The aging population also has clear implications for corporate human resource practice. With an aging workforce, the permanent employment and seniority system burdens firms with rising numbers of higher-paid and less productive workers. Previously, these systems were more suitable to employers, since the steep seniority escalator resulted in less payment for the relatively young workforce and the permanent employment norm reduced the uncertainties and costs of high staff turnover. Finally, the transition to a service economy combined with socio-cultural and socio-economic changes has had a profound effect on Japan's employment institutions. Although leading-edge manufacturers are still competitive, their