The Electronic Bookkeeping Act is a law that establishes rules for saving books and other documents as data . It was revised in 2021, and the revised version has come into effect from January 1, 2022.

However, the mandatory storage of data is scheduled to be introduced in stages in the future. Therefore, some people may be worried about not knowing when advance application will no longer be necessary.

In this article, we will explain when the electronic book storage system was revised so that advance application is no longer necessary, and how it was revised.

1. When does advance application become unnecessary for the revised electronic ledger storage?

Due to the revision of electronic ledger storage, advance application is no longer required for scanner storage after January 1, 2022 .

Until then, it was necessary to submit a notification to the director of the tax office and obtain approval. However, due to the revision of the Electronic Bookkeeping Act, the application procedure will no longer be necessary after January 1, 2022.

Data storage is now easy to incorporate, so you can start saving with a scanner or electronic data as soon as you are ready. It can be said that the new system has made many companies’ accounting operations more efficient and more flexible.

2. Six amendments to the Electronic Bookkeeping Act that came into effect from January 2022

We will explain the amendments to the Electronic Bookkeeping Act that came into effect in January 2022.

1. Timestamp requirements for electronic transactions are relaxed
2. Relaxation of electronic transaction and bookkeeping search requirements
3. Electronic data storage of electronic transactions becomes mandatory
4. Book correction/deletion history will be abolished
5. Paper storage of electronic transactions will be abolished
6. Penalties for fraud will be strengthened

2-1. Time stamp requirements for electronic transactions will be relaxed

Amendments to the Electronic Bookkeeping Act will ease timestamp requirements to prove that data in electronic transactions has not been tampered with .

Previously, when saving national tax documents in a scanner, the recipient’s signature and a timestamp within three business days were required. However, after the revision of the Electronic Bookkeeping Act, the period for time stamping has been extended to a maximum of two months, and signatures are no longer required.

Additionally, when using a system that stores the history of data deletions and modifications, there is no need to add timestamps. Complicated procedures will be simplified, and you will be able to carry out your work more efficiently.

2-2. Requirements for searching electronic transactions and ledgers will be relaxed.

Due to the revision of the Electronic Bookkeeping Act, the search requirements for national tax documents have changed . Previously, search requirements had to be set using multiple conditions, but after the revision, search requirements can be narrowed down to three items: transaction date, transaction amount, and business partner.

Additionally, when responding to download requests from tax officials, it is no longer necessary to specify ranges or combine items as in the past. It is expected to improve the efficiency of accounting operations by reducing complicated procedures.

2-3. Electronic data storage of electronic transactions will be mandatory

The revised Electronic Ledger Preservation Act has also changed the method of storing electronic data related to electronic transactions. Previously, it was permissible to print and save in paper format, but the new system requires saving in data format.

In particular, documents related to electronic transactions, such as EDI, cloud server, and PDF data invoices, must be stored as electronic data. However, please be aware that there are storage requirements that must be met when saving electronic data. Specific storage requirements will be explained later.

Storing data improves the reliability of transactions, enabling efficient accounting operations. Let’s move forward with the transition to new preservation methods while keeping in mind the key points of the law revision.

2-4. Book correction/deletion history will be abolished

An important point in the revision of the Electronic Bookkeeping Act is that the history of changes and deletions in books will be abolished . Previously, when making corrections or deletions to the contents of a ledger, it was necessary to add a reversal journal entry to clearly state the details of the correction or deletion.

However, with the new revision, it is possible to save just by adding a timestamp, so there is no need to specify the changes or deletions. As a result, complicated procedures will be simplified and you can expect efficient accounting operations.

In the future, ensuring accurate bookkeeping and record-keeping will be the key to smooth business operations. It is important to fully understand the key points of legal revisions and take appropriate measures.

2-5. Document storage of electronic transactions will be abolished

Due to the revision of the Electronic Bookkeeping Preservation Act, electronic data transactions made after January 1, 2022 are required to be saved as data. In other words , from now on, it will no longer be possible to store documents in paper form, as was the case with electronic transactions in the past .

However, there will be an “excuse period” until December 31, 2023. During the indulgence period, it is possible to print out and save it in writing if it meets the specified requirements. Use this period to put in place an appropriate data management system.

For details and requirements regarding changes to electronic bookkeeping laws, please check the tax-related information released by the government to ensure smooth business operations.

2-6. Penalties for fraud will be strengthened

Although the introduction of electronic bookkeeping has become easier due to the relaxation of the requirements of the Electronic Bookkeeping Act, the penalties for fraudulent activities have become stricter. If it is discovered that electronic data has been tampered with, an additional 10% tax will be imposed in addition to the normal heavy tax.

Also, please note that if you fail to meet the obligations regarding data storage after the grace period, your blue return approval will be revoked. Obey laws and conduct accurate and transparent accounting operations.

3. Three ways to deal with the revision of the Electronic Bookkeeping Act

From here, we will introduce carefully selected ways to deal with the revision of the Electronic Bookkeeping Law. There are three specific solutions:

1. Understand your company’s electronic transaction status
2. Be clear about where your data is stored
3. Check approvals and work flow

3-1. Understand your company’s electronic transaction status

In order to take action to revise the Electronic Bookkeeping Act, it is important to first understand the status of your company’s document storage . Let’s understand the current situation by organizing the storage ratio and format of paper and data.

