Proposed Casinos in Japan Face Worker Shortages Given Low Unemployment, Limited Staffing Options

Posted on: May 21, 2019, 05:49h. 

Last updated on: May 21, 2019, 05:55h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

Global casino companies — now vying for one of three coveted Japanese gaming licenses — may have to find creative ways to staff the venue with the current 2.5 percent national unemployment rate.

Attracting the local workforce could be especially difficult given that many routine casino or hotel jobs tend to be lower paying. There are no signs big gaming companies will want to up salaries to a higher range to lure the workers.

Many Jobs Need to Be Filled

A single new integrated resort (IR) — which features gaming floors, convention space, hotels, restaurants and entertainment venues — could require tens of thousands of employees, estimates Toru Mihara, who teaches at Osaka University of Commerce.

On Sunday, Morgan Stanley released a report on Japan’s gaming industry and the supply of workers. It noted, “Very low unemployment at only 2.5 percent, with skilled labor shortage [is] a major concern for IRs,” according to GGRAsia.

The nation’s unemployment rate is predicted to increase only slightly by the end of this year. Capital Economics said it could edge up to 2.7 percent.

On Friday, Chris Gordon, president of Wynn Resorts Development, told an audience in Japan his company — if it gets one of the licenses — expects to hire “between 11,000 and 16,000 new employees,” according to the Financial Times. He called filling the positions a “daunting task in an economy that has very low unemployment.”

There are some options. Casinos could automate many of the more repetitive functions by using robots.

Also, Morgan Stanley speculated there could be an increase in the number of women in the workforce who now are choosing not to work. If neither of these options succeed, foreign workers could relocate to Japan.

Last December, the government approved a plan to recruit over 345,000 foreigner to move to Japan over the next five years. They would will blue-collar positions.

Gaming operators could try to run job fairs in foreign locations, too. Or, they could use far-reaching employment referral networks.

Companies could try to hire unskilled workers. They would then train them for the new position.

Even if casinos can find the employees, it could be challenging, to retain them, especially after they get experience. Competing venues would try to lure them away.

As of March, businesses in Japan were already finding it difficult to fill positions in different sectors. These include many areas, such as convenience stores, trucking, construction and restaurants, based on recent news reports.

Despite the labor challenges, top gaming companies are aggressively going after the licenses. Some operators pledge to spend over $10 billion on an integrated casino.

For instance, if Melco Resorts & Entertainment were able to capture a license, CEO and Chairman Lawrence Ho says his company would be willing to relocate his headquarters there, GGRAsia reported. The predicted revenue totals are the key reason.

Eventually, Japan’s annual gaming revenue could reach $15 billion, Morgan Stanley said. That would make it “more than double Singapore or Las Vegas,” the firm adds.

Japan is not the only nation facing worker shortages and the potential of filling some roles with automated technology. Parts of the US are seeing similar trends.

A recent Institute for Spatial Economic Analysis study ranked Nevada’s Las Vegas-Henderson-Paradise region the highest of all US areas on the number of jobs that could be automated. Some 65.2 percent of Las Vegas’ jobs could be replaced by technology in two decades, adds a study from the University of Redlands.

Currently, at its Las Vegas venues, MGM Resorts is considering replacing back of house bartenders — who interact with servers but not directly with customers — with beverage stations that automatically pour and mix drinks. Also, cocktail waitstaff could be replaced with technology that allows patrons to pay at the table instead of going to a cashier.

Under MGM Resorts’ 2020 Plan, the gaming giant wants to cut 2,100 positions over the next 12 months.?US unions and workers at casinos are carefully watching the potential for job cuts from automation, and some recent labor agreements have specific language to protect jobs from technology.

Robot Tested at Seattle Hotel

To get an idea of what may represent the future of hotels, a robot is now being tested at Seattle’s Embassy Suites by Hilton. Eventually, it could be used to deliver room-service meals or linens, according to the Seattle Times.

Automation in hotels additionally may be used for guest check-in. Or, robots can be programmed to bring guests’ luggage to rooms.