After working for a company for a certain amount of time, an employee will naturally start to wonder when they might receive a salary increase. When working for a Japanese company in Japan, the answer is not necessarily a straightforward one.
The first thing to consider is the type of employment arrangement that you have. If you are a seishain (permanent employee), your compensation will be governed by the structure that applies to all other seishain employees. You will be slotted into a specific level in the pay structure based on your seniority, and any salary increases or bonuses will be based on what is negotiated by the company union, and they are not likely to be large. (In recent years, some Japanese companies have added performance-based compensation elements into the mix, but it’s typically not a large percentage of total compensation.)
On the other hand, if you are on an annual contract, there may or may not be some leeway to negotiate a pay increase when your contract is ready to be renewed for the upcoming year. Whether this is possible will depend a lot on your company’s policies, how much budget there is, and the extent to which you have made yourself valuable to the firm’s operations.
Some things to keep in mind
If you are going to try for an increase, keep in mind your company’s budget cycle. For companies that operate on an April 1 start, budgets will usually be set by late February, and there won’t be any flexibility to add new costs until the following fiscal year. So to have a chance, it’s best to bring up your suggestion in January or earlier with an aim toward having the change take effect in April.
Another key difference between salary negotiations in Japan and many other countries is that the role of your direct supervisor is different. In other countries, one’s direct supervisor is usually the person who has the authority to make decisions about compensation. For some contract employees in Japan this may be the case, but often it’s the human resources department that coordinates compensation in the company overall, and they won’t necessarily be up for negotiating.
If you do ask for a raise, be aware that doing so in itself will be perceived as different from what a Japanese employee would do. Typically, the Japanese don’t like to ask for raises, as it sets them apart from the overall system. They believe it’s futile and will only make them appear self-centered and greedy. They also operate under the assumption that the company will compensate them appropriately in the long run even without their demanding it, and therefore have the tendency to value long-term job stability over more immediate rewards.
As one Japanese HR manager puts it: “We can retain Japanese talents without extra cash or stock option, but with warming messages to let them feel that their future is bright, right? So, many Japanese tend to be very patient with salary increases.” And since there is very little labor mobility between companies, Japanese are not typically in the mode of thinking, “If I change jobs I could potentially make a lot more money.” Rather than looking outward to what they could be making elsewhere, many Japanese tend to concentrate on building a successful career within their current employer.
Thus, there is a large contrast between non-Japanese who have the temerity to ask for a salary increase and Japanese who seldom do so. When I conduct cross-cultural seminars for Japanese participants, and ask them what they find challenging about working with non-Japanese employees, the tendency to ask directly for salary increases often comes up. Many Japanese perceive non-Japanese who want to negotiate salary as being like American baseball players who are always asking for a better deal. The recent controversy over former Nissan CEO Carlos Ghosn’s behavior has only served to reinforce the idea that non-Japanese are greedy when it comes to financial compensation. Asking for more money is still viewed in Japanese society as being rather unseemly.
Japanese managers typically don’t have a lot of experience dealing with salary increase requests, and don’t feel comfortable debating, so can feel uncomfortable when an employee comes to them aggressively making a case for why they think they should be getting more money. Indeed, I have had many Japanese managers tell me that they are reluctant to give positive feedback to non-Japanese subordinates, because they worry that every word of praise they utter will later be brought up as a reason justifying why the employee thinks they deserve an increase.
Asking around to a variety of non-Japanese who work in Japanese companies, I heard varying reports as to the success of salary negotiations. Some reported that as a contract worker, the amount of their compensation under their contract was fixed and there was no flexibility to change it and no structure for accommodating any annual increase. Many reported that the only way to get more money would be to quit and get a job at another firm.
On the other hand, others reported success in obtaining a salary increase. Being calm and factual without bombarding them with data seems to be helpful, as well as waiting a reasonable amount of time (two years or more) before broaching the subject. A change in job responsibilities or a change in family situation also can present a graceful opportunity to bring up the subject. Some, particularly in smaller firms, reported that excellent performance was recognized and rewarded.
So, my recommendation is to find out what both the structure and culture around salary increases are in your firm, and take care in how you bring up the subject realizing that such requests are not something that your manager or company are necessarily used to dealing with.
A ‘spring offensive’
Rather than asking for pay raises individually, the Japanese do so collectively through their employee unions.
These negotiations happen for all firms each spring, in what is called shunto, literally the “spring offensive.” Although the shunto has resulted in wage increases six years in a row, the 2019 increase was smaller than 2018’s amid economic worries.
Rochelle Kopp is a management consultant working with Japanese firms operating globally and foreign firms operating in Japan. She recently published “Manga de Wakaru Gaikokujin to no Hatarakikata” (“Learn How to Work With Non-Japanese Through Manga.”) You can find her on Twitter at: @JapanIntercult.