Also, be sure to check the details of each electronic transaction. Particular attention should be paid to the management of IC card payment data for advance expenses and transportation expenses.

By accurately understanding your company’s situation, you can build an appropriate data management system in preparation for the revision of the Electronic Bookkeeping Act. This will help improve the efficiency of accounting operations.

3-2. Clarify where to save data

Next, it is important to create a storage location where the saved electronic data can be easily referenced and printed when needed . Instead of storing data in different locations and methods in different departments, decide on a central location to organize your data.

It is also important to establish a regular backup system to prevent data corruption or loss. Data organization and backup are essential for accurate information management and smooth business operations. Develop guidelines within your organization and clarify standards for data management.

3-3. Check approval and work flow

In order to meet the necessary requirements and ensure data storage, it is essential to review approvals and work flows. Don’t just focus on data storage; also digitize approvals and business processes .

If merchants and business processes are not reviewed, it may become difficult to respond appropriately to the revised Electronic Bookkeeping Act. Digitalize your approvals and business processes to be ready to adapt to legal changes.

4. Four points to note regarding the electronic bookkeeping method

There are four specific points to keep in mind when implementing the Electronic Bookkeeping Act:

1. Check requirements for each storage method
2. Keep records for at least 7 years
3. Electronic storage will be mandatory from January 2024
4. Check the revision points according to the FY2020 Tax Reform Outline

4-1. Check the requirements for each storage method

There are two types of preservation requirements under the Electronic Bookkeeping Act: “ensuring authenticity” and “ensuring visibility.” We will explain the storage requirements that must be met for each of the three storage methods: electronic ledger storage, scanner storage, and electronic data storage.

4-1-1. Electronic ledger storage

In order to effectively digitize bookkeeping documents, it is important to ensure authenticity and visibility . Please make sure to meet the following two storage requirements.

The first requirement is to clearly maintain a history of modifications, deletions, and additions. Ensure that data changes are tracked by using timestamps and implementing a history management system. In addition, it is necessary to consider ease of search and create an environment where documents can be quickly searched by date, transaction amount, etc.

The second requirement is to provide documentation for the system. In particular, be sure to clearly explain how to operate the electronic contract system and accounting software so that bookkeeping and document management can be done smoothly. It is also important to install high-performance color printers and displays to ensure visibility and print quality.

4-1-2. Scanner storage

When saving documents with a scanner, be sure to ensure visibility . This is because if the text is blurred or the image size is too small, it will be difficult to read.

Use a high-quality scanner, digital camera, or smartphone to preserve clarity. It is recommended that the scanner has a resolution of 200 dpi or higher and can read each color of red, green, and blue with 256 or more gradations.

Also, timestamp your saved files to ensure authenticity. In order to save accurate data and retrieve information quickly, it is important to organize it so that it can be easily searched by date, transaction amount, etc.

4-1-3. Electronic data storage

When storing data electronically, particular attention must be paid to ensuring authenticity . Regarding visibility, there is no need to pay special attention to data transactions, as the contents have already been confirmed by each other. If you use email, etc., be sure to record the date and time when data is sent and received.

However, in order to increase data reliability and maintain accurate records, truthfulness measures are required. Add a timestamp to the electronic data to prove the date and time it was created and that it has not been tampered with.

4-2. Keep accounting records for at least 7 years

Although it varies depending on the type of document, accounting records are required to be kept for at least seven years. Taking this period into consideration, it is important to comprehensively consider the operational and budgetary aspects of your organization when storing electronic data .

Carefully plan for storing electronic data by considering the personnel and budget needed to store seven years’ worth of documents. The key to success is to compare multiple storage methods, select the appropriate method, and proceed with your accounting operations effectively.

4-3. Electronic storage will be mandatory from January 2024

Compliance with the mandatory electronic storage of electronic transactions will begin in January 2024. Starting from the 2025 tax return , you will need to electronically save the entire year.

Make effective use of the remaining period and take necessary measures. If you have any questions about implementing electronic storage, we recommend that you consider seeking professional advice.

4-4. Check the revision points according to the FY2020 tax reform outline

The “ Reiwa 5 Tax Reform Outline ” announced in December 2020 includes a permanent grace period for the mandatory electronic storage if certain conditions are met .

The following three items will be revised in the FY2020 Tax Reform Outline, and permanent grace measures have been included.

• Clarification of the scope of excellent electronic ledgers
• Relaxation of scanner storage requirements
• Review of storage requirements for electronic transactions

Due to these changes in requirements, electronic storage obligations will be suspended under the following conditions:

1. The director of the tax office recognizes that there is a reason why it cannot be stored in accordance with the storage requirements.
2. Electronic data of transaction information can be downloaded smoothly for tax audits.
3. Properly save output documents so that they can be presented immediately in the event of a tax audit

Please keep in mind that this is a grace period that will only be applied if the conditions are met.

5. Follow the procedures correctly based on the Electronic Bookkeeping Act

If you want to save electronic transaction data, it is important to follow the correct procedures based on the Electronic Bookkeeping Preservation Act . Observe the two types of preservation requirements: “ensuring authenticity” and “ensuring visibility,” and take appropriate measures for each preservation method.

In preparation for mandatory electronic storage from January 2024, please review the storage status of data and clarify the storage location. Let’s make appropriate preparations for the evolution of accounting operations and take solid steps towards the future.

