Japan’s average hourly minimum wage exceeded 1,000 yen last fiscal year, and in this year’s spring labor negotiations, many major companies agreed to pay substantially higher wages. Slightly behind the surge in resource prices, companies appear to be slowly passing higher costs on to customers while labor’s share of the national income is also gradually increasing. In the current era of human resource shortages, these developments will likely become effective means of revitalizing corporate management.

“Job satisfaction” evolving with AI

However, caution is also necessary. Improving compensation as a measure to enhance employee engagement is not something sustainable in the long term. In the short term, improving compensation will increase the chances of attracting job seekers and retaining employees. However, of course, if profits remain constant, raising wages will be a trade-off with investment in corporate growth. There is also uncertainty about whether continuing to raise compensation will lead to employee retention. There is the further possibility that, once compensation exceeds a certain level, continued hikes will not lead to much of an increase in satisfaction, and people will fall into the so-called “paradox of happiness.” Therefore, companies need to continue to provide employees with rewards other than compensation, such as a sense of purpose, self-realization through work, and opportunities for growth, and to create an environment in which each employee can leverage these to maximize their abilities.

Meanwhile, we are beginning to see a time when even values such as “job satisfaction” may become unnecessary. This is due to the replacement of jobs by AI. In the future, AI will replace not only mundane tasks, but also jobs that involve complex responsibilities. The types of work that require human involvement may become limited to decision-making in the final stage of a given process, tasks that rely on the delicate human skills of carrying or moving things, or work that appeals to human emotions, such as art. This age of AI dominance will probably arrive in the not-too-distant future, and by then, the way we think about seeking rewards and fulfillment from our jobs, and even the very raison d’etre behind the role of companies, may well have changed.

A rich life gained through “work”

The science fiction novel “Titan” (written by Mado Nozaki, published by Kodansha) depicts a world in which AI has replaced all human “work”. In the 23rd century, the setting of this story, ordinary people live lives in which they can enjoy as much as they like of the abundant goods and services that AI autonomously produces and provides, while doing only the things they like at their leisure. At first glance, this could be seen as an ideal world, but is it really? I believe that there is a richness to life that can only be gained through the existence of companies—through being able to do “work” in the venue of a company.
In the new personnel system the Nomura Research Institute (NRI) has adopted in recent years as a measure to promote engagement, one of the basic policies is “balancing career autonomy and serendipity”. “Serendipity” was included based on the empirical rule that in work, unexpected transfers and assignments that are not necessarily what one wants can often lead to great learning and wonderful encounters.
In recent years, there has been an emphasis on career autonomy, with the assumption being that employees should think about and make their own career choices. This is an important idea, and in particular, it can be said that this is a way of thinking that has been lacking in Japanese companies that have adopted a membership-type personnel system for many years. However, will the experiences and encounters of individuals really be broadened enough based on their own thoughts and intentions alone? Work enables us to experience “events that are not necessarily what we want,” and I believe this is precisely what enables us to lead more fulfilling lives.
In the world depicted in “Titan”, companies have disappeared along with work. However, even in such a world, the role of companies in “assigning compulsory work” will still be necessary. To make a slight exaggeration, I feel that without the vessel that provides this function, human evolution might come to a halt. And if companies continue to play the role of “assigning compulsory work”, the way we think about engagement improvement measures will also change.
“Work” has widely been understood to as “something you don’t want to do if you can avoid it,” and management has considered ways to improve engagement in the context of “minimizing the disadvantages and maximizing the advantages for employees.” Meanwhile, if “assigning compulsory work” is what broadens the horizons of employees, then it is possible that a combination of so-called proactive measures, such as involuntary transfers and promotions, will lead to increased competitiveness for companies and a richer life for employees.
As we enter the digital age, the nature of work, the skills required, and the work values of employees are changing year by year. While improving compensation, making the workplace more employee-friendly, and responding to the diversification of values, I would also like to work towards creating a company that is a “place with a sense of compulsion” in a positive way, which will help employees lead fulfilling lives.

Knowledge Creation and Integration, June MESSAGE

NRI Opinion: Knowledge Creation and Innovation

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