subscription-based employee benefits service (11.1%), followed by travel support for employees (10.9%), childcare and caregiving assistance beyond statutory requirements (10.8%), and repayment of employees’ student loans on their behalf (10.7%). Companies planning to expand benefits said they did so because “job seekers value employee benefits,” while those with no such plans cited “difficulty securing funding” and said “raising wages takes priority over employee benefits.”

Experts say benefits place less of a burden on companies than wage increases. Koji Nishikubo, professor emeritus at the University of Yamanashi, said, “Compared with wage increases, which pose a high management risk, benefit costs can be managed more flexibly. Company-specific benefit programs also convey management’s consideration for employees and are easy to leverage in recruitment.”

This content was produced with the assistance of AI translation services.