The deeming of the previous standard monthly remuneration during the childcare period is a system aimed at dispelling concerns about balancing childcare and work and expanding support for raising the next generation .

Of course, if you choose to work shorter hours to raise children, your salary will also be reduced. Many people may feel uneasy because if their salary decreases, the standard monthly remuneration used to calculate their future pension amount will also decrease.

If this measure is applied, even if your salary decreases while raising children, your future pension amount will not be affected.

Employers should inform employees who are raising children about the previous standard monthly remuneration during the child-rearing period and suggest that they actively utilize it.

In this article, we will introduce an overview of the previous standard monthly remuneration measures during the child rearing period, procedures, and points to note. If you are a business owner or someone in charge of labor affairs who has employees who are raising children, please use this as a reference.

1. What is the “previous standard monthly remuneration deemed measure” during the parenting period?

The “previous standard monthly remuneration measure” for the child-rearing period is a system that allows you to receive a pension amount calculated based on the standard monthly remuneration before raising your child .

Many employees choose to work shorter hours after childcare leave, and their standard monthly compensation tends to decrease. The amount of employee pension you will receive in the future is determined by your standard monthly remuneration, so if the standard remuneration decreases, the pension amount you will receive will also decrease.

The purpose of this measure is to allow employees to raise their children with peace of mind without reducing their future pension amount even if their standard monthly remuneration decreases due to childcare.

Employers are not obligated to make an announcement to employees, but they should proactively approach insured employees who are returning from childcare leave.

2. Subject to deeming measures for previous standard monthly remuneration during the parenting period

The previous standard monthly remuneration deeming measure during the child-rearing period applies to insured persons who are raising children up to the age of three . This applies not only to biological children but also adopted children up to the age of three .

Even if you quit your job before raising your child, you can still receive this measure if you re-employ the child before he or she turns 3 years old.

However, please note that if you have not been covered by the Employees’ Pension within one year from the month before you start raising your child, you will not be covered.

There are no restrictions on the gender of the insured person, so both men and women can apply.

Example of subject to deeming measures for previous standard monthly remuneration during child rearing period

• Those who choose to work shorter hours after childcare leave
• Those who have not taken childcare leave but whose standard monthly remuneration has decreased due to short working hours
• Those who quit their job due to childbirth but started a new job (limited to those who were insured within one year)
• If both husband and wife work, each person (not only the child’s mother but also the child’s father)

3. Procedures for deeming the previous standard monthly remuneration during the parenting period

In order to receive the application of the previous standard monthly remuneration measure during the childcare period, the employer must complete the necessary procedures.

Employers who receive a request from an employee must submit the necessary documents to the pension office. If you are not insured at the time of filing due to retirement, etc., you will have to submit it directly.

Applications should be submitted to the administrative center operated by the Japan Pension Service or the relevant pension office, and can be submitted by bringing the application in person at the counter, electronically, or by mail.

If you choose to bring your application to the counter, you can only submit it to the pension office, which is the pension office that has jurisdiction over the location of your business. Please check the Japan Pension Service’s official website for the jurisdiction of the pension office.

Electronic applications can be applied 24 hours a day in an internet environment, reducing time and costs . It would be a good idea to make active use of it.

4. Necessary documents for deeming the previous standard monthly remuneration during the parenting period

We will introduce the necessary documents in order to qualify for the previous standard monthly remuneration for the childcare period.

Please make sure you have all the documents before submitting to avoid any omissions.

4-1. Required documents

The documents to be submitted are the ” Application form for special monthly standard remuneration for child rearing period/Notification of termination “.

You can download the “Application Form/Notification of Special Monthly Monthly Exception for Parenting Period” from the Japan Pension Service website. There are sample entries, so be sure to check to make sure there are no omissions or mistakes.

4-2. Attached documents

You will need to prepare several supporting documents in conjunction with the “Application Form/Notification of Special Monthly Remuneration for Childcare Period Standard Remuneration”.

Please note that the documents to be attached will differ depending on the circumstances and conditions of the insured person .

A case pending certificate is a document issued by the family court, and a notice of action decision is a document issued by an automatic counseling center.
All attached documents will take time to reach you. Documents issued by government offices are valid if issued within 90 days, so we encourage you to obtain them early.

When an employer carries out the procedures, it will be smoother if the employer not only provides an overview but also explains the required documents and attached documents to the employees.

5. Two points to note regarding the deeming of the previous standard monthly remuneration during the parenting period

There are two points to keep in mind when considering the previous standard monthly remuneration during the childcare period:

1. If you have multiple workplaces, submit a tax return for each workplace.
2. When the parenting period ends, submit a “Notification of Termination”

Employers should thoroughly understand each and explain them appropriately to their employees.

5-1. If you have multiple workplaces, submit a tax return for each workplace.

If you worked at multiple workplaces during the period this measure applies, you will need to submit an application form for each insured period at each workplace.

Even if you fail to apply, you can apply retroactively for two years. If you notice that an application has been omitted, suggest that the employee complete the procedure as soon as possible.

5-2. When the parenting period ends, submit a “termination notification”

If the parenting period ends for certain reasons, you will need to submit a “Notification of Special Termination of Standard Monthly Remuneration for the Parenting Period”. Please check the following for the necessary procedures.

Even in the case of terminating this measure, the employer who receives the request from the insured person basically submits the request to the pension office.

