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With the accelerating advancement of digital technologies such as big data utilization, AI, and IoT, the shortage of IT engineers in Japan is becoming increasingly severe.
"We want to solve our company's IT engineer shortage."
"We want to understand the root causes of the IT engineer shortage."
Many executives and technical department personnel may be thinking this way.
This article provides a detailed explanation of the IT engineer shortage in Japan. We will discuss its specific causes and countermeasures, as well as introduce case studies of companies that successfully addressed this issue.
Akira Shimazoe
CEO of Solashi Japan LLC. Engaged in the development and operation of internal systems at Suntory. Founded Yper Inc., serving as CTO and CPO, contributing to product launch and growth.
The Reality of the IT Engineer Shortage in Japan
This section explains the reality of Japan’s IT engineer shortage. The lack of IT engineers is a major issue across various industries and sectors.
However, do you know the exact scale of the shortage or what specific skills are in demand?
To understand the current situation accurately, we will explain the IT engineer shortage based on research findings from the Ministry of Economy, Trade and Industry (METI) and the Information-technology Promotion Agency (IPA).
Up to 790,000 IT Engineers May Be Lacking by 2030
(Source: Summary Report on the Latest IT Human Resource Trends and Future Projections | METI)
A 2016 study by METI predicted that the number of new entrants into the IT industry peaked in 2019 and has been declining since. Due to the expansion of the IT market, by 2030, Japan may face a shortage of up to 790,000 IT engineers.
This projection is based on a high-growth scenario where IT demand grows at an annual rate of 3% to 9%.
Even in a low-growth scenario (1% annual growth), a shortage of approximately 410,000 engineers is expected. The study also pointed out concerns about the aging IT workforce.
Furthermore, a 2022 IPA study revealed that over 85% of IT companies reported experiencing an IT workforce shortage.
(Reference: Survey on Skill Transformation in the Digital Era (2022) | IPA)
From these two studies, we can observe the following:
- There is a chronic shortage of IT professionals in Japan, coupled with an aging workforce.
- Many companies are currently struggling with IT workforce shortages.
Shortage of Advanced IT and Cybersecurity Professionals
Particularly concerning is the shortage of "advanced IT professionals" and "cybersecurity experts."
(Source: Summary Report on the Latest IT Human Resource Trends and Future Projections | METI)
The Ministry of Economy, Trade, and Industry (METI) predicts that, in 2020, the shortage of advanced IT talent handling cutting-edge technologies such as big data, IoT, and artificial intelligence (AI) will be about 48,000 people.
It was expected that there would be a shortage of about 193,000 information security personnel. These areas are anticipated to see an increase in demand due to the following circumstances:
- As the IT space expands, the methods of cyber attacks are becoming more sophisticated, and the risk of information leakage is increasing
- Advancements in digital technologies such as big data, IoT, and artificial intelligence are progressing rapidly
As of 2023, the shortage of personnel in information security and advanced technology fields is not as noticeable, as shown in the next section.
However, the era of rising security awareness and the promotion of DX, combined with the chronic shortage of IT personnel, still persists. The deepening shortage of talent is expected to continue to be a concern in the future.
Highly In-demand IT Roles: Data Scientists and Business Designers
Roles such as data scientists, business designers, and product managers are particularly prominent as areas experiencing noticeable talent shortages.
(Source: DX White Paper 2023 | Information-Technology Promotion Agency (IPA))
The above diagram shows the survey results from the "DX White Paper 2023" published by the IPA regarding the "quantity" of human resources needed for digital businesses in various roles.
Data scientists (72.3%), business designers (70.1%), and product managers (68.3%) are identified as roles with a strong sense of shortage.
The increasing demand for these roles can be attributed to the following factors:
- In order to differentiate from competitors and drive new product development and customer acquisition, data utilization has become indispensable
- To enhance competitive advantage, companies are seeking managers and designers with business acumen, not just specific technical skills
Government Measures to Address the IT Engineer Shortage
In response to the growing demand for IT, the government is taking steps to address the shortage of IT engineers.
