“Hiring has become more difficult than it used to be.”
We’re hearing this more and more, regardless of industry.
What’s happening in the 2026 hiring market is not simply a matter of a talent shortage.
In particular, demand is increasingly concentrated around professionals who can lead areas such as digital transformation, AI adoption, and business transformation.
The challenge, then, is not simply a shortage of candidates, but a growing imbalance between the skills companies need and the talent available in the market.
This means employers are competing on more than compensation alone. The speed of the hiring process, flexibility and working environment, career development opportunities, and the overall employee experience are all becoming increasingly important factors in a candidate’s decision.
Salary Increases Are No Longer Just a Short-Term Trend
Japanese companies have continued to raise wages over the past several years. In 2026, major companies are once again implementing significant salary increases, and compensation levels in the job market are continuing to rise. From an employer’s perspective, this means it is becoming increasingly difficult to determine hiring conditions based solely on internal salary benchmarks.
For example, imagine that the salary for a certain position is ¥7 million within your company, and you therefore set ¥7 million as the maximum salary for a mid-career hire. That alone may put you at risk of losing candidates to competing offers from other companies.
Of course, maintaining fairness with existing employees is also important. At the same time, companies increasingly need to regularly review their salary and evaluation systems in light of current market conditions.
To remain competitive in hiring, it is essential to consider both internal salary benchmarks and external market rates.
In the Age of AI, the Skills Companies Value Are Changing
Another major shift is the rapid adoption of generative AI. AI can now support many tasks that previously required significant human time, including writing, creating presentations and other materials, coding, and organizing data. As a result, the qualities companies look for in talent are also changing.
Going forward, what matters is not simply the ability to use AI effectively. It is the ability to:
Decide what should be done.
Make sound judgments in complex situations.
Bring people together and build relationships based on trust.
The value of these distinctly human capabilities is increasing.
In sales, for example, it is no longer enough simply to create a strong proposal. The ability to identify the client’s underlying challenges is becoming more important.
For engineers, the value is shifting from simply being able to write code toward the ability to use AI while designing the product as a whole.
For managers, it is no longer enough simply to organize information. They need to set the direction of the team and motivate people to move toward it.
AI is not so much “taking people’s jobs” as it is changing the work people are expected to do—and the skills they need to do it.
So, What Should Companies Change?
As the hiring market evolves, not every company can offer exceptionally high compensation. That makes it even more important to reconsider hiring criteria beyond salary. There are three areas in particular that companies should review:
- Speed up the hiring process
- Be as transparent as possible about compensation, evaluation, and ways of working
- Invest not only in hiring new talent, but also in developing existing employees
1. Speed Up the Hiring Process
Strong candidates are often being approached by multiple companies. If several days pass between an application or interview and the next communication, another company’s hiring process may move ahead in the meantime.
The principle is simple:
When you find a strong candidate, contact them as quickly as possible.
In today’s market, this can make a significant difference.
2. Be as Transparent as Possible About Compensation, Evaluation, and Ways of Working
Candidates want to know more than just the salary.
They want to understand:
- How will I be evaluated after joining?
- What kind of career path can I build here?
- What kind of environment will I have for using the latest tools, including AI?
Being open about these areas makes it much easier for candidates to picture what their future with the company could look like.
3. Invest in Existing Employees, Not Just New Hires
It is not realistic to recruit every person with the skills your company needs from outside the organization.
Creating opportunities for existing employees to develop skills in areas such as AI, digital transformation, and generative AI will therefore become an increasingly important part of talent strategy.
Rather than treating recruitment and employee development as separate activities, companies need to consider how to develop the talent they need across the organization as a whole.
Conclusion
From a Company That “Chooses Talent” to a Company That Is “Chosen by Talent”
In the 2026 hiring market, companies are no longer the only ones doing the choosing. Candidates are also evaluating companies by asking:
“Is there value in working for this company?”
“Will I be able to grow here?”
“Will working here increase my value in the job market?”
Salary, hiring speed, the working environment, AI adoption, and transparency around career development all contribute to a company’s ability to attract talent. Rather than viewing people simply as a cost, companies should think of talent as capital that enables the business to grow. The companies that take this approach are likely to become increasingly attractive in the talent market. As the hiring market changes, hiring practices need to change with it.
Reviewing whether your salary levels, hiring process, and job requirements are aligned with today’s market may reveal opportunities to make meaningful improvements.