To enforce this new approach, security guards and human resources personnel monitored Itochu's Tokyo office building, urging employees to leave for the day. Those who persisted were instructed to arrive early the following day to complete their tasks and receive extra compensation.
Masahiro Okafuji took on the role of CEO at Itochu Corp in 2010 with a clear goal in mind: to enhance the company's productivity and competitiveness against larger rivals in Japan. However, his approach to achieving this was rather unconventional. He decided to implement a ban on working in the office after 8 pm and significantly reduce overtime, with only rare exceptions allowed.
This decision set off a series of changes within the company, ultimately yielding surprising results and unforeseen benefits for Itochu's bottom line as well as its employees.
To enforce this new approach, security guards and human resources personnel monitored Itochu's Tokyo office building, urging employees to leave for the day. Those who persisted were instructed to arrive early the following day to complete their tasks and receive extra compensation.
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This "tough love" approach yielded positive results. A decade later, Itochu Corp., which operates diverse businesses ranging from the FamilyMart convenience store chain to metals trading, reported a remarkable over fivefold increase in profit per employee from 2010 to 2021. This surge in profitability was attributed to the combination of rising commodity prices and a weakened yen, significantly bolstering the company's financial standing.
Surprisingly, Itochu's management also witnessed an unforeseen change in the company's workforce dynamics. More female employees took maternity leave, confidently started families, and subsequently returned to their positions, indicating a positive shift in employee satisfaction and work-life balance within the organization.
"We set out to boost productivity but had no idea it would have an impact on the birthrate," Fumihiko Kobayashi, Itochu's executive vice president said.
Itochu Corp., a trading house, has become an unexpected pioneer in defying Japan's declining birthrate trend—a challenge that governments worldwide have struggled to overcome. Under the leadership of CEO Masahiro Okafuji, Itochu witnessed a remarkable increase in the fertility rate among its full-time employees.
Since Okafuji assumed the role, the fertility rate per female employee has doubled, surpassing Japan's national average. In the fiscal year ending on March 31, 2022, the rate reached nearly two children per female employee, far exceeding the country's overall rate of approximately 1.3.
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The significant spike in the birthrate attracted the attention of Atsuko Muraki, a member of Itochu's board and former director of equal employment and child welfare at Japan's Ministry of Health, Labour, and Welfare.
Recognizing the significance of these numbers, Muraki urged the company to publicly disclose the trend, aiming to convey the message that women can successfully balance both a career and raising children without compromising either aspect.
However, the revelation evoked mixed reactions. Some criticized Itochu, accusing the company of intruding into employees' personal lives and being insensitive to individuals facing reproductive challenges.
Japan has long grappled with a work culture characterized by exhausting hours and a focus on after-work socializing, making it particularly challenging for workers, especially women, to balance family life with their careers.
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Consequently, many women opt to leave the workforce altogether to take care of their children. However, Itochu Corp.'s implementation of a ban on night work has alleviated some of the pressures associated with this work culture.
Additionally, in response to the Covid-19 pandemic, employees were given the option to work from home two days a week. Furthermore, the company took further steps last year by reducing core office hours from eight to six, allowing employees to finish as early as 3 pm.
In contrast to other Japanese businesses where getting pregnant often marks the end of a woman's career, many female employees at Itochu have been able to return to work. The reduced working hours and the establishment of a daycare center near the office have made it more manageable for these employees to balance their jobs and childcare responsibilities.
This supportive environment has played a significant role in encouraging women to maintain their careers while raising children at Itochu.