6. Appropriately inform employees about the previous standard monthly remuneration measures.

The deeming of the previous standard monthly remuneration during the child-rearing period is a system that has benefits for those raising children.

In Japan, women are more likely to take childcare leave, so there are fewer requests from men. Informing employees who have given birth to a child about this measure, regardless of whether they are male or female, will help prevent failure to report.

When reporting this measure, it is necessary to attach documents issued by the government office. Please have your employer or labor affairs representative explain not only the outline of the system but also the required documents and request them to obtain them as soon as possible.

Let’s support employees in balancing work and child-rearing by providing appropriate guidance regarding the previous standard monthly remuneration during the child-rearing period .

In order to prevent employees from quitting their jobs, it is necessary to improve work-life balance and ask employees about their reasons for quitting.

There are many people who are worried about “I want to know the reasons why employees leave their jobs” or “I want to know how to prevent employees from leaving their jobs.”

In this article, we will explain the causes of employee turnover, measures to prevent turnover, and success stories. By reading to the end, you will be able to understand the reasons why employees leave their jobs and specific measures to prevent them from leaving their jobs.

1. What is turnover prevention?

Turnover prevention means preventing employees from leaving their jobs .

Efforts to prevent employee turnover are sometimes called “retention management.” “Retention” means “maintenance/retainment.”

The reasons for turnover vary depending on the employee, so in order to prevent turnover, it is necessary to understand the cause as early as possible and take measures.

2. Five necessities to prevent job turnover

There are four reasons why employees need to work to prevent employee turnover:

1. Difficult to secure young human resources
2. Increased burden on existing employees
3. The costs associated with hiring and training human resources are large.
4. affect the company’s image

2-1. Difficult to secure young human resources

Currently, Japanese companies are having difficulty securing young human resources. The following are probably the reasons why it is becoming difficult to secure young human resources.

• Declining birthrate and aging population
• Activation of job change market
• Outflow of human resources from rural areas to urban areas

As the working-age population is decreasing due to the declining birthrate and aging population, the labor shortage is expected to become more serious in the future.

In addition, seniority and lifetime employment have collapsed, and changing jobs has become the norm. There is still an outflow of human resources from rural areas to urban areas, and small and medium-sized enterprises in rural areas continue to have difficulty securing human resources.

In order to avoid having to struggle to secure human resources, it is necessary to prevent turnover.

2-2. Increased burden on existing employees

When an employee leaves the company, the burden on existing employees increases. A temporary increase in work load is unavoidable as employees will be taking over the duties of departed employees in addition to the duties they are already responsible for.

In addition, burdens on existing employees arise in various ways, such as:

• Leads to turnover of existing employees
• cause a decrease in motivation
• Loss of know-how and skills due to job separation

If an employee leaves the company and the workload of the existing employee increases, there is a high possibility that the existing employee will leave the company. When a talented employee leaves the company, it causes a decrease in the motivation of the employees around them.

Additionally, when a mid-level employee leaves the company, the know-how and skills that they have cultivated over a long period of time are lost, resulting in a significant loss for the company .

In order to avoid increasing the burden on existing employees, it is necessary to prevent them from leaving their jobs.

2-3. Costs related to recruiting and training human resources are large.

Recruiting human resources is costly, which places a large burden on companies. Specifically, the following costs will occur:

• Job posting cost
• Brochure creation fee for company information
• Applicant’s transportation and accommodation expenses
• Costs when requesting training to an external instructor
• Venue costs when conducting training

The costs of transportation and accommodation will increase as more people are hired . If employee turnover is not prevented, the costs will only increase.

2-4. Affects company image

A high turnover rate due to frequent employee turnover will affect the company’s image. A high turnover rate is associated with a poor working environment , making it difficult to attract job seekers.

Once your image is down, it will take time to recover. In order to avoid damaging the company’s image, it is necessary to prevent employee turnover.

3. 5 reasons why employees leave their jobs

There are five reasons why employees leave their jobs:

1. Job content doesn’t match
2. Not an environment where you can grow
3. low salary
4. poor work-life balance
5. bad interpersonal relationships at work

3-1. Job content does not match

If the job content is not suitable, it will lead to stress and loss of motivation, which may lead to employees leaving the job. There are several reasons why employees feel a mismatch:

• I don’t feel motivated
• There are many difficult jobs
• does not match the required ability
• The company culture doesn’t suit me-

It’s easy to feel a mismatch if you don’t get a sense of fulfillment or accomplishment from your work, or if there are many tasks you’re not good at.

If the skills the company wants and the skills you have don’t match, you’ll make repeated mistakes and feel more tired, leading to you leaving your job.

Also, if the company culture doesn’t suit you, it’s easy to feel a mismatch in your compatibility with your boss and the way you approach your work .

3-2. Not an environment where you can grow

If the company does not provide an environment in which employees can grow, it may cause them to leave the company. This is because if you don’t feel like you’re improving your skills, you’ll feel anxious about your future career , and you’ll think about changing jobs to a company where you can grow.

The characteristics of an environment that does not allow for growth include:

• no discretion
• Lots of simple work
• afraid of change

Even if employees are motivated, if the company does not give them discretionary authority and only assigns them simple tasks, it is not an environment in which they can grow.

Additionally, if a company sticks to existing rules, employees will lose their desire to take on challenges, and will likely decide that they cannot grow and leave the company.

