Japan’s eased border restrictions offer hope for struggling business sectors

Eased border restrictions that came into effect Tuesday have brought relief to Japanese businesses that are heavily reliant on foreign workers and trainees to cope with labor shortages stemming from Japan’s rapidly aging population.

One key industry that has been suffering from a severe labor crunch due to the nation’s strict border controls is elderly care, which employs many staffers from Southeast Asian countries.

A slew of nursing care facilities were expecting to accept new foreign trainees, but the entry ban derailed their plans.

Initially, some nursing care facilities were hoping that staffers from other industries — including the hospitality sector, which had to lay off workers due to the pandemic — might work as caregivers, said Shuji Tanaka, secretary-general of the Japan Care Support Cooperative, an organization that accepts technical interns from the Philippines, Indonesia and Vietnam.

“But that didn’t really happen, so they have barely been able to continue their operations,” said Tanaka.

About 70 foreign trainees were scheduled to come to Japan through the Hiroshima-based organization, but their arrival was put on hold because of the entry ban.

“We were worried that some of the trainees might decide (not to come to Japan), but those who have already received a job offer” are sticking with it, said Tanaka.

From Tuesday, Japan started accepting new arrivals of business travelers, international students and long-term foreign workers, while bumping up the the number of people allowed to enter Japan from 3,500 to 5,000 per day.

The government estimates about 400,000 foreign nationals, including roughly 153,000 international students and 129,000 technical interns, are waiting to come to Japan.

Japan’s border has been closed to new entries by foreign nationals for most of the pandemic. In early November, it reopened borders for the first time in nearly a year, before they were closed again three weeks later due to the emergence of the omicron variant. Three months later, the restrictions have been eased once again.

Japan’s border policy has prompted some foreign firms to scale down their operations in Japan.

According to a survey conducted by the German Chamber of Commerce and Industry in Japan in late January, 11% of the respondents said they already have or will shrink their operations in Japan. The survey, which received a response from 100 out of 396 companies, also showed that the loss among its members due to the border restrictions was estimated to be more than €100 million, or ¥12.9 billion at current exchange rates.

Although businesses are happy that the border is now open for foreign workers, they are also skeptical about whether it will last.

Many large Japanese firms will likely be hesitant about resuming their recruitment of foreign talent, said Yohei Shibasaki, who heads Tokyo-based Fourth Valley Concierge Corp., which matches Japanese companies with foreign workers.

“Human resources departments at large Japanese companies are very conservative, so they are probably being cautious given the possibility that the entry ban might be reintroduced again,” Shibasaki said.

“Unless the government sends a message that it will not close the border again,” they will wait and see for a while, said Shibasaki, whose clients include some of major Japanese IT firms such as Mercari Inc.

Top tech firms have been increasingly looking for foreign talent amid a dire shortage of IT engineers. But many skilled foreign workers planning to come to Japan have already canceled their plans, as they could not wait for the border restrictions to be eased.

With more people working from home during the pandemic, the assumption has been that foreign engineers can telework from their home countries. But that is actually difficult to do due to security reasons, said Shibasaki, adding that IT firms cannot give engineers stationed overseas free access to sensitive databases.

Like other companies outside the tech sector, Fourth Valley has also been hit hard, as cross-border travel is essential to its core business. Since sales mostly came from supporting the recruitment of overseas talent, Fourth Valley has been forced to increase revenue from domestic sources to survive, Shibasaki said.

Even though borders are now open, Japan’s policy is still the strictest among the Group of Seven industrialized countries, raising concerns that foreign students and workers who would have otherwise been interested in coming to Japan may not see the country as their future destination anymore.

Shibasaki, however, said Japan is more eager to accept skilled foreign workers compared with other advanced economies such as the United States and Australia, where it is harder to obtain work visas.

When it comes to fresh college graduates, it is much easier for them to work in Japan, for example.

Many firms overseas do not take in young talent without proper job experience, but Japanese firms are willing to hire them, he added.