Fast Retailing, a multinational Japanese retail company, has announced plans to raise employee salaries by up to 40 per cent starting March 2023. The company hopes to improve growth and competitiveness by investing in its workforce and aligning with global standards.
Fast Retailing is implementing a salary increase in various international markets, with a focus on raising wages in Japan where they have been traditionally low. The company is revising its remuneration table and HR system to better reward employees based on their growth, ambition, and contributions to the business.
This will apply to employees at both the headquarters and corporate departments, as well as those working in stores, according to a press release.
The company aims to establish a management system that can better compensate employees and enhance growth for both individuals and the company, leading to increased global competitiveness. To achieve this, the company plans to revamp its management structure to be more flat and agile, and to shift its remuneration system to include elements such as base pay and performance-based bonuses, while eliminating position-based allowances that currently exist in Japan.
As an example of the increased compensation in Japan, the monthly salary of a new university graduate employee will increase from 255,000 yen to 300,000 yen, an annual salary increase of 18%. A new store manager in their first or second year will see their salary increase from 290,000 yen to 390,000 yen, an annual salary increase of 36%. Other employees can expect an annual salary increase of up to 40 per cent.
Going forward, the new remuneration for each employee will be determined by globally aligned grade criteria. Factors such as work performance, ability to contribute to the business, ambition and growth will be re-evaluated, and fair grade evaluations will be conducted through performance evaluations by supervisors and evaluations by upper management and the HR department.
Before this upcoming revision, Fast Retailing had already adjusted the hourly wages of store employees in Japan in September of last year, with the goal of providing fair compensation that aligns with the expectations, responsibilities, and abilities of staff who provide top-notch service to customers.
In addition to this, the company plans to restructure its organisation in order to foster cooperation and collaboration between the headquarters of each market, both globally and locally, to create an organisational structure and workstyle that promotes problem-solving.