3-3. Low salary

Low pay causes a decrease in motivation for work, leading to employees leaving their jobs.

Low pay due to the following reasons may also lead to employees leaving their jobs:

• Not commensurate with workload and responsibility
• Don’t give raises based on performance

Dissatisfaction can easily arise if the pay does not match the workload and responsibility. Additionally, if pay increases are not based on employee performance, such as seniority, this can lead to talented young employees leaving the company .

3-4. Poor work-life balance

Poor work-life balance and lack of time for personal life can lead to employees leaving their jobs.

If you work long hours and have to work a lot of overtime , there will be no balance between your work and private life, and you will easily get tired, making it difficult to work efficiently .

Reasons for poor work-life balance include:

• Personal wishes are not met
• There is no flexibility in working style
• Difficult to gain management’s understanding

If personal wishes, such as vacation time, are not met, people end up prioritizing work and not having time for their private lives.

The inability to change work styles flexibly, such as flextime or remote work, can also lead to inability to find time for things other than work.

Furthermore, even if employees actively work to improve their work-life balance, it will be difficult to improve unless management changes their mindset.

3-5. Poor interpersonal relationships at work

Poor interpersonal relationships at work, including compatibility with superiors, can lead to employees leaving their jobs. There are several reasons why interpersonal relationships at work deteriorate:

• boss doesn’t accept opinions
• A communication error has occurred
• Unable to share information

If superiors do not accept the opinions of their subordinates or if communication is frequently disrupted, interpersonal relationships deteriorate.

Additionally, if employees are not able to share information on a daily basis, teamwork will be poor and a feeling of alienation will occur.

4. Seven specific measures to prevent job turnover

There are seven specific measures to prevent employee turnover:

1. give discretion
2. Responding to diverse work styles
3. Share company goals and vision
4. Ask about the reason for resignation in a situation where you can speak your true feelings.
5. Improve work-life balance
6. Create opportunities for interviews and communication
7. Improving the management skills of managers

4-1. Give discretionary authority

To prevent turnover, it is necessary to give employees discretion. Giving employees discretion will help them feel more motivated and improve their skills, giving them a sense of fulfillment in their work.

Specifically, discretionary powers include the following:

• Entrusted with responsible work from a young age
• ideas are put to use
• opinions reflected

When considering measures to prevent employees from leaving the company, check whether the company has discretionary authority.

4-2. Respond to diverse work styles

In order to prevent employee turnover, it is necessary to accommodate diverse work styles. If work hours and work locations are limited, life events such as marriage or child rearing may make it difficult to work.

Examples of diverse working styles include:

• Flextime system
• remote work
• Staggered work hours
• short working hours
• side job

Supporting a wide range of work styles makes it easier for employees to work, thereby preventing them from leaving their jobs.

4-3. Share company goals and vision

To prevent turnover, share your company’s goals and vision with your employees. Without a clear path to achieving the company’s goals and vision, employees will feel uncertain about the company’s future prospects.

Sharing your vision will be easier if you follow the steps below.

• Understand your company’s current role and external environment
• Predicting issues that may arise in the future 5 or 10 years from now
• Predict your future role
• Clarify the vision while incorporating employee opinions
• Share and disseminate within the company

In order for the vision to permeate the company, it is necessary to gain understanding from employees, so incorporating opinions from people other than management will make things go smoothly.

4-4. Ask about the reason for resignation in a situation where you can tell the truth

To prevent employees from quitting their jobs, ask them about the reason for their resignation in a situation where they can talk about their true feelings. Interviewing employees who are retiring can lead to the discovery and resolution of issues.

The contents of the hearing are as follows.

• Reason for wanting to retire
• Company problems
• What’s good about the company
• Is there support from your supervisor?

Since interviews need to bring out the true feelings of employees, we recommend that you assign a senior employee or someone you can talk to to conduct the interviews.

4-5. Improve work-life balance

Having a good work-life balance will make your work more rewarding and enjoyable, which will prevent you from leaving your job and improve your productivity.

Here are some ways to improve your work-life balance:

• Identifying the causes of poor work-life balance
• Review existing operations and utilize new flows and tools
• Gain management understanding

In recent years, there are many IT tools that can be expected to improve work efficiency, so if you have not yet implemented them, please take advantage of them.

4-6. Create opportunities for interviews and communication

In order to prevent employee turnover, it is necessary to provide opportunities for interviews and communication. By holding regular interviews and increasing opportunities for communication between employees, you will be able to prevent your employees from burdening themselves with their worries.

Specifically, we recommend the following method.

• Have regular meetings to share concerns and issues
• Introduce a mentor system
• Increase opportunities to interact with peers such as training
• Change to free address

In order to prevent early turnover, we must take time to follow up with young employees in particular and actively communicate with them.

4-7. Improving the management skills of managers

To prevent employee turnover, it is necessary to improve the management skills of managers.

If the management skills of managers improve, a good work environment will be created and human resources who can grow on their own will be developed. This will also improve the motivation of your subordinates.

In order to improve the management skills of managers, the following is necessary:

• Improving problem-solving skills
• Improving decision-making power
• Improving communication skills

Efforts to improve the management skills of managers through regular guidance and training by management will help prevent turnover.

5. 3 success stories for preventing job turnover

Below are three examples of success in preventing employee turnover.

• Sharing opinions with employees
• Strengthening the follow-up system for new employees
• Improving productivity and working environment

5-1. Sharing opinions with employees

The success story of Company A, which operates a personal training studio, is as follows.

