---
title: Lifetime Employment Is Not a Japanese Tradition
description: An American coined the term in 1958, large firms built it to keep skilled workers, and under one in ten had it in 2006. What a manager can negotiate.
image: https://nobusato.jp/hubfs/covers-2026-10/lifetime-employment-is-not-tradition-cover-en-2026-10.png
---

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Organizations & Hiring

In this article

1. [Who coined the term?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s1)
2. [Where did it come from?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s2)
3. [How many people actually have it?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s3)
4. [What can a foreign manager negotiate?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s4)

[Organizations & Hiring](https://nobusato.jp/en/blog/tag/organizations-hiring)

# Lifetime Employment Is Not a Japanese Tradition

Named by an American in 1958

[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)8 min read

Contents4

1. [Who coined the term?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s1)
2. [Where did it come from?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s2)
3. [How many people actually have it?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s3)
4. [What can a foreign manager negotiate?](https://nobusato.jp/en/blog/lifetime-employment-is-not-tradition#s4)

An American named it. James Abegglen, a management scholar, called what he saw in Japanese factories "lifetime commitment" in a 1958 book, and the Japanese translation, shushin koyo, stuck. The practice itself was built by large Japanese companies from the 1910s and 1920s for one purpose: to stop skilled workers from leaving. And by a 2006 estimate, the group it actually covered was under one in ten. Most foreign executives treat lifetime employment as Japanese culture itself. It is closer to a deal, struck in one period, for one group of people. Once you see it that way, you can tell which of your Japanese employees' expectations are law, which are habit, and which you can negotiate.

## Who coined the term?

An American, in 1958. Abegglen's book The Japanese Factory described the employment practices of large Japanese plants and used the phrase "lifetime commitment." After the Japanese edition came out, the Japanese term shushin koyo spread. Before that, Japanese people had no special name for the practice. Japanese law has never used one either. The Labor Contract Act regulates open-ended contracts and restricts dismissal. There is no clause called lifetime employment.

So a name given by a foreigner became the lens through which foreigners read Japan. That is worth a second's pause.

## Where did it come from?

From large companies in the Taisho era (1912 to 1926), and the aim was retention.

Japan's labor market in the Meiji period was fluid. Skilled craftsmen moved from factory to factory, and there was a word for them, wataridoko, the itinerant workman. Keiichiro Hamaguchi of the Japan Institute for Labour Policy and Training dates the start of regular graduate hiring, regular annual raises and mandatory retirement at large firms to the Taisho and early Showa years. Firms took in young people straight from school, trained and promoted them inside the company, and built rewards for staying. People who came in from outside were kept on as temporary workers. Heibonsha's World Encyclopedia puts it more plainly: skilled workers, engineers and middle managers were always in short supply, so companies needed to prevent poaching.

In other words, a retention device. You don't need samurai ethics or the family system to explain it.

The war added a layer. Under the National General Mobilization Act, employment and wages were controlled, and wage rates were set by age. The 1946 Densan wage system carried that idea on into peacetime, fixing pay by age and number of dependents. Seniority pay was assembled in layers like this.

Here is the part I find most useful. In the 1950s and 1960s, both the government and the employers' federation were against it. In 1957 Nikkeiren, the employers' body, wrote that the pay-raise system born of "lifetime employment" could not survive as it was. The 1960 Income Doubling Plan called for abolishing lifetime employment and seniority and building a labor market that crossed company lines. Policy only turned toward protecting Japanese-style employment in the 1970s. The courts settled the doctrine against abusive dismissal in the same period. It became statute in a 2003 amendment to the Labor Standards Act and moved into Article 16 of the Labor Contract Act in 2008.

So the system is neither old nor unopposed. It is the arrangement that companies, unions and government settled on during thirty years of high growth, and then defended.

## How many people actually have it?

Fewer than one in ten, by the best estimate I could find.

In April 2009 the National Institute for Research Advancement, a Japanese think tank, published a report with a blunt title: abandon the illusion of lifetime employment. The author was Noriyuki Yanagawa of the University of Tokyo. Using the labor ministry's 2006 Basic Survey on Wage Structure, it asked who actually had tenure long enough to deserve the name. One group did: men at manufacturers with 1,000 or more employees. Their average tenure was 30.2 years at ages 50 to 54 and 33.7 years at 55 to 59. That group was 1.9 million of the 21.56 million employees in the survey, or 8.8%. Measured against the broader Labour Force Survey, it was 4.0%.

One caveat the report itself makes. That is the share of the workforce sitting in the category, not a count of people who stayed until retirement. The same report adds that among regular employees, men still at the company they joined from school were under 30%, women under 25%, and both shares were falling.

That was 2006. In the labor ministry's 2025 survey, the average full-time employee had 12.7 years of tenure: 14.2 for men, 10.4 for women, at an average age of 44.4. Men at large companies had 15.9 years, men at small ones 12.5. A 44-year-old with 13 years of tenure joined in their early thirties. I went through those numbers in [How Long Do People in Japan Stay at One Company?](https://nobusato.jp/en/blog/japan-employee-tenure?hsLang=en).

And yet Japanese people say they like it. In JILPT's 2021 survey on working life, with 2,388 valid responses, 82.0% said lifetime employment was a good thing. The figure was 72.3% in 1999, peaked at 87.9% in 2015 and fell back to 82.0% in 2021. Even among people in their twenties it was 75.1%.

