Feb. 2020
Survey of Corporate Attitudes Towards Wage Trends for 2020
“Stability of and securing the workforce” as reason for wage improvement reaches record high 80.6%
— Wage improvement reaching a high level at 53.3%, but appears to pause —
Introduction
While companies that considered the economy for 2019 was in a “recovery phase” remained in the single digits for the second consecutive year, those that considered it was in a “downturn phase” reached the 30% range for the first time in seven years. Continuing from 2018, it was a year of increased severity. (Teikoku Databank, "Survey of Corporate Attitudes Towards Economic Outlook for 2020") As the household burden increased due to the consumption tax hike in October 2019, wage trends attracted a lot of attention, such as the government asking the Japan Business Federation (Keidanren) to continue increasing wages for the seventh consecutive year.
Under such circumstances, Teikoku Databank conducted a survey on corporate attitudes towards wage trends for 2020. This survey was conducted in conjunction with the January 2020 TDB Trends Research.
*Survey period: January 20 - January 31, 2020; Companies Surveyed: 23,665; Valid Responses: 10,405 (Response Rate: 44.0%) The survey on wages has been conducted in January every year since January 2006, and this is the 15th survey.
*Details of this survey can be found on the dedicated Economic Trends Survey HP. (http://www.tdb-di.com/)
*Wage improvement means improvement (increase) in wages by pay-scale raises and bonus pay (lump-sum pay) increases, and does not include annual regular pay raises.
Primary points of survey results(summary)
- 1 Companies anticipating “wage improvement” in 2020 surpassed 50% for the fourth consecutive year, at 53.3%, 2.2 points down from the previous survey (in January 2019). Companies anticipating “wage improvement” exceeded those anticipating “no wage improvement” for the tenth consecutive year, and the difference remains substantial, at 33.1 points.
- 2 With respect to the details of wage improvement, pay-scale raises and bonus pay (lump-sum pay) stood at 45.2% (a decrease of 0.4 points y-o-y), and 26.3% (a decrease of 4.0 points y-o-y), respectively. While pay-scale raises remained at a high level, in the 40% range for the fourth consecutive year, bonus pay (lump-sum pay) decreased to the 20% range.
- 3 With respect to the reasons for wage improvement, most cited “stability of and securing the workforce,” which was a record high at 80.6%. The trend to increase wages for stability and to secure the workforce has strengthened. On the other hand, “business expansion of one’s own company” (36.0%) dropped by 4.9 points from the previous year. With respect to the reasons for no wage improvement, “poor business performance of one’s own company” increased by 5.5 points y-o-y, to 58.1%, the first increase in five years.
- 4 Companies responding total personnel expenses would “increase” in 2020 stood at 68.9%, a decrease of 1.6 points from the previous survey. By industry, percentages are high in “service,” “transportation and warehousing,” and “construction.” Total personnel expenses are expected to increase by 2.85% on average, but the rate of increase is projected to drop slightly from the previous year. Among these, the total of employees' salaries and bonuses is estimated to increase by approximately 3.7 trillion yen (an average of 2.50%).