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This article highlights the major issues faced by the Japanese workforce in the after-math of economic slowdown in the last decade of 20th century. Collapse of Japan’s economic bubble in 1990s was taken as ‘lost decade’ having wider implications on labor market in Japan. With continued economic hardship in running century, the employment sector in Japan is going through major changes, moving away from the framework of traditional employment to non-traditional employment. This shift includes the erosion of the life time employment system, lowered retirement ages, the hiring of disabled employees and encouragement of more women in the workforce.