Japanese companies are sprucing up employee dormitories to attract new workers and retain the young people they have

Some are equipped with spa-like pools with saunas and gyms, and perhaps a café to improve interaction between residents.

But these are not amenities for a top-tier apartment complex. A growing number of top Japanese companies are sprucing up the dormitories and housing facilities for their employees as a way to recruit new workers and retain the young people they have.

While many companies closed dormitories for their employees in the late 2000s, such housing has been experiencing something of a renaissance in recent years, a mutually beneficial trend. Companies struggling to fill their workforces are attracting workers who get a place to live amid persistently high housing prices.

“I have become good friends with an older employee from another department in the dorm, and the advice he gives me is very reassuring,” said a 24-year-old male employee at major trading house Itochu Corp. “And I can also save on my living costs.”

Itochu previously had four dormitories spread across different locations before opening a central dormitory in Yokohama for male employees in March 2018. About 230 employees live in the new facility, which has a large communal bath, dining room and sauna. The company plans to open a residence for female employees in 2025.

MUFG Bank plans to demolish and rebuild its large dormitory, located in Shinjuku Ward, Tokyo, in the fall of 2025. The dormitories typically have shared bathrooms and toilets, but each room in the new facility will have its own bath and toilet – a nod to a new generation that values ​​privacy.

To encourage interactions between residents, the blueprints include a laundry room with a café with a large screen TV so they can watch major sporting events together. There will also be stands for online work.

At a time when inflation is driving up housing costs in central Tokyo, the cost of living in the dormitory will be “about half” that of comparable housing in the area, a company source said.

“More time will be spent in the student house than in the office. This is a critical investment to improve our ability to attract employees,” said an official at MUFG Bank.

According to research from the National Personnel Authority, 41.6% of companies provided corporate housing in the 2022 financial year. This marked a decline from 63.9% in fiscal 2004 as companies cut benefits, but has stabilized in recent years. There is a noticeable movement among companies to improve the quality of their dormitories.

A survey by labor information agency Mynavi Corp. found that about 40% of students looking for “dormitory/corporate housing” searched under the working conditions and benefits of a potential employer – a figure that dwarfed “short working hours” and “raising children”. support.”

The manufacturing industry is seeing a trend of companies building dormitories near their regional production bases.

In 2023, major electronic components manufacturer TDK Corp. opened a dormitory in Yurihonjo, Akita Prefecture, where the largest domestic factory is located. A communal building houses a cafeteria serving dishes prepared with locally grown vegetables, and is also open to the community. The company organizes events there together with a local high school.

The prefecture’s declining population has made filling jobs a challenge. Therefore, TDK has expanded its recruitment efforts throughout the Tohoku region. “We hope that community exchanges will lead to people becoming fond of areas they don’t know much about,” a company representative said.

Kazutaka Kobara, a researcher at the NLI Research Institute, said: “In this day and age when a growing number of employees are quitting their jobs after a short period of time, comfortable corporate dormitories will help retain younger workers. Companies will have to figure out ways to increase the attractiveness of their dorms, even as the buildings age over the years.”