Govt to provide subsidies for ‘temp-to-permanent staffing’ in japan

Posted in: factoring company staffing, Factoring Staffing Industry News, payroll factoring, staffing factoring, Staffing Factoring Articles, staffing industry, Staffing Industry Financing Company- Feb 03, 2014 Comments Off

The government has decided to start providing subsidies for “temp-to-permanent staffing” in fiscal 2014 to improve employment situations for young people, sources said.

Temp-to-permanent staffing is a business practice in which temporary staffers could become full-time, regular employees after working for a certain period of time.

To do that, temp staff companies need certification or registration to provide personnel placement and temporary staffing services.

Staffing agencies provide basic training such as teaching business etiquette to those who cannot find jobs, and introduce them to companies on the premise of gaining regular employment status after a certain period of probation.

If the worker and the company both agree, the temp staffer can become a regular employee. The system is popular in the United States and Europe because it can prevent mismatches between workers and companies, and in Japan it was introduced in December 2000.

Under the new subsidy system, the government will pay cash rewards to staffing agencies if workers gain permanent jobs through the temp-to-permanent staffing service. The system aims to support young people who have difficulty obtaining regular employment even after graduation.

It is assumed that young people, such as those who cannot find jobs a year after graduating from university, will take advantage of the new system and the service will be offered free of charge.

The government will divide the nation into five sections, and in each section it will create consigning contracts with staffing agencies. Agencies offer basic training such as work etiquette and computer skills and introduce companies to job seekers. Agencies offer other support including individual consultations during a maximum six-month period as a temporary worker to help temporary staff obtain regular employment.

The government will shoulder part of the expenses for basic training to be provided by the staffing agency, while at the same time paying the agency a cash reward of about ¥100,000 per person for successful placements, when a temporary worker is employed as a regular worker by the company to which he or she was assigned.

The government will allocate ¥4.3 billion for these programs in a supplementary budget for fiscal 2013. After the supplementary budget is passed, the government plans to launch these programs sometime before summer.

According to the Health, Labor and Welfare Ministry, the percentage of college students who graduated in the spring of 2013 and had found jobs by April 1, 2013 was 93.9 percent. But at the same time, nearly 30 percent of recent college graduates who found jobs quit them within the first three years, giving rise to problematic mismatch between graduating students and companies that employ them.

According to a senior official of the labor ministry, there has been an increasing divide between two groups of new college graduates: those who become regular employees and those who remain nonregular workers.

The government hopes to avoid such mismatches by using a probationary employment period, where temporary workers are assigned to a company by a staffing agency with the possibility of becoming regular workers in the future.

The government intends to give full support to those young people who are seen as difficult to immediately employ as regular workers, utilizing the know-how of staffing agencies, including efforts ranging from job training to job placement services.

According to the labor ministry, 25,927 people had been employed as regular workers in fiscal 2011 after being assigned to a company by staffing agencies with the future possibility of becoming regular workers. The government wants 7,500 young people to find regular jobs through the new system over the next three years.