Introduction – Why is labor shortage a problem now?
To those in charge of construction companies who are struggling with issues such as "difficulty attracting young craftsmen" and "an aging workforce":Sekisui HouseThis book explains, in a way that even beginners can understand, the concrete measures demonstrated by the company, such as direct employment, reform of the salary system, and utilization of overseas talent.
The housing construction industry is facing both an aging workforce and a decline in new entrants. According to a survey by the Ministry of Health, Labour and Welfare, the average age of construction-related workers exceeds 45, and it is predicted that approximately 30% will retire in 10 years. As a result, project delays and cost increases are becoming apparent, leading to a decline in the overall competitiveness of the industry.
This article introduces the measures taken by the Sekisui House Group to address labor shortages, divided into three pillars, providing hints that other companies can immediately adopt. We will delve into each point—"direct employment," "wage and career path reform," and "utilization of overseas personnel such as Vietnamese"—with specific examples.
The root causes and solutions to the labor shortage in the housing construction industry
It is important to view it in the following order:
- Identifying the cause → Visualizing it with data
- Direct job creation → Securing personnel closer to the front lines.
- Redesigning compensation and career systems → Improving motivation among young employees
- Accepting highly skilled workers from overseas → Supplementing the workforce with readily available skills
- Integrating resources through M&A and partnerships → Building a long-term stable foundation
These five steps are the key to how Sekisui House overcame its labor shortage. We will explain each measure in detail in the following chapters.
1. On-the-job training through direct employment
- Objective: To break away from reliance on subcontractors and to thoroughly implement quality control.
- Achievements: By fiscal year 2020, approximately 600 craftsmen had been converted to full-time employees (of which 70% were in their 30s and 40s).
- point
- We set a fixed number of recruits each year and strengthen our partnerships with universities and vocational schools.
- The training program is designed in three stages: "Basic Course for Master Craftsmen" → "On-the-Job Practice" → "Leadership Development".
- The employee turnover rate was reduced by 15% through the introduction of employee benefits (health insurance, pension, and housing allowance) following the conversion to full-time employment.
2. Reform of the wage system and career paths
We shifted from the traditional seniority-based system to a "job-based pay" system and introduced performance-based elements.
| grade | Examples of target individuals | Estimated annual income |
|---|---|---|
| Hope (newcomer) | High school graduates, recent graduates, and apprentices | 5 to 7 million yen |
| Chief Engineer | A mid-career craftsman with 3-5 years of experience. | 7.5 to 9 million yen |
| Master (skilled) | People with more than 10 years of practical experience | Over 10 million yen |
*Annual salary is calculated based on job grade x individual performance evaluation, not seniority, with performance-based pay increasing by up to 30%. As a result, the motivation of younger employees has increased by an average of 2.2 times (according to an internal company survey).
3. Utilizing Highly Skilled Workers from Overseas – Vietnam's Specified Skilled Worker System
- Background: An agreement was signed with the Vietnamese government to address the shortage of skilled workers in the country.
- System overview:We are recruiting 100 truck drivers and construction workers annually, limited to the construction sector, under the "Specified Skills" visa program.
- Advantages
- As an immediate asset, you will be able to handle large machinery operation and foundation work.
- Language training and life support resulted in a 90% retention rate (FY2023).
- Diverse backgrounds stimulate innovation within the company.
4. Expand resources through M&A and industry collaborations.
Labor shortages are not simply a lack of personnel, but also an uneven distribution of "resources" due to project scale and technological innovation. Sekisui House mitigated this risk with the following two strategies.
- Major acquisition: Acquired Sumitomo Electric Industries (2015), bringing the electrical equipment division in-house and reducing outsourcing costs by 20%.
- Cross-industry partnership: We established a joint training center with other companies in the same industry, reducing new employee training time by 30% using common training materials.
*M&A involves financial risks, so it is necessary to carefully verify the financial soundness and cultural compatibility of the acquired company. Furthermore, there is a risk of know-how leakage if information sharing rules with partners are not clearly defined.
Summary – Three Keys to Overcoming Labor Shortages
The labor shortage in the housing construction industry is not simply a matter of "not having enough people,""A system that makes it difficult to develop on-the-job personnel."This is the cause. Sekisui House offers the following practical solutions:
- By directly employing personnel close to the production site, we can secure a stable supply line.
- We redesigned our job-based pay system and career paths to improve the motivation and retention rate of young employees.
- We will accept highly skilled workers from overseas, such as Vietnam, to fill the shortage by providing them with immediate contributions.
- We maintain long-term competitiveness by integrating resources through M&A and industry partnerships.
These four measures can be implemented gradually by construction companies of any size. Let's start by "listening to feedback from the field and turning it into data." If you do that, you will surely be able to overcome the obstacle of labor shortages.
