Empowering People Through Human Resource Development

Japan is facing a population crisis, with projections indicating an 11 million worker deficit by 2040. This shortage will shrink the domestic labor pool and make it increasingly difficult to hire skilled talent. Companies like yours are actively addressing these challenges. How has this demographic shift impacted COPRO-HOLDINGS and other digital transformation and HR companies? Additionally, which economic sectors do you see as being most affected by this labor shortage?

The shrinking population and labor shortage pose significant challenges for Japan. This is one of the biggest issues of the 21st century, and while reversing the trend is difficult, we are actively working to adapt and find solutions.

One key approach is carefully selecting the markets we target. Currently, we focus on construction, IT, and semiconductors—sectors where we believe we can make the most impact. With our expertise and resources, we are committed to addressing labor shortages in these fields. While we recognize that sectors like medical services and welfare are also experiencing severe labor shortages, our company remains specialized in engineering-related fields.

The Japanese labor market is becoming more flexible and mobile, offering greater opportunities for job seekers, particularly younger generations. Compared to when I was young, mobility has increased significantly, making it a job seekers’ market. We view this flexibility as beneficial for workers, and as a company specializing in engineering talent, we see a major opportunity to enhance and expand our engineer support platform. By doing so, we can offer greater flexibility and more career opportunities for young engineers across different fields.

At CORPO-HOLDINGS, our role goes beyond simple job placement—we actively support career development for each individual who joins us. Over the past 25 years, the employment agency landscape in Japan has evolved, but our approach remains consistent. We hire workers as full-time employees and dispatch them to various client projects, ensuring they gain valuable experience while developing long-term career paths.

As someone who started my career as a construction engineer, I understand the concerns and aspirations of young professionals entering the field. My experience helps me relate to their challenges and guide them in their career paths. I want to show them that the construction industry is dynamic, exciting, and full of opportunities. More importantly, I want to provide them with role models, career pathways, and a clear vision of success, inspiring them to build fulfilling and rewarding careers.

You began your career in construction before founding the company in 2006. Since the first Tokyo Olympics in 1964, Japan's national construction policy has largely followed a "scrap and build" approach, with major firms like Obayashi, Shimizu, and Takenaka dominating the industry. Do you see this policy shifting in the future, particularly given the declining population? Have you noticed a movement toward more sustainable, long-lasting construction practices?

Overall, I believe that large general contractors are shifting toward more environmentally friendly and sustainable construction practices, particularly in material selection, cost management, and energy efficiency. However, I see buildings and infrastructure as living entities, much like humans—they require care and maintenance to ensure longevity.

While sustainability efforts are increasing, a certain level of "scrap and build" will continue to exist in Japan. Buildings cannot simply be left unattended for a hundred years; they require maintenance and renewal. This trend is reflected in ongoing investment in the construction sector, which continues to gradually increase. However, the number of workers in the industry is declining, creating a significant labor gap that must be addressed.

Another pressing issue is the so-called "2024 Problem," referring to the new overtime regulations for truck drivers. Labor shortages and logistical inefficiencies are expected to impact the construction industry, and our research shows a growing trend of companies headhunting staff, which could drive up recruiting and training costs. Do you see any opportunities emerging from the 2024 Problem, and if so, how is CORPO-HOLDINGS positioning itself to take advantage of them?

We anticipated the regulatory changes limiting overtime and knew they would eventually impact the construction industry, despite the government historically overlooking the sector while promoting work-life balance. To prepare, we began implementing overtime reductions for our staff as early as 2020, ensuring that our sales performance would remain unaffected post-2024.

You mentioned the rising recruiting costs, but we have been able to successfully recruit talent. Our current target is to hire 3,000 people per year, contributing to our recurring revenue model. Once we reach that target, we will aim for 3,500, then 4,000. Of these 3,000 recruits, about 80% come from non-construction backgrounds, transitioning from industries like service, hospitality, and retail. Our sales team effectively showcases the appeal of the construction industry, and our clients—major general contractors—are willing to train inexperienced workers, making this a mutually beneficial arrangement.

