Teikoku Databank announced the number of “labor shortage bankruptcies” in the first half of 2024: 182, far more than the 110 cases in the first half of 2023, and on pace for a record high.
The term “labor shortage bankruptcy” refers to bankruptcies of companies that went into legal liquidation (bankruptcy) because they were unable to secure labor due to employee turnover or difficulty in hiring.
◆80% of bankruptcies were cases with less than 10 employees.
Of the 182 “labor shortage bankruptcies” in the first half of 2024, small businesses with “less than 10 employees” accounted for 80%. According to the Ministry of Health, Labor and Welfare’s Labor Force Survey (May 2024), the number of workers has increased for 22 consecutive months, and although the sense of labor shortage is subsiding, small businesses, where the damage caused by a single retiree is significant, are still expected to face a high possibility of being forced into “labor shortage bankruptcy.
◆There’s also the impact of the 2024 problem.
In the logistics and construction industries, the labor shortage caused by the overtime caps imposed by the Workplace Workplace Reform Act, which came into effect in April 2024 (the so-called “2024 problem”), led to 53 bankruptcies in the construction industry and 27 in the logistics industry, the highest numbers ever in the first half of a year for both industries. In particular, the number of bankruptcies in the logistics industry almost doubled from the 15 in the first half of 2023, due to the revision of the overtime work ceiling regulations and the Notice of Standards for Improvement.
When one employee leaves the company, the remaining employees must fill the vacancy, and in many cases, the workload becomes unbearable and a chain of resignations occurs in a domino-style fashion. It is necessary to consider measures to address labor shortages that suit your company, such as strengthening recruitment and improving working conditions to prevent employee turnover.
