• Japan’s Gen Z talent emerging from college are being wooed with student loan reimbursement and subsidized housing as the country’s employers go up against a rapidly aging workforce.

For many Gen Zers, paying off student loans and affording decent housing may seem like a pipe dream. But this may be a distant problem for young Japanese talent emerging from universities and heading into the workforce.

In fact, over 40% of Japanese pupils graduating in March this year have already had at least one job offer a full year before they’re set to wrap up school, according to a 2024 report from research institute Shushoku Mirai Kenkyusho. That’s the highest percentage the country’s graduating talent has seen since 2016.

And they’ve got a tight labor market to thank. With an aging population and low birth rates, there simply aren’t enough skilled young workers to go around, so firms are resorting to recruiting students before they’ve left college—and it’s creating a double-whammy win for entry-level workers.

With students now weighing multiple job offers before even tossing their graduation caps into the air, employers are upping the ante.

Now, Japanese businesses are turning to subsidized housing, student loan perks, and more to woo workers. Even one of Japan’s largest employers has gotten in on the action.

Japan’s aging workforce is bad for business, a win for talent

Many countries around the world are vying for the best Gen Z talent, but in Japan the labor market has grown especially dire.

Japan’s birth rate hit a record low in the first half of 2024, decreasing 5.7% compared to the same period in 2023, according to a 2024 report from the Ministry of Health, Labor, and Welfare. As the country’s birth rate continues to decline, this will send shock waves in staffing Japanese businesses. Japan’s youngest and brightest working population, ages 20 to 24, has decreased 36% in the past 30 years, according to 2024 data from Japan’s Ministry of Internal Affairs and Communications. At this rate, it’s expected that by 2040, the nation may be up against an 11 million worker shortage, according to a 2023 report from think tank Recruit Works Institute.

This growing labor shortage has forced some century-old Japanese businesses, like Hizatsuki Confectionery, to recruit workers from abroad. But due to the general wariness of bringing on foreign workers at these storied businesses, where employees usually speak only Japanese, hiring domestic workers is still more desirable.

To persuade Japan’s rising talent to come on board and stick around, employers are bringing out their big guns.

Unique company perks: saunas, employer-sponsored housing, weekday dinners, and more

Japan’s Gen Z workers are being offered more than handsome compensation packages and quality health care.

Employer-sponsored housing has grown in popularity as Japan’s cost-of-living crisis has sent many into hard times. Japan’s inflation rate jumped to a 41-year high in late 2022, and even the country’s most beloved affordable meal, ramen, has been hit by higher costs.

That’s why companies like Nippon Life, one of Japan’s largest insurers, are splurging on employee dormitories. In 2023, the business built a 200-room building for males in a sought-after residential area near Tokyo Disneyland. Nippon Life workers living there pay under a third of what rent would be for a comparable living option in the area. The company also provides subsidized housing for its working women.

Trading house Itochu has also invested in a new housing facility for its male workers, just a half-hour train ride from the company’s Tokyo office. The living accommodations provide breakfast and weekday dinners to employees, alongside other perks including a bar, café, and sauna. Itochu will also open a facility for its female workers in 2025.

Other employee benefits are also rising in popularity. Japan’s employers are increasingly luring in college graduates with student loan reimbursement. The number of businesses providing this assistance doubled between November 2023 and 2024, according to a study from the Japan Student Services Organization. Companies like Tokyo Energy & Systems give workers up to ¥20,000 ($127) per month to repay student loans, capped at around ¥3.6 million ($22,800) in total.

Another alluring perk has come to one of Japan’s largest employers, following the popularity of this benefit at German and U.K. businesses: The Tokyo Metropolitan Government, which employs more than 160,000 workers, will allow a four-day workweek among its employees starting in April this year.