Development Delays Caused by Staff Shortages and Countermeasures — Challenges on the Ground as Revealed in the Latest Report

人材不足 Small Talk

Introduction

In recent years, there has been a sharp increase in complaints of "labor shortages" in labor-intensive industries such as construction, logistics, and food service. This labor shortage is not merely a matter of difficulty in recruiting, but is spreading to project delays, increased costs, and even the risk of company bankruptcy. This article will discuss the industry reports published in 2024-2025 (commonly known as "...“人手不足1.pdf”Based on the above, we have summarized the key facts and practical countermeasures.

Labor shortages are causing "development and construction delays"—the reality on the ground is serious.

The main points highlighted in the report are as follows:

  • Construction period extension and cost inflation:Large-scale logistics centers and station redevelopment projects, which typically span several years, are experiencing delays of an average of 1.5 to 2 years, and construction costs have ballooned to 1.8 times the initial estimate.
  • A series of order rejections have increased financial risk:Even major general contractors are increasingly declining bids due to "difficulty in securing personnel." As a result, declining sales and worsening cash flow are becoming apparent.
  • The number of bankruptcies is surging:Fiscal year 2025Bankruptcies related to labor shortagesThe number of cases increased by 85 from the previous year to 441, setting a new record high. The cases were particularly concentrated in the construction, logistics, and service industries.

The root causes and specific figures of the labor shortage

Below is a bulleted list of key data extracted from the report.

  1. Rising job-to-applicant ratio:The job-to-applicant ratio in the construction industry is projected to rise from 2.31 in 2024 to 5.5 in 2025, indicating a significant supply shortage.
  2. Upward wage pressure:Part-time hourly wages increased by an average of approximately 7% annually, and the monthly wages of skilled workers, particularly in logistics and construction sites, increased by about 50,000 yen during the same period.
  3. Soaring material prices:Steel and timber prices have risen by 45% and 38% respectively over the past three years, and total costs, including labor, have increased by 20-30%.
  4. Intensified competition for hires:The job-filling rate for small and medium-sized enterprises remains in the 70% range, and even among large companies, over 90% reported a shortage of employees.

These factors combine to create a vicious cycle in which companies face labor shortages, increased costs, and delay risks.

Three specific measures that companies should take

  • ① Internal investment in human resource development and skill improvement
    – On-the-job training (OJT) and e-learning enable employees to become immediately productive.
    – Establish a qualification acquisition system and clarify the career path for skilled workers.
  • ② Business process standardization and design efficiency improvements
    - By introducing prefabricated construction methods and modular building, on-site work time was reduced by 30%.
    – Visualize process management with BIM (Building Information Modeling) and eliminate unnecessary man-hours.
  • ③ Diversification of recruitment strategies and work style reform
    - Actively utilize overseas talent, women, and senior citizens.
    - We have introduced flexible working hours and teleworking to improve work-life balance.

Furthermore, utilizing outsourcing is also effective. To mitigate the risks associated with delays in the construction of the logistics center, it is possible to partially outsource the construction work to a specialized subcontractor while the company focuses on design and supervision.

Supplementary information and points to note

Addressing labor shortages requires not only short-term recruitment efforts but also long-term industrial structural reforms. Please note the following points:

  • Excessive wage increases directly lead to financial risks:When labor costs exceed 30%, profit margins decline sharply, increasing the risk of bankruptcy.
  • Automation and AI implementation require phased investment:Full robotization is still costly, so it's more realistic to start with partial mechanization (e.g., remote control of heavy machinery).
  • Understand the characteristics of the local labor market:In regional cities, the outflow of young people is a serious problem, so early development should be promoted through collaboration with local universities and internship programs.

Summary – What does "survival" mean in an era of labor shortages?

The labor shortages that have become apparent in the construction and logistics industries are not simply a matter of difficulty in recruiting, but are accompanied by multifaceted threats such as project delays, increased costs, and the risk of bankruptcy. However, by focusing on three pillars—internal investment in human resource development, standardization and digitalization of operations, and flexible recruitment strategies—companies can overcome these headwinds and steer towards sustainable growth.
A shortage of manpower can also be an opportunity for transformation. Now is the time to rethink how we work and how we implement new technologies on the ground, and to build our competitiveness for the future.

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