Japanese corporations are rushing to scrap the strict grooming rules that have been in place for decades. Instead of the unwritten rule of black hair and neat appearance that symbolized the uniformity and collectivism unique to Japanese society, the mood now allows even flashy dyed hair, long nails, and tattoos that were once strictly prohibited. Since the working-age population peaked in 1995, Japan has suffered from chronic labor shortages, and to secure employees it is breaking taboos that have stood for decades.
The change is most pronounced in retail and services that deal directly with consumers. Reuters said on the 17th that about 25% of employees at Japanese discount chain Don Quijote had dyed their hair bright colors such as pink and gold. Including brown hair, 55% of all Don Quijote employees have hair that is not black. Don Quijote relaxed its rules on hair color and nails three years ago. Since then, there has been a trend of young job seekers who prefer bright hair colors flocking to the company.
Reuters quoted an employee who moved from working at a convenience store to Don Quijote as saying, "Convenience store chains allow only black or dark brown hair for employees, causing a lot of stress," and "More employees cite 'free hair color' as a reason for working part-time at Don Quijote."
Drugstore chain Fujiyakuhin has deleted most grooming rules for employees who are not pharmacists. Employees at the company can have any hair color, and they can also have nail art or flashy makeup. Unlike in the past when only wedding rings were allowed, all kinds of rings are now permitted. Tokyu Store supermarket has also relaxed restrictions on hair color, hairstyles, accessories, nails, and piercings. The company's parent, Tokyu Group (Tokyu Corporation), is considered one of the more conservative corporations in Japan.
Some places are even allowing tattoos, which in the past were absolutely unacceptable because they were associated with the yakuza. According to the Asahi Shimbun, some food and beverage franchises, such as major izakaya chains with a high share of young workers, have begun allowing employees to show tattoos as long as they do not give an intimidating impression.
These drastic changes reflect the reality of Japan's labor market. The unemployment rate for June 2025 released by Japan's Ministry of Internal Affairs and Communications was 2.5%. Japan has already kept its unemployment rate below 3% for nearly four years. In economics, this is considered "full employment," meaning that virtually everyone willing to work has found a job. Investors typically interpret a falling unemployment rate as a positive signal for the economy. They expect stable employment to support consumer expenditure.
But the reality is different. If the unemployment rate is too low, corporations struggle to secure workers. Rising labor costs combined with labor shortages may also dampen new hiring and investment expansion. As of December last year, Japan's average effective job openings-to-applicants ratio was 1.25. That means there are only 100 people willing to work for 125 jobs. The labor shortage felt on the ground by corporations is more serious than the statistics suggest. According to a survey conducted this year by Japanese credit research firm Teikoku Databank, more than 50% of Japanese corporations said they are short of regular employees. In particular, 60.9% in the retail industry like Don Quijote and 75.5% in the food service industry, which even allows tattoos, said they are short of non-regular employees. The nursing and care sector is also facing a severe labor shortage, with an effective job openings-to-applicants ratio of 2.37.
So far, the labor shortfall in Japan has been filled by foreign workers. According to the Ministry of Health, Labor and Welfare, as of October last year, the number of foreign workers in Japan hit a record high of 2.3 million, up 12.4% from a year earlier. The number of business sites that employed even one foreign worker also reached about 342,000, up 7.3% from the previous year, setting a record high. About 80% of the 342,000 establishments that hired foreign nationals were small and midsize companies with fewer than 100 employees. In an earlier Tokyo Chamber of Commerce and Industry survey, more than 60% of small and midsize companies also complained of labor shortages.
The problem is that even more workers will be needed going forward. The Japan International Cooperation Agency (JICA) estimates that to meet its current growth targets, Japan will need 6.88 million foreign workers by 2040. From the current 2.3 million, the number would have to nearly triple in 15 years.
But the record weak yen is undermining the appeal of working in Japan. In the days when $1 hovered around 110 yen, earning 300,000 yen a month was worth about $2,700. But now that $1 is above 150 yen, the value plunges to $2,000. Even for the same work, the real dollar value in hand drops sharply.
Akimoto Shungo, an economist at Mizuho Securities, told the Japan Times, "It is true that the weak yen has made Japan less attractive as a place for foreign workers to earn money." Measures such as allowing dyed hair are strategies not only to hire new workers but also to prevent existing employees and foreign workers from leaving.