[Obayashi] Tackling the Labor Shortage — Robotics Construction®

Note: This article is a factual summary based on Obayashi Corporation’s published IR material (Investors’ Guide, June 2026 edition). It is not a recommendation to buy or sell any security. Figures are as of the publication of the source material. Investment decisions are your own responsibility.

Japan’s construction workforce has shrunk by roughly 30% since its FY1997 peak of 6.85 million workers, falling to 4.77 million by FY2024 — and the workers who remain skew considerably older, with 36.7% now aged 55 or older versus just 11.7% aged 29 or younger (see our construction market article for the full industry-wide numbers). Obayashi frames this page of the Investors’ Guide around exactly that backdrop: amid a declining and aging construction worker population, the group describes itself as advancing various initiatives to address two linked social issues facing the industry — worker shortages, and the challenge of passing on technical expertise before experienced workers retire.

The response runs on two tracks: technology, in the form of automating and digitalizing construction under the Robotics Construction® banner, and people, in the form of direct investment in training and retaining skilled workers through Obayashi Rin-yu-kai, the roughly 1,250-company partner-contractor organization introduced in our Value Creation Process article. The rest of this article covers both in turn.

Robotics Construction®: three elements

Obayashi organizes its technology response around three elements that are designed to reinforce one another: mechanizing individual tasks, automating machine operation, and digitalizing the construction process as a whole.

Element	Aim	What it involves
1. Task Mechanization	Efficiency and safety on site	Mechanizes straightforward, physically demanding tasks, improving safety and productivity and freeing workers to focus on tasks requiring advanced skills, construction management, or more creative work
2. Automated Machine Operation	Reducing worker load, passing on expert skill	Remotely operated, automatic, and autonomous operation technology lets operators manage multiple construction sites; data accumulated from skilled operators’ machine operations supports further automated and autonomous operation
3. Construction Process Digitalization	Efficient, high-quality construction	Digital twins that synchronize real-space and cyberspace conditions to manage safety, quality, and productivity across the construction process

The three elements build on each other. Mechanizing individual tasks (1) is what generates the operating data that supports remote and autonomous machine operation (2), and both in turn feed the digital twins used for construction-process-wide management (3). Obayashi frames the overarching goal as freeing human workers from physically demanding, repetitive tasks so they can focus on higher-skill, supervisory, and creative work instead — directly addressing the aging-workforce dynamics described above, where the pool of younger workers available for physically demanding site work has been shrinking fastest.

Training the next generation: the Obayashi Rin-yu-kai Vocational Training School

On the people side, Obayashi jointly established a vocational training school with Obayashi Rin-yu-kai — its roughly 1,250-company partner-contractor organization — specifically to train skilled workers and pass on technical skills to future generations.

• Offers three courses specializing in scaffolding, reinforcing, and form working, as well as a short-term course specializing in CAD.
• The O-DX Room, an in-house facility, uses VR technology for crane slinging operation training and safety simulation training.

Scaffolding, reinforcing, and form working are three of the foundational skilled trades on any building site, and CAD (computer-aided design) skills increasingly bridge on-site work with the digital design and management processes described above. Running the school jointly with Rin-yu-kai matters because most of the tradespeople working on an Obayashi site are, in practice, employed by these partner companies rather than by Obayashi itself — so training capacity built at the school benefits the wider network of roughly 1,250 partner firms, not just Obayashi’s own payroll. The VR-based crane slinging and safety simulation training in the O-DX Room lets trainees practice higher-risk tasks — such as attaching loads to a crane — in a simulated environment before doing so on an active site, which is itself a small-scale illustration of the ‘digitalization’ element described above.

Retaining skilled workers: the Certified System for Excellent Site Supervisors and Excellent Operators

Alongside the training school, Obayashi has introduced a certification and incentive scheme aimed squarely at recruitment and retention of younger skilled workers.

• Introduced to enhance the attractiveness of the construction industry and improve recruitment and retention of younger skilled workers.
• Certified Excellent Site Supervisors and Excellent Operators receive allowances based on the number of days they worked at Obayashi’s construction sites.

Tying the allowance to days worked at Obayashi sites specifically is intended to reward experienced site supervisors and equipment operators directly, rather than through their employer alone — most of the workers on an Obayashi site are employed by Rin-yu-kai partner companies rather than by Obayashi itself, so a certification scheme that follows the individual worker is one way to make careers in the industry more attractive without waiting for the broader labor shortage to ease.

Why this matters for investors

Both tracks respond to the same constraint flagged in our domestic civil engineering and domestic building articles: construction capacity limits under overtime cap regulations, which took effect for the construction industry in Japan in April 2024 after a multi-year grace period. Robotics Construction® works to reduce the amount of labor needed per project and to let existing skilled staff cover more ground — for instance, one remote operator managing equipment across multiple sites. The training school and certification system work the other side of the problem, making skilled trades more attractive to enter and easier to stay in.

Given that domestic construction supplied 74.5% of Obayashi’s FY2025 operating profit from 60.5% of sales (see Company Overview), how effectively Obayashi manages this labor constraint has a direct bearing on its largest profit engine. None of the initiatives on this page come with disclosed cost or return figures in the Investors’ Guide, so investors cannot size their financial impact directly from this document — but the direction is clear: less reliance on physical labor per unit of construction output, and a more structured pipeline for recruiting and keeping the skilled workers Obayashi still needs.

This article is part of our complete breakdown of the Obayashi Investors’ Guide 2026. See the hub article for the full series.

Note: This article is a factual summary based on Obayashi Corporation’s published IR material (Investors’ Guide, June 2026 edition). It is not a recommendation to buy or sell any security. Figures are as of the publication of the source material. Investment decisions are your own responsibility.