Anyone who closely follows the political and economic trends in Japan will be aware of the country’s lingering struggle with inflation and stagnating incomes. In addition, an all time low in the numbers of young people coming through the education system has raised many questions about how Japan can hope to replace its rapidly ageing workforce.
The current crop of Japanese policymakers are attempting to kick-start, or reflate, the economy by encouraging increased corporate profits, higher wages and greater consumer spending. However, this proposed economic cycle is being frustrated by an endemic lack of mobility within the labor force, and which is seen as one of the greatest impediments to reviving the economy. Solving that particular problem will require making changes to Japan’s established corporate culture, but, thankfully, this is leading to increased opportunities for foreign workers in Japan.
Until recently, it has been mainly small and midsize businesses that have turned to hiring foreign staff in order to deal with the increasing labor shortage. It is also the case that many such employers lament a lack of commitment in foreign staff, who may more readily seek or accept better-paid positions with rival companies, or simply quit Japan altogether mid-contract. But one has to remember that the kind of mobility that exists in Western labor markets, has never really featured in Japan’s business culture.
However, with prominent political and economic figures in Japan now citing lack of mobility in the workforce as a major contributor to stagnating wages, a number of forward thinking major corporations have started to review their hiring policies and benefits packages, particularly when it comes to employing foreign staff.
For one thing, managing expansion into foreign markets will be much easier where there is a pool of well-trained staff who understand Japanese and know their companies’ aims and practices, and who can then work locally or natively in their own countries. Then again, there are many new opportunities arising from the current tourism boom in Japan, and foreign staff are expected to play a significant role in this.
But for this kind of workforce diversification to succeed, employers will have to offer the right incentives and benefits. Even then, some potential job candidates may find the country’s employment practices uninviting. So before we take a look at the kind of opportunities that are becoming available, it might be useful to consider the way things have traditionally been done in Japan’s corporate culture, and how that differs from typical Western models.
Mobility and Specialization
In the West, career professionals usually take their first job after university in a field as close to their degree specialization as possible. After that, one tends to hop around from position to position, and from company to company as one climbs the ladder of wealth and success. Not so in Japan.
Educational specialization is immaterial for most people in Japan because it is the employers who determine what new workers (freshmen) will need to know via on-the-job training. Furthermore, the qualitative ranking of universities goes hand-in-glove with the stature of employers. Thus, graduates of the top universities tend to get the better-paid jobs with major trading and manufacturing companies. This fresh intake takes place in April and, as a result, has become the traditional time for hiring, changing jobs and retiring in Japan.
Japanese people who change jobs do not usually do so for financial or career gains; more often it is to escape intolerable conditions or personal problems. Conversely, there are very few Japanese employers dangling a wad of cash to attract skilled staff away from rival companies. Thus, it is this inherent lack of mobility and flexibility that the system’s detractors claim is hampering reform, causing earnings to stagnate, and making mid-career moves almost impossible.
It has always sounded vaguely like a prison sentence to me, but what has traditionally driven the labor market here is the distinctly Japanese ethos of the job-for-life (shūshin koyō), where seniority (nenkōjoretsu), and therefore salary, is determined by length of service. As far as knowledge and performance go, employees are expected to learn every aspect of their company’s business with regular relocation (jinji idō) through its various departments and sections.
Actually, at purely company level, there are some obvious advantages to shūshin koyō if – and it is a big IF – the rewards for such loyalty and commitment are fair and equitable. Quite how a foreign worker might fit into the old system that evolved with a wholly Japanese workforce in mind, is anybody’s guess; but with the changes in benefits packages, training, wages and hiring practices currently being considered or implemented by big companies, a job-for-life may start to seem less implausible for foreign workers.
According to Japan labor ministry figures, close to a million foreign nationals were employed in Japan during 2015 to 2016, and although that figure included casual and part-time work, it still represents a healthy 15% increase over the previous year. Furthermore, in a recent Kyodo News survey of employment trends among major companies from a broad range of industries, almost half expressed the intention of hiring more non-Japanese staff.
Many foreign employees are hired after finishing studies at Japanese universities, while some companies, such as Hitachi, run special employment seminars overseas. Fujitsu, on the other hand, approaches students majoring in science and engineering subjects overseas directly, as well as offering internships to foreign students in Japan. Clearly, then, the habit of hiring new staff straight out of university remains important to Japanese companies; that such recruitment is increasingly aimed at non-Japanese graduates is unprecedented.
Convenience store chain Lawson Inc., which is working at expanding its operations overseas, is a good example of a forward thinking employer, consistently awarding from 10-30% of its ‘freshman’ positions to foreign graduates over the last few years. Similarly, companies such as Hitachi, Fujitsu and JX Nippon Oil & Energy Corp. now say that foreign graduates account for around 10% of their annual intake. And the list of top Japanese companies offering solid career opportunities to graduates, and even mid-career movers, is getting longer every year.
A Final Thought
Diversification in the workforce may be essential to Japan’s future growth and prosperity, but a workforce also needs to be stable and content. Whether or not proposed improvements in working practices and benefits packages will make a career in Japan more appealing to foreign workers in the long term remains to be seen, but at least some forward thinking companies have taken the all-important first step towards change.
By Bill Ambler