Toyota Motor Corp., Japan’s largest carmaker and employer and also the world’s biggest automaker, has plans the update its worker pay structure – from a seniority-based scheme – to one that would eliminate the age gap.
The Nikkei business daily first reported the structure change on Monday and today the company’s human resources boss confirmed the update. According to Tatsuro Ueda, speaking on the sidelines of an event in Tokyo, hosted by Keidanren, the nation’s largest business lobby, the company is mulling the change of the employee salary structure to also include performance pay considerations for the younger workers. Toyota would also link the salary structure more to the employee’s proven talent and capabilities, rather than rank and tenure, while also revising the payments to better support child-raising.
Japanese companies are close to entering the annual spring deals with their unions and they have also been pressured by Prime Minister Shinzo Abe to increase wages as the government strives to restart the world’s third-largest economy. Meanwhile, Toyota is predicting a second year of record financial earnings and profits, due to the continued weakness of the yen currency that buoys earnings gained from exporting vehicles produced in Japan to overseas markets.
Toyota has seen, according to the company’s most recent study, its employees average age climbing to 38.8 years as of the fiscal year ending in March 2014, while just a decade ago it was less than 37 years. The company also further expects that employees that are 50 or older to make up 30 percent by 2035, rising from just 20 % today.
Via Bloomberg, Reuters