In recent years, Japan’s changing workforce dynamics have pushed local businesses to explore hiring foreign workers. Companies in rural areas, especially, are now relying heavily on foreign labor to stay afloat amidst the country’s shrinking population and labor shortages. Two such businesses, a traditional confectionery and a steel manufacturing company, illustrate how integrating foreign workers is shaping their operations and survival strategies.

The Hizatsuki Confectionery: A Century-Old Legacy Adapting to Change

Hizatsuki Confectionery, nestled in the mountainous region north of Tokyo, has been producing rice crackers since 1923. Formerly known as Teikoku Senbei (Imperial Rice Crackers), the business is now managed by Takeo Hizatsuki, the company’s third-generation president. Facing a dwindling local workforce, Mr. Hizatsuki made a bold decision in 2020: hiring 10 Vietnamese workers to fill the gap.

This change wasn’t easy. Japanese employees were initially unsettled by the introduction of foreign colleagues. However, Mr. Hizatsuki emphasized the necessity of adapting to survive. “To continue feeding the Japanese people, we must first ensure our business survives—and that means embracing foreign workers,” he explained.

Over time, the confectionery implemented policies to retain its new workforce. Regular communication with foreign employees was prioritized through translators, and annual wage increases were applied equally to both Japanese and foreign staff. Plans to promote non-Japanese workers to managerial roles reflect the company’s intent to provide career advancement opportunities—a key factor for retaining talent.

With foreign employees now making up a significant portion of the company’s 210-person workforce, Mr. Hizatsuki anticipates that half of his employees in the next generation will need to come from abroad. “We have to make this work,” he said, as he prepares to pass the business to his son.

Daiwa Steel: Fostering Family Integration to Encourage Long-Term Commitment

In Tochigi Prefecture, north of Tokyo, Daiwa Steel Tube Industries faces a similar challenge. Established 92 years ago, the company manufactures steel tubes for scaffolding and other applications. In recent years, it began hiring foreign workers, including Tran Vinh Trung, who moved from Vietnam in 2022. Mr. Trung’s wife and children joined him last year, settling into an apartment in Utsunomiya, the prefecture’s capital.

Shinichiro Nakamura, Daiwa Steel’s president, has developed a range of support systems to help foreign employees adjust. These initiatives include airport pickups, housing assistance, and rotating employees through different roles to broaden their skill sets. “If we want them to stay longer, we need to support not just the workers but their families as well,” Mr. Nakamura said.

Mr. Trung, who started in the company’s HR department, now works as a deputy manager in the product sales division, demonstrating Daiwa Steel’s commitment to internal mobility. However, despite these efforts, Mr. Nakamura acknowledges the challenges of long-term retention. Many foreign workers still express hesitation about staying in Japan beyond three to five years, often citing the difficulty of finding a sense of belonging in Japan’s tight-knit communities.

“It’s natural for people to want to return to where they feel most at home,” Mr. Nakamura said. “But we are happy to support family visas because if they do decide to settle here, it’s a great sign.”

The Road Ahead: A New Era for Foreign Employment in Japan

As Japan loosens its immigration policies to address labor shortages, the success of businesses like Hizatsuki Confectionery and Daiwa Steel depends heavily on how well they can integrate foreign workers into their operations. Unlike large corporations in major cities, smaller businesses in rural areas have only recently begun hiring from abroad. Their ability to offer fair wages, career development, and family support will play a crucial role in whether these workers stay for the long term.

Despite government efforts to create pathways for permanent residency, challenges remain. Many businesses still view foreign labor as temporary, a mindset that could hinder progress. However, examples like Mr. Trung’s family offer hope. His children are adjusting well—his son plays on the school soccer team, and his daughter has taken a part-time job. While the family enjoys life in Japan, they still miss aspects of home, underscoring the emotional complexity of migration.

For companies across Japan, the future depends on their ability to not only hire but also retain foreign talent. As Japan’s workforce becomes more diverse, businesses must shift their mindset from treating foreign workers as short-term solutions to valuing them as integral parts of their long-term strategy.

By embracing this change, businesses like Hizatsuki Confectionery and Daiwa Steel are not just surviving—they are pioneering a new model of growth that other companies in Japan may soon follow.