## ○ Structural changes and non-regular employment

In the Japanese economy, the number of non-regular employees has been increasing in line with the diversification of employment forms under a situation where companies have been trying to address economic fluctuations and medium to long term structural changes.

During the 25 years from 1985 to 2010, the number of regular employees has not been decreasing drastically overall, but the number of non-regular employees significantly increased. Not only part-time workers but also other forms of non-regular employment increased. Aging of the workforce contributed to the increase of non-regular employment.

Although actual use of non-regular employment is different in each industry, the ratio of non-regular employment is increasing in all industries. We observe cases that the non-regular employees have come to play a core role and have become a substantial part of the workforce. However, the percentage of companies planning to increase the ratio of regular employees in the future exceeds the percentage of companies planning to increase the ratio of non-regular employees.

During January to March of 2013, the number of non-regular employees was 18.7 million persons, and accounted for 36.3% of all employees excluding executives (the ratio of non-regular employees). Most of the non-regular employees are fixed-term employees. The number of fixed-term contract employees was 14.44 million persons, and accounted for 28% of all employees excluding executives. Among them, the number of employees with 5 or longer years of tenure was estimated as 4.26 million persons; it is hoped that more people will move to permanent (or non-fixed term) employment.

The number of employees who are unwillingly working as non-regular employees was 3.48 million persons. The number of non-regular employees who wish to become regular employees was estimated as 3.39 million persons in 2010. While non-principal household income earners, students, and elderly persons make up a considerable portion of the non-regular employees, the number of non-regular employees who are also the principal household income earners (income earners of the households with relatively low household income; excluding students and elderly persons aged 60 or older) was estimated as 1.492 million persons (which accounted for 2.9% of all employees excluding executives). It is important that we, focusing on such persons with high need for support, seek to stabilize employment and improve the treatment of employees, by providing opportunities for proper capability development, etc. We expect that the necessity of securing human resources and a more stable workforce, as well as the full implementation of the amended Labour Contract Law, will promote "diversified ways of working."

From the companies' viewpoint of motivating employees and improving productivity through securing of human resources and increasing their stability, and from the workers' viewpoint of developing careers of non-regular employees and securing more stable employment, we need to facilitate "diversified ways of working" and if the labour and management of each company achieve an appropriate combination of employees and employment forms from the medium and long term viewpoint; we expect that these efforts will lead to expansion of employment and income based on growth.

While taking into these analysis, it is necessary for both companies and workers to adjust themselves to the structural changes and to strengthen the competitiveness and human resources, in order for us to ensure sustainable growth of the future Japanese economy, and to create a "virtuous cycle" in which company profits are improved, domestic investment is enhanced, labour is moved to more productive sectors, wages and employment are increased, and consumption is enhanced.

As the globalization of economy progresses and the population keeps decreasing and aging, and the environment surrounding companies continues to change; we should support the companies to focus on the growth fields and to improve their competitiveness.

Human resource is Japan's most important resource and is the source of Japanese companies' competitiveness. It is important for us to motivate workers and fulfilling their potential and to promote stabilization of employment in the future employment system, leading to the establishment of "a society where everyone participate in social activities."

In order to strengthen and make full use of the potential competitiveness and human resources in the Japanese economy, it is important for us to promote the "labour policy toward growth" through cooperation among labour, management and the government, including labour mobility from mature sectors to growing sectors without unemployment and diversified ways of working.