5-2. Strengthening the follow-up system for new employees

The success story of Company B, which operates a restaurant business, is as follows.

5-3. Improving productivity and working environment

The following is a successful example of Company C, which operates a lodging business.

6. Improve internal conditions and prevent employee turnover

Employee turnover can occur for a variety of reasons. Since it is becoming difficult to secure young human resources, we must start taking measures to prevent them from leaving their jobs as soon as possible.

After understanding the reasons for employees leaving their jobs by interviewing them about their reasons for leaving their jobs, let’s take concrete actions to prevent them from leaving their jobs.

Human resource retention is a state in which employees continue to work stably over a long period of time without leaving the company. If the human resource retention rate improves, you can achieve effects such as “improved productivity and efficiency” and “easier increase in the number of talented human resources.”

However, many people may be worried, saying, “I know it’s better to retain human resources, but I don’t know exactly what to do.”

In this article, we will explain the current situation, benefits, and specific measures for retaining human resources for those who are facing issues with retaining human resources .

1. What is human resource retention?

Human resource retention is a state in which employees continue to work stably over a long period of time without leaving the company . By retaining human resources, companies hope to prevent the loss of talented personnel and ensure that they remain active over the long term.

“Retention,” which is attracting attention in the human resources field, means “retention, maintenance, and retention,” and is a word that refers to efforts to retain human resources.

In recent years, resistance to changing jobs has decreased due to the diversification of work styles and the fact that it has become easier to start a business than before. Many companies recognize that retaining human resources is an important issue, as a loss of talented human resources leads to a decline in productivity and an increase in recruitment costs.

There are many job seekers who consider the staff retention rate as a deciding factor when choosing a company. A low staff retention rate can lead to a situation where new staff are not brought in.

In order to stop the outflow of talented human resources and continue to grow companies, efforts to retain human resources are essential regardless of company size or industry.

2. Current status of human resource retention in Japan

We will explain the current state of human resource retention in Japan from the following perspectives.

• Human resource retention rate in Japan
• Human resources retention rate by industry

I will explain each in detail.

2-1. Human resource retention rate in Japan

According to the “Summary of the 2020 Employment Trend Survey” released by the Ministry of Health, Labor and Welfare, the turnover rate for companies as a whole in 2020 was 15.0%. On the other hand, the retention rate is 85.0%.

The following table shows the results of a survey conducted by the Ministry of Health, Labor and Welfare in 2021 on the reasons why new employees quit their previous jobs.

Approximately 40% of all employees leave their jobs due to dissatisfaction with the company’s work content, evaluation, or working environment.

2-2. Human resources retention rate by industry

According to the Ministry of Health, Labor and Welfare, the retention rates by industry for FY2020 are as follows.

In FY2020, while the retention rate is high in the financial industry and mining/quarrying industry, the retention rate in the service industry is low .

In particular, the “accommodation/food service industry” is the only industry with a retention rate of over 70%, and it can be said that it is an industry where efforts to retain human resources are important.

3. Three benefits to increase human resource retention rate

There are three benefits to increasing staff retention rates:

1. Reduce recruitment and training costs
2. Improve productivity and efficiency
3. It becomes easier to increase the number of talented human resources

I will explain in detail.

3-1. Recruitment and training costs can be reduced

By increasing the retention rate of human resources, it is possible to reduce costs related to recruitment and training.

If human resources are left behind, new employees will have to be hired and trained, which will require a lot of cost and time to complete the training.

On the other hand, if we can prevent the outflow of human resources, it will lead to a decrease in recruitment opportunities, and as a result, we will be able to reduce recruitment and training costs .

3-2．Improve productivity and efficiency

The second advantage is that increasing the retention rate of human resources also leads to improvements in productivity and efficiency.

Even within the same person, new employees and veterans have different work skills. Therefore, companies with many employees who continue working for a long time are more likely to improve productivity .

In addition, teamwork among employees who have worked together for a long period of time improves, so you can expect to improve work efficiency even without special measures.

On the other hand, in companies with a high turnover of personnel, there are many cases where employees are unable to carry out their original duties due to the large number of handovers. As a result, it becomes difficult to work on the original work, leading to a decline in productivity.

3-3. It becomes easier to increase the number of talented human resources

The third benefit is that it will be easier to increase the number of talented human resources.

A high staff retention rate gives the impression that the company is a rewarding company and a company that is easy to work in, which is a strong appeal to job seekers.

If you promote your work with specific data on your company’s website or employment site, you will increase the chances that talented people will apply .

In addition, there are cases in which employees who feel that their company’s environment is good will introduce people from outside the company.

4. Reasons why human resources are not retained

Reasons why companies do not retain human resources include:

Companies that are struggling with low staff retention rates are likely to be giving their employees the same feeling as above.

No matter how many measures are taken to increase human resource retention, unless the root cause is eliminated, the retention rate will not improve.

Therefore, before implementing measures to retain human resources, it is important to reflect on the current situation and clarify what kind of existence the company represents for its employees.

5. Five measures to retain human resources

Here are five measures to help retain human resources.

1. Prevention of mismatch
2. Improving the working environment
3. Introduction of a flexible working system
4. Introduction of a system that allows for appropriate evaluation
5. Implementation of training and skill development

If you are facing challenges in retaining human resources, please refer to this guide.

