Tech talent crunch throttles Japan — Morgan McKinley

TOKYO, JAPAN — A severe shortage of skilled technology workers in Japan is hampering hiring and digital transformation efforts, according to new research by global talent services firm Morgan McKinley. 

Its 2024 Salary Guide found 75% of tech hiring managers rated recruitment as “very” or “quite” competitive last year, while 31% cited a lack of qualified candidates as the top obstacle in 2024. Other key challenges included pay competition (22%) and hiring freezes (19%).

“Despite a concerted effort to drive the digital transformation agenda forward, Japan still ranks low compared to ‘competitor’ countries in digital competitiveness due to a shortage of software engineers,” said Morgan McKinley Japan Managing Director Lionel Kaidatzis.

Despite these hurdles, optimism looms for 2024 as half of technology hiring managers plan to increase headcount in the first half of the year. Moreover, 46% of technology workers are eyeing new roles during the same period, with an additional 31% considering a switch.

For tech professionals, high salary (40%) remains a prime motivator for job transitions, followed by opportunities for career growth (14%) and the ability to work remotely (13%). 

Flexibility, including work-from-home arrangements, also ranks high among valued benefits, with 71% of technology professionals listing it in their top five.

With talent scarce, employers have tightened requirements while shortening time-to-offer to avoid losing candidates. To improve the choice of skills available, Kaidatzis advised organizations to look at non-Japanese speaking overseas-based professionals.

Key technology jobs in high demand for 2024 center on development, infrastructure, cybersecurity, and analytics.

Morgan McKinley surveyed over 650 businesses and 3,400 professionals across Japan to compile salary and hiring trend data.