AI and the Future of Work in Japan

 

We’re seeing a surge in the emergence of new IT companies leveraging a diverse range of AI technologies. From data science and natural language processing such as chatbots, to image and facial recognition, voice processing, robotics, and AI-driven medical innovations, the breadth of application is expanding rapidly.

While exact figures on the number of AI start-ups remain elusive, the momentum is clear. Since 2023, there’s been a marked increase in AI companies securing funding and pursuing IPOs, signalling strong investor confidence and a growing appetite for innovation.

This wave of AI adoption isn’t limited to start-ups. Public institutions and major private enterprises are also integrating AI to streamline operations and enhance decision-making. However, the pace of adoption among small and medium-sized enterprises (SMEs) has been uneven, often hindered by high implementation costs and varying levels of stakeholder understanding.

Some industries remain cautious, viewing AI as a risk rather than a necessity. Yet, many are watching closely, planning to follow the lead of early adopters in 2024–2025. For tech leaders, this presents both a challenge and an opportunity. In order to stay ahead, you’ll need to hire talent that not only understands AI but can also guide your organisation through its strategic implementation.

 

 

 

The rapid expansion of AI-driven IT companies in Japan has triggered a significant shift in the labour market. Demand for highly skilled professionals such as data scientists, AI engineers, and machine learning specialists has surged, creating a fiercely competitive hiring environment.

 

These roles require advanced technical expertise, and as a result, companies are increasingly looking beyond domestic borders to fill the gap. It’s now common to see annual salaries exceeding 10 million yen, especially for candidates with niche AI capabilities and international experience.

But the demand doesn’t stop at technical roles. There’s also a growing need for AI consultants and project managers, especially in public institutions and large enterprises navigating the complexities of AI implementation. These professionals play a critical role in bridging the gap between technical teams and business objectives, ensuring that AI investments translate into real-world impact.

At the same time, the rise of automation tools is reducing the need for engineers focused on manual or repetitive tasks. For tech leaders, this means rethinking workforce strategies by investing in upskilling, diversifying talent pipelines, and aligning hiring plans with the evolving demands of an AI-powered economy.

 

 

 

Despite the growing demand for specialised skills, organisations in Japan continue to face significant challenges in securing the talent needed to drive meaningful transformation. According to the 2025 Hays Asia Salary Guide, 71 per cent of employers in Japan reported experiencing moderate to severe skill shortages.

When it comes to AI adoption in the workplace, the gap is even more pronounced. Three in four professionals shared that they had not received any training or support from their employers to integrate AI technologies into their roles. Yet, there is a clear appetite for growth: Four in five professionals expressed interest in participating in upskilling programmes, should they be made available.

As more tasks become susceptible to automation, it will be essential for leaders to proactively reskill employees to meet evolving business needs. At the same time, as certain operations become more efficient through AI, demand is likely to rise in other areas, making strategic redeployment of talent critical to maintaining organisational agility.

The integration of AI must be approached thoughtfully. It’s not simply about automating tasks or replacing roles; it’s about augmenting human potential. At the core of every organisation are its people. Empowering them to adapt, grow, and lead through change will be key to navigating the future of work.

 

 

 

For companies aiming to stay competitive, investing in AI is no longer optional. But adopting new technologies is only part of the equation.

To drive meaningful growth, organisations must understand both the opportunities and the risks that come with AI integration. The goal isn’t to avoid risk altogether, but to manage it wisely. This starts with engaging the right stakeholders early, aligning on a shared vision, and preparing systems, technologies, people, and processes for the transformation ahead.

Of course, this is easier said than done. Japan continues to face a persistent shortage of skilled engineers, a challenge that is only intensifying as demand for AI expertise grows. Securing talent with both technical depth and strategic foresight is becoming increasingly difficult.

While recruitment specialists can help bridge these gaps, it’s equally important for leaders to assess how best to leverage existing resources and address the underlying challenges unique to their transformation agenda. A thoughtful, tailored approach will be essential to building a workforce that’s ready for what’s next.

Whether you're scaling a digital team, leading a transformation initiative, or future-proofing your organisation, the ability to identify and attract professionals who can work alongside AI, harness its potential, and adapt to its rapid evolution is now a strategic imperative.

I encourage you to explore our Future of Work report to gain deeper insight into the challenges and opportunities facing tech leaders, not just in Japan, but globally. The report offers actionable takeaways and real-world use cases to help you shape a strategy that fits your organisation today.

 

 

 

Yoko Takahashi is the Business Director for Technology at Hays Japan, where she leads strategic talent initiatives to navigate workforce transformation in an evolving digital landscape. With deep expertise in technology recruitment and a passion for future-focused workforce planning, she brings valuable insight into how businesses can adapt to emerging trends.