5-1. Prevention of mismatch

The first is to prevent mismatches.

If the company and the job seeker are hired without a mismatch in their perceptions, the difference between the image and the reality will reduce motivation , making it more likely that the employee will leave the job.

As an example, you may want to take the following measures:

• Disseminate internal information and work details to the outside world
• Create an environment where you can speak honestly during the interview

Specifically, we will communicate information through our official website and social media, and conduct interviews with as few people as possible.

5-2．Improving the working environment

The second is to improve the working environment.

Many people leave their jobs due to poor working conditions , such as long working hours, frequent holidays , and difficulty in taking paid or childcare leave.

If you have an environment like the one above, you need to understand your company’s situation and make improvements. Specifically, the following are effective.

• Introduction of a complete five-day weekend system
• Establishment of a consultation desk

However, there is no point in introducing a system just for the sake of it. There is always a cause for a bad working environment, and even if you introduce a system without solving it, there is a high possibility that it will fade away in the near future.

When working on improvements, it is a good idea to understand the root cause and improve the problem, and introduce systems as necessary.

5-3. Introduction of a flexible working system

The third is the introduction of a system that allows for flexible working.

In recent years, more and more people are placing importance on balancing work and life, or so-called “work-life balance.”

Therefore, introducing telework and flextime to accommodate diverse lifestyles will lead to improved human resource retention rates.

It is also important to create an atmosphere in which supervisors actively encourage employees so that they can use the systems provided without hesitation.

5-4．Introduction of a system that allows for appropriate evaluation

The fourth measure is to introduce a system that allows for appropriate evaluation.

If employees feel that their accomplishments are not being properly evaluated, they will lose motivation to work, and in some cases, this may lead to them leaving the company.

In order to prevent the loss of human resources due to evaluation methods, it is effective to introduce a system that allows for appropriate evaluation. For example, there is the following evaluation system.

Additionally, cases where evaluation criteria are not well understood can easily lead to employee dissatisfaction. Therefore, it is important not only to introduce a system but also to clarify and disseminate evaluation criteria.

5-5．Implementation of training and skill development

Creating opportunities for in-house training and skill development is also effective in improving staff retention.

Young employees in particular tend to have a strong desire to improve their skills. Having plenty of opportunities to grow will increase your motivation .

Additionally, if there is more training and skill development, there will be a better follow-up system, which can be expected to have the effect of preventing early resignation.

6. Retain human resources and increase productivity

Human resource retention refers to measures to prevent the outflow of human resources and create an environment where talented human resources can continue working for a long period of time.

This is an important issue in today’s world of high mobility of human resources, and many companies are working to improve retention rates.

There is always a reason for low retention rates. If you review your company’s situation, clarify the issues, and take the necessary measures, your retention rate will improve.

Use this article as a reference to retain many talented people and grow your company significantly.

In April 2024, the “clarification of working conditions” will be revised. Clarification of working conditions is required by the Labor Standards Act, and it is important to understand them accurately as violations may result in penalties.

Companies will be required to respond appropriately to revisions to explicit labor conditions. However, there are probably many people who are worried that they don’t know what the revision will change or what they should do.

In this article, we will introduce specific details regarding the revision of labor conditions specification. Please use this as a reference as we will explain the measures that companies should take and precautions to take.

1. What is the April 2024 amendment to rules clarifying working conditions?

Labor conditions will be revised on April 1, 2024 (Reiwa 6). The purpose of clarifying working conditions is to prevent labor-management troubles and protect workers after an employment contract is concluded.

According to Article 15, Paragraph 1 of the Labor Standards Act, “Clarification of working conditions,” companies are required to clearly state the working conditions when hiring employees. When hiring, a “Notice of Working Conditions” must be issued.

If the stated working conditions differ from the facts, the worker will be asked to cancel the labor contract. Items can be categorized into items that require written documentation and items that require verbal documentation.

Four new items will be added as a result of the amendment to the labor conditions specification. Companies will be required to accurately understand the new clarification items and respond appropriately.

2. Four items added and revised content under the rules clarifying working conditions

The following items will be added in the revision of the labor conditions specification.

1. Clarify the scope of changes in work location and duties
2. Clarification of update limit
3. Clarification of application opportunities for indefinite conversion
4. Clarification of working conditions after indefinite conversion

We have summarized the target audience, specific content, and when to clarify.

2-1．Clarify the scope of changes in work location and duties

All workers will be required to clearly state the scope of changes to their workplace and duties. It will be easier to understand if you consider that the scope will be added to the “place of work” and “contents of work” that were required before the revision.

It is required to indicate this at the time of concluding a labor contract or renewing a fixed-term employment contract. The scope of change refers to the scope of work locations and duties that are expected to change due to future reassignment.

On the other hand, in the case of full-time employees whose employment is assumed to be long-term, it may be difficult to clarify the scope of changes at the time of signing the labor contract. Care must be taken as there may be discrepancies between the facts and the facts after employment.

In cases where it is difficult to predict, please describe the scope of the change in work location and duties as broadly as possible. In addition, please clearly state the clauses regarding reassignment in the work regulations and the right to give orders based on personnel rights.

2-2. Clarification of update limit

After the revision of the clearly stated working conditions, it is necessary to “clarify the upper limit for renewal” for fixed-term contract workers. The renewal limit refers to the total contract period or the maximum number of renewals for a fixed-term contract.