Ask the same people about their own career, though, and only 36.6% wanted to stay at one company for life. In 2015 it had been 50.9%. Eight in ten approve of it. A third want it for themselves. Fewer than one in ten have it. That is the system as it stands today.

Eight in ten approve of lifetime employment, a third want it, and fewer than one in ten have it

Share (%). Approval and personal preference: JILPT 8th Survey on Working Life (2021, n=2,388). Coverage: NIRA report (2009), men at manufacturers with 1,000+ employees as a share of employees in the labor ministry's 2006 Basic Survey on Wage Structure

- Say lifetime employment is a good thing2021

  82.0%
- Want to stay at one company themselves2021; 50.9% in 2015

  36.6%
- In the group whose tenure fits the namemen, manufacturing, 1,000+ employees, 2006

  8.8%

The expectation is cultural. The coverage is institutional. A manager deals with the institutional layer.

Figure 1. In 2021, 82.0% of Japanese respondents said lifetime employment was a good thing, but only 36.6% wanted to stay at one company themselves (JILPT), and by NIRA's 2009 estimate the one group whose tenure fits the name, men at manufacturers with 1,000 or more employees, was 8.8% of surveyed employees in 2006.

## What can a foreign manager negotiate?

It helps to split employee expectations into three layers, because each is handled differently.

The first layer is law. You cannot easily dismiss people. This has nothing to do with whether lifetime employment is a tradition. Article 16 of the Labor Contract Act voids a dismissal that lacks objectively reasonable grounds or is socially unacceptable, and redundancies have to clear four tests. This layer is the price of doing business in Japan. What it actually costs when you reach that point is in [What it costs to let someone go in Japan](https://nobusato.jp/en/blog/cost-of-letting-someone-go-in-japan?hsLang=en).

The second layer is institutional inertia. Annual raises. Pay that rises with age. A company that looks after you until retirement, in exchange for transfers, reassignments and overtime. These are the default settings the large-company deal left behind, and Japanese candidates walk into your interview with that table in their heads. This layer you can negotiate, on condition that you offer a different table. Define the job in writing. Don't demand relocation. Pay for the role. Put the evaluation criteria where people can see them. If you offer nothing and simply say "we're a foreign company, we don't do that," the candidate hears "this company offers no security at all." Many Japanese firms call themselves job-based without doing it, as I wrote in [Japan's job-based pay: how many companies really do it](https://nobusato.jp/en/blog/japan-job-based-pay-reality?hsLang=en). Which also means a company that really does it stands out.

The third layer is what the person wants. 36.6% want to spend a career at one company. The other six in ten don't, but they also don't want to be thrown out without a reason. Foreign managers often treat those as the same wish. Separate "security" from "for life" and you find you can offer a surprising amount of security: no dismissal without cause, raises that follow rules, evaluations that leave a record.

In practice this comes down to one habit. Before someone joins, write down the exchange: what the company gives, what it doesn't, and what it asks in return. The clever part of the old large-company deal was that the terms were unwritten and everyone knew them anyway. Without that shared understanding, you have to rely on paper.

Two things I'm less sure about. The 36.6% is a 2021 figure, collected in the middle of the pandemic, and I don't know whether the next survey round will show it bouncing back. And people who have spent their careers at small firms never had lifetime employment in the first place, so their expectations are shaped very differently from those of someone leaving a large company. When someone asks what Japanese employees want, I'd ask where this particular employee came from before answering.

Sources (as of October 2026)

- [National Institute for Research Advancement (NIRA), "Abandon the illusion of lifetime employment" (Noriyuki Yanagawa, April 2009; based on the Ministry of Health, Labour and Welfare's 2006 Basic Survey on Wage Structure)](https://www.nira.or.jp/pdf/0901areport.pdf)
- [Japan Institute for Labour Policy and Training, Research Eye no. 88, results of the 8th Survey on Working Life (Masato Gunji, 25 July 2025)](https://www.jil.go.jp/researcheye/bn/088_250725.html)
- [Ministry of Health, Labour and Welfare, 2025 Basic Survey on Wage Structure, summary of results](https://www.mhlw.go.jp/toukei/itiran/roudou/chingin/kouzou/z2025/dl/14.pdf)
- [Keiichiro Hamaguchi, "Japan's employment system and the problems of older-worker employment," JILPT Labor Policy Forum material (January 2019)](https://www.jil.go.jp/event/ro_forum/20190123/resume/02-kicho-hamaguchi.pdf)
- [Keiichiro Hamaguchi, "Job-based employment and wage systems," Central Labour Relations Commission seminar material (October 2025)](https://www.mhlw.go.jp/churoi/roushi/dl/R080123-1.pdf)
- [Kotobank, "Shushin koyo sei" (Heibonsha World Encyclopedia: Abegglen 1958, institutionalization from around World War I, prevention of poaching)](https://kotobank.jp/word/終身雇用制)
- [Ministry of Health, Labour and Welfare, rules on termination of labor contracts (Labor Contract Act Article 16, four requirements for redundancy dismissal)](https://www.mhlw.go.jp/seisakunitsuite/bunya/koyou_roudou/roudouseisaku/chushoukigyou/keiyakushuryo_rule.html)

---

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[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)

Launching in Japan, starting with people and systems. I write about building organizations, sales teams and technology organizations in Japan, in English, Japanese and Chinese.

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