The Japanese government is likely to place similar restrictions on the employment of labor in Japan’s IRs as Macau, placing added pressure on operators to fill their employee quota with qualified people, according to Macau-based IR consultant Niall Murray.
Speaking at a French Macau Chamber of Commerce (FMCC) breakfast event on Wednesday titled “Japan – The Land of the Rising Integrated Resorts”, Murray warned that many challenges still awaited the burgeoning Japan IR industry, with labor set to become a key issue.
“The Japanese, I presume, will follow the Macau policy and say that Japanese employees will get preference,” said Murray, who was part of the pre-opening team for both Sands Macao and The Venetian Macao among multiple other Macau properties.
“When we opened here in 2004, we committed to 87% of our employees being local and we saved the best jobs for them.”
Murray said he expects Japan to “follow the best practices that have been employed elsewhere, which means we believe they will follow Singapore and Macau, giving locals first preference. They’ll get the higher paying jobs.
“That will leave a big gap for the cleaners, the maintenance people, the lower level jobs that are not as highly paid. That’s where we believe some laws will have to be introduced to ensure that those people can come into the country and work and make these places successful.”
Noting that Macau’s incredibly low unemployment rate of 1.7% remains an ongoing challenge for the SAR’s operators, Murray stressed that HR loomed as one of the great unknowns yet to be addressed by the Japanese government’s IR policies.
“There’s going to be a lot of HR requirements for these resorts,” he said. “It’s going to be a big challenge. There are a lot of lessons to be learned from a what worked and what didn’t in Macau.
“We’re still having challenges here, so they need to build practicle solutions into the law early on to ease the process.”
Springfield ghost haunts Japan IRs
While addressing the labor issue in Japan during Wednesday’s FMCC breakfast, Murray expressed genuine fear that the Japanese government may inadvertently create a copy of MGM Springfield in Massachusetts, USA, noting how overly strict policy has dragged down the ability of the IR to remain profitable.
“The taxes are incredibly high and all the things they have to do in the community are making it very difficult to find any meat left on the bone, so there is a danger that Japan may follow through with their promise of being the strictest jurisdiction in the world,” he said.
“They’re already putting huge demands on operators and developers when it comes to winning an IR license.”