Episode #374: Japan Small Businesses Must Pick Up The Dregs Of Sales

Why is Japan facing a severe labor shortage now?

Japan is in the middle of a structural workforce crunch. The job-to-applicant ratio has climbed to 1.28, meaning there are 128 openings for every 100 job seekers. While this still hasn’t returned to the pre-pandemic level of 1.6 in 2019, the direction is clear: demand for workers is outpacing supply.

The hospitality industry has been hit especially hard. Many part-time employees left during COVID-19 and haven’t returned in sufficient numbers. Hotels are nearing pre-COVID occupancy, but operations are strained by shortages in cleaning and frontline service. A large majority of hotel operators report that they lack both regular and non-regular workers.

Mini-summary: Japan’s labor market is tightening across industries, with hospitality showing how quickly service quality suffers when staffing can’t keep up.

Japan has passed a historic threshold: more than 3 million foreign residents now live in the country. To respond to labor gaps, the government is expanding visa options, including a new Skilled Worker No. 2 category for construction and shipbuilding.

Long-term forecasts are even more dramatic. Estimates suggest Japan would need to nearly quadruple foreign labor to around 6.74 million workers by 2040 to meet national growth targets. This represents a profound shift for a society that has traditionally prioritized social conformity and harmony over becoming a “melting pot.”

For employers, that means two things:

1. foreign labor will increasingly fill jobs locals avoid, and

2. organizations must prepare to manage more diverse teams effectively.

Mini-summary: Immigration is rising because Japan needs labor; companies must adapt to a future where multicultural workplaces are normal, not exceptional.

Even as foreign labor rises, white-collar roles won’t see a large influx of overseas applicants. Language barriers and the weak yen reduce Japan’s attractiveness for many global professionals. So multinational and Japanese firms (日本企業, “Japanese companies”) will still compete aggressively for local talent.

The competition intensifies further when English is required. The pool becomes tiny, and big corporations with deep pockets can bid salaries upward. Small and medium businesses (SMBs) face the hardest reality: they must hire from a shrinking, pricier candidate market while still demanding high performance.

Mini-summary: White-collar and bilingual hiring will stay fiercely competitive, leaving SMBs under the most pressure.

Who are the “Dai Ni Shinsotsu” (第二新卒, “second-stage fresh graduates”) and why should companies target them?

Japan is actively trying to globalize future talent. A government-backed initiative aims for 150,000 Japanese students to be studying abroad by 2033. Meanwhile, turnover among early-career workers is high: about 30% leave within three years.

This creates a growing segment called the Dai Ni Shinsotsu (第二新卒, “second-stage fresh graduates”)—young professionals who have left their first job and are looking for a better fit. Many have international exposure, improving English skills, and early workplace experience. They are an attractive hiring target, but they still need structured development to become high performers.

Mini-summary: The Dai Ni Shinsotsu talent pool is expanding and valuable—if companies invest in training them properly.

Why is sales hiring in Japan becoming so difficult?

Sales hiring in Japan is increasingly grim, especially for roles requiring English. The market is shallow, competitive, and expensive. Over the last several years, sales candidates have become more costly relative to their real capability.

A critical issue is that most salespeople are untrained. Experience alone does not guarantee skill. In practice, many are still relying on trial and error. Key weaknesses show up repeatedly:

• They don’t ask enough buyer-focused questions to uncover needs.

• They struggle with objections—especially pricing objections.

• Many default to a quick discount (often ~20%) when hearing “your price is too high,” rather than handling objections professionally.

Because talent is scarce, power has shifted to sales candidates. They can choose among employers, while employers face thin resume pipelines and declining candidate quality.

Mini-summary: Japan’s sales talent pool is shrinking and under-skilled, making hiring harder and performance riskier.

When hiring standards inevitably drop due to scarcity, the solution isn’t denial—it’s redesign. Companies need longer, more intensive onboarding and a heavier training load during probation.

Key shifts include:

• Extending onboarding to be more comprehensive and structured.

• Lengthening probation to around six months to allow real skill development.

• Treating early months as a training bootcamp, not a “sink or swim” test.

The old approach—hire fast, fire fast—doesn’t work anymore because entry funnels are too thin. Companies can’t assume replacements will be easy to find.

Mini-summary: Survival now requires longer onboarding and probation, built around skill development rather than quick filtering.

Why is professional sales training the most practical answer?

Given the reality—bleak hiring prospects and weaker baseline talent—the only sustainable path forward is training. Companies must assume that new hires need:

• serious, professional sales capability building,

• constant coaching, and

• time to improve.

This is resource-heavy, but it’s also unavoidable. Without investment, sales teams will stall, customer trust will erode, and revenue will soften. With investment, even “average” hires can become high-performing contributors.

At Dale Carnegie Tokyo (東京, “Tokyo”), we see these patterns across industries. Our 100+ years of global expertise and 60+ years in Japan equip organizations to build sales forces that can ask better questions, handle objections without discounting, and consistently create value for clients.

Mini-summary: Training is no longer optional; it’s the only dependable way to turn scarce hires into strong sales performers.

• Japan’s talent shortage is structural and worsening, especially in sales and service sectors.

• White-collar and bilingual hiring will stay competitive, pushing SMBs into a tougher fight for talent.

• Sales candidates are pricier but often under-trained—onboarding and coaching must expand.

• Investing in professional sales training (営業研修, “sales training”) is the most realistic strategy for performance and survival.

Founded in the U.S. in 1912, Dale Carnegie Training has supported individuals and companies worldwide for over a century in leadership, sales, presentation, executive coaching, and DEI. Our Tokyo office, established in 1963, has been empowering both Japanese and multinational corporate clients (外資系企業, “multinational companies”) ever since.