Retention is another critical challenge, and we address it through two key factors: education & training and compensation. We strive to provide the best training programs possible to help employees develop their skills and advance in their careers. In terms of compensation, while construction engineers in Japan earn relatively high salaries compared to other domestic industries, their earnings are significantly lower than those in Europe and North America. The government is pushing for wage increases, but the entire industry must consider how to provide better long-term compensation for engineers.

A specific strategy we have implemented to improve retention is our group-based dispatch system. In large-scale projects, such as an Olympic stadium, we may deploy up to 100 people. However, in smaller projects, there are cases where a single project manager from a general contractor—such as Takenaka—is paired with just one of our employees to oversee a site. This isolation can make employees feel lonely or disconnected, leading to higher turnover. To counter this, we changed our policy: if we dispatch just one person, especially a newer employee, they must be placed within an existing group. This approach has significantly improved retention.

We will continue this group-based dispatch strategy, particularly within our core focus areas: construction, IT, and semiconductors. Unlike factory worker staffing, where companies supply dozens of workers to fill entire production lines, our clients typically require fewer but highly skilled professionals. Our policy ensures that even when dispatching smaller numbers, we always place individuals within teams, fostering better integration, engagement, and long-term retention.

Your group structure includes COPRO Construction, which provides construction and plant engineers; COPRO Technology, which specializes in mechanical, electrical, semiconductor, and IT engineers; and your Vietnam operation. What synergies do you generate between these companies, and how do they complement each other?

One of the biggest synergies between our three divisions is the flexibility we offer employees to change roles within the group. As I mentioned, 80% of our recruits are young and inexperienced, and we believe it’s beneficial for them to have the freedom to explore different career paths.

We provide education and training before dispatching employees, but in some cases, a particular role may not be the right fit. When that happens, employees have the option to transition to another position within our organization, allowing them to find roles that better align with their skills and interests. This internal mobility is the greatest synergy we offer, ensuring both career growth for our employees and stronger talent retention within the group.

The semiconductor engineer training center, “Semicon Techno Lab”

In relation to employee retention, I’d like to highlight our training program, which we launched during the pandemic. At the time, many companies, including ours, were providing online training programs, but we quickly realized a key difference—employees who received in-person training had significantly higher retention rates compared to those trained online.

To address this, we established a hands-on training center in Shinagawa, Tokyo, this past April. The facility includes a simulation setup that allows trainees to gain practical, real-world experience. We now train an average of 100 people per month, led by a highly experienced instructor who has developed a comprehensive program, starting from the fundamentals.

This interactive, in-person training has been well received and has made a noticeable impact on retention rates, reinforcing the importance of practical learning in preparing our employees for success.

Japan has seen significant investment in the semiconductor industry in recent years, including TSMC’s new fab in Kumamoto in partnership with Sony and Rapidus’ development of two-nanometer wafers in Hokkaido. The government is actively working to revitalize what was once Japan’s leading export industry in the late 1980s. Given that semiconductors are a highly international business—employing technicians from Taiwan, the U.S., and South Korea—do you see an opportunity to attract foreign talent to Japan through your business? Additionally, do you view this as a growing business opportunity for the future?

Japan’s need for global talent, particularly in the semiconductor industry, is undeniable. However, with the depreciating yen and a declining GDP ranking, Japan’s competitiveness as a destination for international workers is weakening. From an outsider’s perspective, Japan is becoming a less attractive place to work and earn a competitive salary. While we recognize the necessity of foreign talent, improving the working environment for international professionals is essential.

Our challenge lies in demonstrating the value of foreign talent. While offering a higher salary could help attract international workers, we also need to convince our clients of their value. For instance, if a Japanese and a Vietnamese engineer of the same age and skill level both speak Japanese fluently, a contractor is still likely to choose the Japanese candidate if their salaries are equal. To bridge this gap, we must create additional value that differentiates foreign talent.

One key opportunity lies in digital transformation (DX), an area where skilled professionals are increasingly in demand. The construction industry, in particular, has been slow to adopt DX solutions. Even Japan’s five major general contractors lack comprehensive software and digital systems. To address this, we train our workforce—including international talent—on construction DX technologies developed by Spider Plus, one of our partner companies. However, a challenge remains: when our engineers join a client’s team, they often encounter different systems, limiting the immediate application of their expertise. Despite this, we believe DX capabilities can serve as a powerful differentiator, especially for foreign professionals.

