Japanese companies are expanding employee benefits such as subsidized meals and cosmetic procedures instead of raising wages. With labor shortages and inflation persisting, firms are using perks to attract talent and curb turnover.
Three free meals a day and up to 1.69 million won for beauty treatments
An increasing number of Japanese companies are strengthening in-house benefits amid hiring difficulties and rising prices, the Nihon Keizai Shimbun, or Nikkei, reported on the 22nd.
Line Digital Frontier, which operates the webtoon service Line Manga, made its employee cafeteria entirely free starting in August. The company had already offered breakfast and lunch for free or at low prices, but it now covers dinner as well.
Nikkei said such programs improve communication among employees and satisfaction with the company while easing cost burdens compared with wage increases.
Resource Creation, an agency that manages social media accounts for clients, has paid a beauty allowance of up to 200,000 yen (about 1.69 million won) since 2024, depending on job role and length of service. There are no restrictions on where the money can be spent as long as it is for cosmetic purposes.
One employee said they used 150,000 yen (about 1.27 million won) of the allowance for Botox injections to reduce wrinkles. "Being able to get cosmetic treatments with a company allowance motivates me to work," the employee said.
47.6% of firms plan to expand benefits, but smaller companies face strain
Behind the expansion of benefits is competition for talent. Japan's labor shortage has deepened because of a low birth rate and population aging. Consumer price inflation also exceeded 2% for four consecutive years through last year. As wages alone have become insufficient to ease employees' living costs, companies are turning to benefits as a new incentive.
In a survey commissioned by Japan's Ministry of Health, Labour and Welfare and conducted by credit research firm Teikoku Databank, corporate spending on employee benefits rose 4.8% last year from a year earlier. In a separate Teikoku Databank survey of 10,554 companies nationwide in September last year, 47.6% said they planned to expand benefits.
Among benefit programs that Tokyo-based companies said they want to introduce, subscription-style benefit services ranked first at 11.1%. Support for company trips followed at 10.9%, childcare and nursing care assistance exceeding legal requirements at 10.8%, and repayment of employees' student loans at 10.7%.
Keitaro Takada, president of Resource Creation, said the approach could lower turnover. "If students applying for jobs understand our corporate culture, feel good about it and then join us, that should help reduce the turnover rate," he said.
Koji Nishikubo, professor emeritus at the University of Yamanashi, said benefit spending can be managed more flexibly than wage increases, which carry higher management risk. "A company's own benefit programs show employees that management cares about them, which also makes the programs useful in recruiting," he said.