A third of Japan's new graduates leave within three years: what small workplaces can change in year one

The short answer

On 23 October Japan's Ministry of Health, Labour and Welfare published turnover figures for people who graduated in March 2023 and started work. The share who left within three years was 31.2% for university graduates (down 2.6 points on the previous year) and 36.9% for high-school graduates (down 1.0 point).

The gap by workplace size is large, though. At workplaces with fewer than five people, 58.2% of university graduates and 61.3% of high-school graduates left within three years. And, as before, more people leave in the first year than in any other. The figures do not say why people left, but the smaller the team, the more it is likely to be worth reviewing how new hires are received in their first year.

The published figures

At workplaces with fewer than 30 people, more than half of new graduates left within three years. By year, high-school graduates left at 17.4% in the first year, 11.0% in the second and 8.5% in the third; university graduates at 11.0%, 10.9% and 9.3%. Among high-school graduates, roughly half of those who left within three years did so in the first year.

By industry, accommodation and food services (61.6% high school, 49.9% university) and living-related and personal services and amusement (61.1%, 49.8%) were highest for both groups.

How to read the numbers

The statistics estimate new-graduate hires from the employment insurance enrolment notices that workplaces send to Hello Work, and calculate the rate from the date each person left. The release does not include reasons for leaving, so the figures cannot tell you why people left.

The size figures refer to the workplace, not the whole company. A small branch of a large company counts as a small workplace. The safe reading is simply that new hires tend to stay less often in smaller workplaces.

What small workplaces can change in the first year

With few hires, rates swing a lot, so start by looking at the last five years or so together. If two of four people who have reached three years left, that is 50%, about the national figure for workplaces of 5 to 29, but one person more or less changes it a great deal. List start and leaving dates and note how many months each leaver had been with you. That shows when to act. Then review the following.

For the first three months, put a monthly 15-minute check-in in the diary in advance to hear what is difficult. Check-ins that are not scheduled are the first thing dropped in a busy month. For each person who leaves, keep a short note of when, what they were working on, and the reason they gave. A few of these can reveal patterns such as "people leave after the busy season".

Points to watch

Do not aim for zero turnover. Leaving a job that does not suit you early is not always bad for the person. The aim is to reduce departures that could have been prevented.

Repeatedly raising terms for individuals only after they say they want to leave creates unfairness for those who stay. Treat pay and working hours as matters for the whole workplace. Check how working conditions must be set out with the ministry's or the Labour Standards Inspection Office's guidance. This article is a general explanation, not individual employment advice.

The ministry says it will continue to support new graduates in settling into work through services such as its Hello Work offices for new graduates.