Mandatory and Enhanced Programming Education in Schools
In accordance with the new curriculum guidelines, programming education has been made mandatory and enhanced in the information technology courses of elementary, junior high, and high schools.
| School | Implementation Year | Measures |
| Elementary School | 2020 | ・Make programming education mandatory |
| Junior High School | 2021 | ・Enhance programming and information security content in the technology and home economics (technology field) classes |
| High School Information Science | 2022 (progressing by year) | ・Introduce "Information 1" for all students and the elective "Information 2" ・Strengthen learning on programming, networks, information security, and databases |
These trends reflect the following national considerations:
- Through programming education, we want to foster logical thinking
- We want to quickly train IT professionals to address the predicted shortage of hundreds of thousands of IT professionals
Plan to Train 2.3 Million Digital Professionals
There is a national concept called the "Digital Rural Urban Nation Plan," which aims to resolve challenges faced by rural areas and implement digital solutions that benefit all citizens.
As part of this initiative, the training and securing of digital professionals are emphasized.
With collaboration between relevant ministries, a program has been launched to train 2.3 million digital professionals by the end of fiscal year 2026.
(Source: Digital Talent Development and Securing | Cabinet Secretariat)
Why is there a Shortage of IT Engineers? Four Main Reasons
The main reasons for the shortage of IT engineers are as follows:
- Changes in working styles
- Rapid expansion of IT demand
- Increased difficulty of IT technologies
- Impact of labor conditions within companies
Identifying the root causes is key to resolving the shortage of IT professionals. Let’s explore each one in detail.
Changes in Working Styles
The changing working styles also contribute to the shortage of IT engineers.
According to the Ministry of Internal Affairs and Communications' labor force survey, the average working hours of technicians in the information and communications industry in 2023 have decreased by approximately 8.3% compared to 2013.
This decrease in average working hours is attributed to the implementation of work style reform laws in April 2019 (with some provisions starting in April 2020) aimed at correcting long working hours, as well as the increase in non-regular workers such as contract employees and part-timers.
Additionally, the future decrease in the labor force population and the aging of workers are accelerating the shortage of IT engineers.
(Source: Mitsubishi UFJ Research & Consulting "Current Status of Labor Shortages and Future Outlook")
According to a survey published by Mitsubishi UFJ Research & Consulting in 2023, the labor force population and the number of employed people in Japan are expected to decrease by 500,000 annually.
The same survey points out the aging of the workforce and suggests that it will become more difficult to secure IT engineers in their 20s to 50s, who are in their prime working years.
Rapid Expansion of IT Demand
The promotion of DX, the development of AI technologies, the use of big data, and work style reforms are all factors contributing to the rapid expansion of IT demand.
According to a survey by Yano Economic Research Institute, the domestic private IT market size is projected to reach 15.53 trillion yen in 2025, a 20% growth from 12.89 trillion yen in fiscal year 2019.
From fiscal year 2024 onward, investments in practical DX, such as replacing core systems and servers, are expected to accelerate. Consequently, IT talent shortages are likely to continue.
(Reference: Survey on IT Investment by Domestic Companies (2023) | Yano Economic Research Institute)
Increasing Difficulty of IT Skills
The increasing difficulty of IT technologies is also a factor, as companies are struggling to secure personnel with the required skills and experience.
As mentioned in the previous chapter, there is particular concern about the shortage of "advanced IT personnel." The differences between advanced IT personnel and traditional IT personnel are as follows:
| Type | Definition |
| Traditional IT Personnel | Personnel who can handle contract development, operation, and maintenance of IT systems. Able to use existing tools and program according to requirements. |
| Advanced IT Personnel | Personnel capable of handling cutting-edge technologies like cloud computing, AI, and big data. Positions include AI engineers, cloud engineers, and data scientists. |
Furthermore, the "IT Personnel Global Comparison Survey" conducted by the Ministry of Economy, Trade and Industry in 2016 also highlights the need to improve IT skills.
