Shushin koyou: Lifetime employment

When an employee works for a company once hired him/her right out of school until retirement, it is called shushin koyou or lifetime employment. Because of the nation’s declining birth rate and aging population in Japan, more companies now set their retirement age at 65 though it generally used to be 60. Lifetime employment system guarantees a stable living from the perspective of employees; it has advantages of definite long-term financial planning, such as purchasing a home and education expenses for children.

For this reason, many companies used to utilize the system as one of the Japanese main employment practices. However, the lifetime employment system has been losing its shape recently due to increased workforce mobility caused by globalization. Working for the same company for a person’s entire career is no longer a common work style in Japan.

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