TOKYO: Fast Retailing Co., the operator of Uniqlo and other clothing shops, said Wednesday that it will raise annual salaries of around 8,400 full-time and other workers in Japan by up to 40 percent.
The company will revamp its salary system in March in hopes to secure talented workers.
With the change, the starting monthly salary of new employees will rise to 300,000 yen from the current 255,000 yen, and their annual pay will go up about 18 percent.
The monthly salary of store managers in the first or second year at the Fast Retailing group will be increased to 390,000 yen from 290,000 yen, with their annual pay set to rise by around 36 percent.
It will be the first time for Fast Retailing to implement an across-the-board wage hike under its current salary system.
Although the move will raise the company’s domestic labor costs 15 percent, the increase can be offset with an improvement in productivity from its work style reform measures including cuts in overtime, according to Fast Retailing.
Fast Retailing employees currently earn as much as around 9.59 million yen in average annual salary. As the figure is still lower than at many global companies abroad, however, the Japanese group found it necessary to offer more attractive pay amid the intensifying global competition for talent.
In September last year, Fast Retailing raised hourly wages of most of the group’s part-timers, totaling around 41,000, by some 20 percent on average. Fast Retailing plans to increase wages of the remaining some 7,000 regional regular employees as well.
The company will also consider setting up a system rewarding employees aiming to become sales experts rather than store managers or management executives.
At a press conference the same day, Japanese Chief Cabinet Secretary Hirokazu Matsuno welcomed Fast Retailing’s decision.
“Continued wage hikes are the best way for tackling rising prices,” he said, adding, “The government will back up such moves.”