Turnover rate in Japan: Why it matters and how to reduce it

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Turnover is a growing concern for companies in Japan, especially as younger workers seek flexibility, purpose, and fair treatment at work. The turnover rate is not just a number. It reveals how well your organization retains talent, manages employee satisfaction, and adapts to evolving workplace expectations. In this article, we’ll break down what turnover rate means, explore why it's rising in Japan, and share practical strategies to reduce it.

What is turnover rate?

The turnover rate measures the percentage of employees who leave an organization over a specific period, usually one year. A high turnover rate often signals workplace issues such as poor management, lack of growth opportunities, or uncompetitive compensation.

In Japan, the term is often used interchangeably with “resignation rate” and includes both voluntary and involuntary separations.

How to calculate turnover rate

A common formula used in Japan (based on Ministry of Health, Labour and Welfare data):

Turnover rate = (Number of separations ÷ Number of employees at the start of the year) × 100

Example: If a company started the year with 150 employees and 7 left during the year, the turnover rate is: (7 ÷ 150) × 100 = 4.7%

Average turnover rate in Japan

According to the 2023 Ministry survey:

National average turnover rate: 15.4%

By gender: 13.8% for men, 17.3% for women

Part-time turnover rate: 23.8%

Regular employment turnover rate: 12.1%

Among new graduates, about 35% of university grads leave within 3 years of starting their first job. Key reasons include poor interpersonal relationships, work conditions, and low pay.
Source: Ministry of Health, Labour and Welfare – 2023 Employment Trends Survey

Common causes of high turnover in Japan

Companies with high turnover often face the following challenges:

Low or non-competitive salaries
Employees are more likely to leave if they feel underpaid compared to industry standards—especially in Japan, where loyalty used to trump pay, but this mindset is shifting rapidly among younger talent.

Long hours or poor work-life balance
Japan’s culture of overtime can lead to burnout, especially when work expectations aren’t clearly managed. Lack of flexibility or time off makes it harder for employees to maintain a sustainable routine.

Lack of fair or transparent evaluation systems
When promotions and raises seem arbitrary or based on seniority rather than performance, employees—particularly younger or international staff—can become demotivated and leave.

Weak leadership or unclear career progression
Poor communication from management, micromanagement, or a lack of development planning can make employees feel directionless or unsupported in their growth.

Toxic work environments or poor communication
In Japan, harmony is valued, but lack of open communication can lead to unresolved tensions. Bullying, cliques, or passive leadership can all contribute to employee dissatisfaction.

Minimal training or upskilling opportunities
Without opportunities to develop new skills or advance professionally, ambitious employees may feel stuck—especially in industries undergoing digital transformation.

Key strategies to reduce turnover

Improve compensation and flexibility
Regularly benchmark salaries against the market. Offer options like remote work, flextime, and reduced overtime to appeal to modern expectations—especially among mid-career and bilingual professionals. For industry-specific benchmarks, refer to the latest Salary Guide.

Create fair and transparent evaluation systems
Link performance to promotions, use objective KPIs, and provide structured feedback. This builds trust and motivates employees to stay and grow with the company.

Support career growth
Offer clear paths to advancement, mentorship programs, and learning opportunities (e.g., certifications, language courses, leadership training). Show employees how they can thrive long-term.

Enhance communication and leadership
Train managers to lead with empathy and consistency. Regular 1-on-1s, skip-level meetings, and company-wide updates help foster engagement and prevent misunderstandings.

Promote well-being
Ensure employees are using their leave, have access to mental health resources, and feel safe in their work environment. Small improvements—like ergonomic setups or wellness stipends—can make a big difference.

Prevent mismatched hires
Clearly communicate company culture, expectations, and role responsibilities during hiring. Look beyond technical skills—values and cultural fit matter just as much.

Onboard and support new employees
A strong onboarding process reduces early turnover. Assign mentors, conduct regular check-ins, and provide structured support during the first 3–6 months to help new hires adjust.

How recruitment partners help reduce turnover

Recruitment agencies like Robert Half play a key role in improving retention:

Matching candidates beyond skillset, including values and goals
We assess both technical and cultural fit to ensure the candidate aligns with your company's vision and working style—reducing early mismatch risk.

Offering detailed insights about company culture to candidates
We help manage candidate expectations by communicating your culture, team dynamics, and work environment upfront—leading to better engagement post-hire.

Advising on market trends and candidate expectations
We provide clients with up-to-date insights on salary benchmarks, talent availability, and evolving candidate priorities—helping you stay competitive and aligned with market demands.

Improving hiring efficiency
Our recruitment process streamlines candidate sourcing, shortlisting, and interviewing—saving your internal team time and reducing delays that can lead to losing top talent.

Looking to reduce turnover and hire talent that sticks?

Contact us today

Turnover isn’t just about losing people—it’s about identifying what makes people leave and building an environment where they want to stay. For companies in Japan, reducing turnover is critical for long-term stability, productivity, and employee satisfaction.