This survey shows the average skill level of IT personnel in various countries as follows:
| Level 1 | Personnel with basic knowledge required as a minimum |
| Level 2 | Personnel with basic knowledge and skills |
| Level 3 | Personnel with applied knowledge and skills |
| Level 4 | Personnel with advanced knowledge and skills |
| Level 5 | High-end players within the company |
| Level 6 | High-end players within the country |
| Level 7 | High-end players within the country and internationally competitive players |
| Country | Average Level |
| United States | 4.05 |
| India | 3.90 |
| China | 3.58 |
| Indonesia | 3.43 |
| Vietnam | 3.31 |
| Thailand | 3.21 |
| Japan | 3.17 |
| South Korea | 3.14 |
(Reference: IT Personnel Global Comparison Survey Results Report (Ministry of Economy, Trade and Industry) | National Diet Library Internet Resources Preservation Project (WARP), created by our company)
The average IT skill level in the United States exceeds Level 4, while China and India are in the later stages of Level 3. Japan remains in the earlier stages of Level 3, highlighting the need for the development of IT personnel with advanced technical skills.
Impact of Company-Specific Labor Environments
In companies with poor working conditions, there may be a shortage of IT engineer talent.
The following is a summary of the reasons for job changes among engineers, as researched by Agent Grow Co., Ltd., which operates the SES business and SaaS business.
The main reasons for IT engineers considering job changes are "dissatisfaction with salary" and "dissatisfaction with working conditions."
If the working conditions, including salary, are poor, it is understandable that IT engineers will leave for another job. If the labor shortage caused by job changes worsens working conditions further, it may lead to a vicious cycle where it becomes even harder to attract talent.
Five Measures to Solve the IT Engineer Shortage
Here are five proposed measures to address the IT engineer shortage.
- Utilization of offshore development
- Review of internal engineer treatment
- Implementation of planned IT engineer development
- Creation of a safe working environment
- Strengthening recruitment capabilities
Utilization of Offshore Development
Offshore development involves outsourcing some or all of system, software, and application development to overseas development companies.
By outsourcing to offshore development companies in countries or regions with low labor costs and a large number of IT engineers, it is possible to solve the talent shortage and reduce costs.
However, it is important to keep in mind that communication barriers may arise due to language and cultural differences.
To prevent misunderstandings, regular meetings and the establishment of communication methods are necessary measures to take.
Related article: What is offshore development? Basic knowledge, benefits, and measures to avoid failure
Review of Internal IT Engineer Treatment
As many companies seek IT engineers, the recruitment barriers have become higher.
Finding new employees will not be easy. Therefore, it is important to implement measures to prevent the outflow of IT engineers already in the company. Specifically, improving salaries and enriching welfare benefits are key actions.
IT engineers often have a difficult time being assessed for their work by HR staff. It's important to evaluate whether their working hours, work content, and skills are aligned with their salary.
Improving welfare benefits can be effective in encouraging IT engineers to stay with the company for longer. Since IT engineers often have irregular working hours, it may be a good idea to consider implementing a flexible working system.
Implementation of Planned IT Engineer Development
To prepare for future IT engineer shortages, more companies are hiring new graduates and young people for potential hiring and planning their development.
By developing talent that matches the company environment and philosophy, companies can expect a decrease in turnover.
When developing IT engineers, it is important to create a medium- to long-term plan. Clarify the purpose of development and the type of person you need, and create specific training content in line with the career plans of the development targets.
Methods for developing IT engineers include the following.
| Development Method | Overview |
| OJT Training | Practical on-site training. By receiving guidance from seniors or colleagues, engineers can acquire skills useful for actual work. |
| In-house Study Sessions | Employees can learn new technologies and knowledge as an organization. It is also useful as a space for communication between employees. |
| Off-JT | By learning away from regular work, engineers can concentrate on acquiring knowledge. If there are multiple trainees, this method helps ensure consistent education. |
| e-Learning | Since it doesn't require a specific time or place, it encourages self-directed learning. The lack of need for adjusting training venues or schedules lowers the barrier to implementation. |
| External Training Services | By utilizing services provided by training professionals, companies can offer high-quality training. Since the training is managed externally, it reduces the burden on internal staff. |
Creation of a Safe Working Environment
This also ties into the review of treatment, but creating an environment where IT engineers can work safely and promoting retention is crucial.
For example, it is said that IT engineers have more overtime hours compared to other industries. This is attributed to sudden specification changes and subcontracting structures.
In environments with excessive overtime, it may be difficult to maintain an appropriate work-life balance and take personal time.
To reduce commuting and overtime hours, promoting remote work and improving the overall efficiency of IT department operations are effective. Additionally, creating an environment where employees can freely consult with superiors or colleagues and paying attention to mental health care is essential.
