Fancl Corp. has announced that about 1,000 contract employees working at its directly managed stores nationwide will become permanent staff in April.
The cosmetics industry has seen an increase in customers, partly because of the growth in foreign tourists in Japan. This has heightened the feeling that there are not enough beauty consultants and factory workers. Many companies are now giving employees permanent positions, aiming to improve customer service and maintain production levels.
Currently, 65 percent of Fancl's customer-service workforce is made up of employees whose contracts are renewed on a yearly basis. Starting in April, the firm plans to eliminate the category of contract employee for staff at its directly managed stores nationwide.
It intends to create a new category called "region-specific permanent employee" who, in principle, would not need to move for work, and make all the contract employees permanent staff.
The positions are to be given to 971 employees at the company's about 200 domestic stores that sell cosmetics and health products. Average bonuses would increase from the equivalent of 1.9 months of salary per year to 2.7 months of salary.
A Fancl spokesperson said that by giving these employees permanent positions, "We want to create stable working environments to ensure we have excellent personnel. Limiting employment to a specific region will help people balance family and work."
Factories, too
Over the last few years, making contract workers permanent employees has been a trend in the cosmetics industry. One main goal of this is to secure excellent staff to help increase sales.
In October last year, Chifure Corp. turned about 400 contract workers -- including beauty consultants, sales staff who tour drugstores and other shops, and factory workers -- into region-specific permanent employees.
Shiseido Co. started hiring permanent beauty consultants in fiscal 2016 for the first time in 11 years. It also plans to promote contract workers at three domestic factories to permanent positions in stages.
In October 2014, Kose Corp. gave about 1,200 beauty consultants permanent positions. It has since gradually increased its promotions to permanent positions, raising its ratio of permanent staff from about 50 percent to about 90 percent.
Record highs
The cosmetics industry struggled with sluggish sales after the 2008 global financial crisis triggered by the collapse of U.S. investment bank Lehman Brothers. Things started turning around in 2012 when relaxed visa requirements, a cheaper yen and other factors led to a rapid increase in tourists from China and other countries.
Domestic shipments of cosmetics in 2016 hit a record high of about 1.53 trillion yen, the first new peak in 19 years, according to statistics from the Economy, Trade and Industry Ministry.
The effects of worker shortages due to population decline and the economic recovery have been considerable.
"If we offer contract positions, people won't choose us as a place to work," a representative of a major cosmetics company said.
This sense of urgency is expected to prolong the trend of giving employees permanent positions.
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