One company from graduation to retirement, with seniority determining everything. It peaked in the 1980s.
The system known as lifetime employment, or shushin koyo, became the defining feature of Japan’s postwar corporate structure. Under this arrangement, large companies hired university graduates directly after commencement and retained them until mandatory retirement, typically at age 55 or 60.1 Wages rose with seniority, not performance. Loyalty was the currency.
The system consolidated during the postwar economic miracle of the 1950s and 1960s. Large companies like Toyota, Mitsubishi, and Sony offered comprehensive benefits: company housing, healthcare, recreational facilities, and a predictable career trajectory.2 In return, employees dedicated their professional lives to a single organization.
At its peak in the 1980s, roughly one-third of the Japanese workforce was covered by lifetime employment arrangements, concentrated in large firms.3 Small and medium enterprises, which employed the majority of workers, operated under different and far less secure conditions. The system was never universal, though its cultural influence extended well beyond the companies that practiced it.
After the economic bubble burst in 1991, Japanese corporations began restructuring. By the 2010s, non-regular employment, including temporary and part-time contracts, accounted for more than a third of the workforce.4 The system that once promised security to a generation of salarymen now covers a shrinking fraction of Japanese workers.