Creating a workplace where your IT engineers want to stay long-term will help reduce talent shortages.
Enhancing Recruitment Capabilities
In order to secure talented IT engineers in a competitive talent market, it is essential to strategically strengthen recruitment capabilities.
IT engineers are in a seller's market in the job-changing industry. Rather than being defensive, we recommend an aggressive approach to recruitment, including recruitment branding.
For example, incorporating the following methods would be beneficial:
- Enhance and promote internal systems and welfare benefits
- Clearly detail the tasks to be performed in the job listing
- Share the company atmosphere through social media, etc.
Make sure to focus on creating content that applicants will want to join, and actively approach them.
Offshore Development Success Stories in Solving IT Engineer Shortages
Finally, we will explain two cases where offshore development successfully solved IT engineer shortages.
Here are two examples from our Vietnamese development company, " Solashi Co., Ltd."
Solving Internal Resource Shortage with Offshore Development | Software for Educational Environments
This is an example from Edv Future Co., Ltd., which develops software for educational environments. They provide a growth-support service called "Edv Path" to foster life skills.
They had no full-time engineers in-house, resulting in a shortage of resources. Additionally, the implementation and quality assurance processes were time-consuming, causing development to lag behind expectations.
To solve this issue, we proposed offshore development. By outsourcing specification confirmation, implementation, and quality assurance, the client was able to focus resources on requirements definition and ticket creation.
As a result, the number of tickets leading to releases doubled, and through weekly releases, they were able to implement feature expansions and bug fixes, accelerating delivery.
Making an App That Had Been Abandoned Multiple Times a Reality in Just 3 Months | Short-Term Dispatch Matching Service
This case comes from Trifle Co., Ltd., which operates the short-term dispatch matching service "NEKONOTE."
They had no in-house development resources and few personnel knowledgeable in IT, so they outsourced development tasks. However, despite several outsourcing attempts, the final product was never delivered.
What we did was clarify the service they wanted to develop through IT consulting. We also created a product roadmap and took responsibility for app development and delivery.
As a result, the app, which had been abandoned multiple times, was released just 3 months after development began. We also resolved issues with the admin panel, leading to more efficient app management.
Additionally, the client had not been able to recover investments from previous companies they had hired. To address this, we proposed securing development funds through grants. The proposal was successfully accepted, securing ample development funds.
There are many other cases where we have used our rich development resources to solve engineer shortages. If you are interested, please feel free to contact "Solashi Co., Ltd."
Japanese PMs Handle Communication
Looking for an Offshore Development Company
For such individuals, we recommend Solashi’s Vietnam offshore development
Understanding the Root Causes of IT Engineer Shortages and Implementing Proper Measures
We have explained the current state of IT engineer shortages in Japan and the measures to be taken to solve these issues.
The shortage of IT engineers is a challenge faced by many companies. By identifying the causes of the talent shortage and the required type of engineer, companies can take appropriate actions.
One solution to the IT engineer shortage is offshore development.
"Solashi Co., Ltd" employs Japanese PMs with startup and business launch experience. We also hire highly skilled IT engineers who have graduated from top engineering universities such as Hanoi University of Science and Technology and Vietnam National University.
With smooth communication, we can proceed with development in a well-organized team setup.
For the development of new services, we recommend adopting a lean startup approach. By releasing the minimum viable product, you can reduce time and costs while leading to efficient validation, problem discovery, and resolution.
If you are considering IT engineer shortages, cost reduction, or new service development, please consult "Solashi Co., Ltd."
Akira Shimazoe
Representative of Solashi Japan LLC. Born in April 1989 in Fukuoka Prefecture. Graduated from the Graduate School of Information and Mathematical Sciences at Osaka Prefecture University. Joined Suntory System Technology Co., Ltd., an IT subsidiary of Suntory Holdings, in 2014. Broadly responsible for the development, operation, and implementation of vending machine delivery management, efficiency improvements, and sales management systems. Founded Yper Inc. in 2017, serving as CTO and CPO. Contributed to the launch and growth of the app-linked delivery bag "OKIPPA." Selected for Toyo Keizai's prestigious "Amazing Venture 100" and Forbes' "Forbes 30 Under 30 Asia 2019."