When concluding and renewing a fixed-term labor contract, it is important to clearly state whether there is a renewal limit and the details. Furthermore, in the following cases, explanations to fixed-term contract workers are required.

• When establishing a new renewal limit after the initial contract is concluded
• When shortening the renewal limit set at the time of the initial contract conclusion

When establishing or shortening the renewal limit, it is important to carefully explain the detailed reasons in advance. Prepare in advance so that you can explain your reasons smoothly.

2-3．Clarification of the opportunity to apply for indefinite conversion

After the revision of the labor conditions specification, it is necessary to clearly state to fixed-term contract workers that it is possible to apply for conversion to an indefinite term contract. In accordance with the “Indefinite Conversion Rules,” this indicates the timing at which the “Indefinite Conversion Application Right” occurs.

Indefinite-term conversion rules are rules that allow fixed-term workers to convert their contracts into indefinite-term labor contracts (labor contracts with no fixed period) upon application. When a fixed-term labor contract is renewed for more than five years, the right to apply for indefinite-term conversion arises.

For example, if the contract period is one year, you can apply for one year after the fifth renewal, and if the contract period is three years, you can apply for three years after the first renewal. If you apply, an indefinite labor contract will be established.

2-4．Clarification of working conditions after indefinite conversion

The amendment to the specification of working conditions will require the “working conditions after indefinite conversion” to be clearly specified. Just as clearly indicating the opportunity to apply for indefinite conversion, it is important to indicate the timing when the right to apply for indefinite conversion occurs.

We decide on working conditions after considering the balance with regular employees, and provide explanations to fixed-term contract workers. When determining working conditions, take into account the principle of “equal pay for equal work,” which prohibits unreasonable differences in treatment between regular and non-regular workers.

3. Three actions companies should take when revising rules to clarify working conditions

We have summarized three measures that companies should take before the revision of the labor conditions specification.

1. Review of working conditions notice
2. Reconfirmation of renewal limit for fixed-term contract workers
3. Understanding fixed-term contract workers to whom the indefinite conversion rule applies

Check out what you need to do and be prepared.

3-1．Review of working conditions notice

In order to respond to amendments to clearly stated working conditions, it is necessary to review the working conditions notice. You will need to create a new one with four additional items in mind.

The Ministry of Health, Labor and Welfare has released an image of the revised working conditions notice, so please refer to it. For clauses that are difficult to include in the notice of working conditions, consider stating them clearly in the employment regulations.

3-2．Reconfirmation of renewal limit for fixed-term contract workers

In order to respond to the explicit renewal limit, we will confirm the number of contract renewals and total period for fixed-term contract workers. It is important to check the current working conditions.

When concluding and renewing a fixed-term labor contract, be prepared to clearly state whether there is a renewal limit and the details. When establishing or shortening the update limit, it is important to summarize the detailed reasons for explanation.

3-3．Understanding fixed-term contract workers to whom the indefinite conversion rule applies

We will list fixed-term contract workers to whom the indefinite conversion rule applies. Please clarify the timing of each indefinite conversion application right.

At the same time, it is important to organize the work within the company and consider the working conditions after the indefinite-term conversion. The working conditions after indefinite-term conversion must be clearly stated in writing, so be prepared.

4. Two points to note regarding amending rules for clarifying working conditions

There are two points to keep in mind in order to respond to the revised rules clarifying working conditions:

1. Companies cannot refuse applications for indefinite conversion.
2. You will not become a full-time employee even after converting to an indefinite period.

Please check in advance to avoid trouble with your workers.

4-1．Companies cannot refuse applications for indefinite conversion.

If a fixed-term contract worker is offered a permanent contract, the company cannot refuse. An indefinite labor contract will be established once the application is submitted.

Termination of employment (refusal to renew the employment period) after an application has been made is prohibited. It is also undesirable to terminate employment before the right to apply for indefinite conversion occurs in order to avoid the indefinite conversion rule.

Furthermore, the amendment to the Employment Termination Notice will no longer allow companies to unilaterally establish or shorten the renewal limit. It will be necessary to give an explanation in advance, and you will be asked to respond carefully.

Legally speaking, it is valid to make an application verbally, but there is a risk that a dispute will arise later as to whether the application was made or not. When you receive an application, it is recommended that you provide a written document to the worker.

4-2. You will not become a full-time employee even after converting to an indefinite period.

Even if an indefinite-term labor contract is established, a fixed-term contract worker does not become a permanent employee. This simply changes the fixed-term labor contract to an indefinite-term labor contract, allowing you to work without a fixed contract period until retirement.

Therefore, there is no need to apply the same working conditions as regular employees. There is no problem if you simply change the employment period to indefinite term while maintaining the same working conditions as before the conversion to indefinite term.

Since there is no upper limit to the working period for indefinite-term convertible employees, the retirement age is determined by the employment regulations. It is also recommended to set a second retirement age in case an employee becomes an indefinite-term convertible employee beyond the retirement age.

5. Understand the details of the explicit amendments to working conditions

The April 2024 amendment to the Labor Conditions Explanation will add four clarifications. In case of violation, a fine of up to 300,000 yen may be imposed, so companies will be required to take appropriate measures.

In order to avoid trouble with workers, it is important to understand three actions that companies should take and two points to be careful of. Please be prepared to strictly comply with the revised working conditions.

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