DX adoption in the construction sector only gained traction during the pandemic. Before that, digital transformation was barely discussed in the industry. The inability to meet in person during COVID-19 finally underscored the need for digitalization. While Spider Plus is among the firms developing DX solutions for construction, the industry has yet to establish a dominant software standard. As this landscape evolves, we aim to train both foreign and Japanese professionals in the tools that gain industry-wide adoption. Ideally, Japan’s five major general contractors would collaborate to create a unified DX platform. However, company-specific approaches and corporate pride may prevent such cooperation. In that case, I hope an external DX firm will develop the simplest, most effective solution—one that naturally becomes the industry standard.

What I am saying is off the record because the general contractors are important clients, but from my point of view, the top management of the general contractors are not serious enough about adopting DX technology.

One of the key challenges for Japan’s general contractors is their decentralized management style. Even if top executives decide to adopt a specific software across the company, it won’t necessarily be implemented uniformly. Construction projects are managed on a case-by-case basis, with project managers holding significant decision-making power—including control over their budgets. As a result, one project may choose Software A, while another opts for Software B, creating inconsistencies across the company.

As a talent dispatching company, we are not in a position to advise or influence general contractors directly. However, from an outsider’s perspective, we can clearly see inefficiencies and irrational decision-making within the industry. While some decisions should be made at the executive level, the reality is that individual job sites operate with their own methods and systems. This lack of standardization leads to disparities and inefficiencies across projects.

We understand that your subsidiary in Vietnam is currently dormant. However, you previously conducted an initiative in collaboration with the Hanoi University of Science and Technology (HUST), where you trained local talent—teaching them Japanese, bringing them to Japan for further training, and then dispatching them back to Vietnam or other countries to work with Japanese companies. Could you provide an update on that initiative and share your current strategy regarding overseas subsidiaries?

We established our Vietnam entity in 2020, just as the pandemic began. Despite conducting feasibility studies, research, and thorough preparations, the project was ultimately disrupted by COVID-19. As a result, the subsidiary remains dormant, as you mentioned. For now, our focus is on strengthening our domestic operations with the goal of becoming the number one player in the Japanese market—that remains our aspiration.

That said, we recognize the ASEAN region as a critical hub for talent development. There is significant potential in these markets, and in the future, we plan to refine our strategy and redeploy leadership to Vietnam. We aim to revive our collaboration with Hanoi University of Science and Technology (HUST) to train local engineers in construction, IT, and semiconductors while equipping them with Japanese language skills.

Our broader vision is to create a virtuous cycle where internationally trained engineers can build careers in Japan. If they choose to return to their home countries or seek opportunities elsewhere in ASEAN, we want to facilitate that transition and support their continued career growth.

As the founder, CEO, and president, if we were to interview you on the final day of your presidency, what key goals or personal ambitions would you hope to have achieved before passing the company on to the next generation?

I believe our business operates within a niche model, and for us, the fundamentals are key. Our daily operations generate revenue and sustain our company, so staying true to our core values is essential. We are a people-centered organization—our success isn’t driven by selling a product, but by the talent and dedication of our people and those we work with.

When the time comes for a successor to take over, my greatest hope is that they fully embrace this people-centric philosophy, ensuring that our values remain at the heart of the business.

Corporate philosophy

Over the years, we have implemented significant reforms in our sales, marketing, and recruitment strategies, driving improvements and innovation across the business. It’s essential that this momentum continues.

Last June, I transitioned the role of president of COPRO Construction to my colleague, who now works alongside me to mentor and develop the next generation of leaders. In our business, top management must possess not only strong ideas, philosophy, and management capabilities but also the personal qualities that inspire and attract others.

I plan to continue in my role until we achieve my goal of reaching JPY 100 billion in revenue and securing the position of number one in Japan.

For more information, please visit their website at: https://copro-h.co.jp/en/