TOKYO -- As bonuses at companies in Japan get larger on average for young workers, they are shrinking for middle-aged and older workers, according to a survey by job change service Doda. Why are these two trends going different ways, and what is an expert at the service warning of?

The survey looked at bonuses paid during a one-year period starting September 2023. The annual average was 1.067 million yen (roughly $6,900), a very slight decrease of 4,000 yen (about $26) from the year prior.

However, differences became notable when looking at them broken down by age group. Workers in their 20s received 748,000 yen (around $4,850) on average, an increase from the previous year of 39,000 yen (some $255). Those in their 30s saw a 10,000-yen (roughly $65) raise in their bonuses to an average of 1.003 million yen. This showed conspicuous growth in bonuses for the relatively young.

In contrast, bonuses for workers in their 40s fell by around 11,000 yen to 1.109 million yen on average. Those in their 50s saw a more drastic average drop of 56,000 yen ($360 or so) from their bonuses to an average of 1.239 million yen (approx. $8,030), showing a trend toward decreased bonuses for those of middle age to advanced years.

When asked how they will use their bonus, with multiple answers permitted, the top response was "travel or leisure" selected by 37.8%, followed by "paying off living expenses" at 31.6% and "hobbies and entertainment" at 28.3%. This showed a small drop for leisure and travel compared to last year's survey, while paying off household debts and spending on "financial products (investing and asset management)" jumped up to 16.8%. Some 40% also said they would save at least half of the bonus, showing a tendency to use the cash for making ends meet or being prepared.

Looking at the payment status of bonuses by age group, it is evident that many businesses are prioritizing young workers with the goal of securing talent.

Doda lead editor Takafumi Sakurai, who carried out the survey, is sounding the alarm over the trend to look down upon middle-aged and older adults. This is because a drop in their motivation could have negative impacts on training or instructing younger workers. There's also an increase in job transfers among those in their 40s and up, which he says carries a risk of losing knowhow and personal connections. Sakurai advised that to create strong businesses, it is important to properly appraise and reward veteran workers, too.

Doda is run by Tokyo-based Persol Career Co. The online survey was conducted in August, and received answers from 15,000 working people in their 20s to 50s.

(Japanese original by Yuko Shimada, Business News Department)