Foreign firms slowly influence job-for-life market


As foreign companies have increased their presence in Japan in recent years, many have found it difficult to hire quality local staff.

While the language barrier is often blamed, the relatively inflexible labor market is also seen as responsible. But the situation seems to be gradually improving.

More Japanese workers are changing jobs and many are beginning to understand Western methods of business management. And foreign employers are increasingly eager to meet the expectations of potential recruits. Foreign firms want local staff for cultural, political and economic reasons. As the economy is becoming more globalized, they also prefer to employ Japanese executives who understand both domestic and foreign business practices.

Hundreds of thousands of Japanese are employed at foreign firms here. According to a poll conducted last September by the then Ministry of International Trade and Industry, 1,978 foreign organizations — 56 percent of those surveyed — employed 315,861 Japanese, a record number since the ministry began the annual survey in 1967.

The survey does not include finance, insurance and real estate companies, and responses were not mandatory. Nevertheless, a ministry official said the trend is evident.

But finding the right recruits isn’t easy. The survey shows that 44 percent of the respondents have difficulty hiring competent midcareer staff who can immediately contribute to the firm.

Another survey released in May by the American Chamber of Commerce in Japan confirms this problem.

“Hiring and retaining quality staff on a local basis” was listed as the biggest challenge, with 54 percent of 121 ACCJ members citing it in the multiple-choice questionnaire. Several factors have made hiring quality people difficult.

English remains a major hurdle, though proficiency in the language alone no longer guarantees a position in foreign corporations.

Hugh Everard, managing director of Michael Page International K.K., the Japanese branch of a British executive recruitment consultancy that began operating here in May, said his job is much more difficult than in other Asian markets he has experienced, including Hong Kong and Singapore.

“Lack of midcareer people with relevant English efficiency, in addition to overseas education, business experience in the field, or background in a global organization with Western management practice, inevitably makes the potential pool of candidates a small one,” he said.

Some observers cite the lack of “skill sets” as another cause of the shortage of midcareer candidates.

Sakie Fukushima, Tokyo head of U.S. executive research firm Korn/Ferry International, said the problem derives from the absence of career mobility in the Japanese labor market.

“I believe the number of qualified people is the same anywhere, but those in Japan often lack skill sets because they work for only one organization,” she said.

Immobility can prevent workers from developing skill sets, which increases their marketability, she added.

Tatsuya Tamura, chairman of A.T. Kearney K.K., the Japanese unit of a U.S. management consultancy, said there is a shortage of people capable of contributing “from day one” in the foreign business environment.

He said the Japanese economy’s isolation in the global market enabled it to grow, and employees of local organizations were taken care of if they served their firms until retirement.

Tamura, 62, a former director of the Bank of Japan, admitted that when he was younger, he always wanted to leave the central bank but hesitated for fear of being unable to find a new job. Changing jobs at 58 was quite a challenge.

“It was hard for me in the beginning to adjust to the foreign management practice and the world of English,” he said.

The low social recognition of consulting firms several years ago also made it harder.

“But once you experience switching jobs and find the experience worthwhile,” he said, “it feels like a game and it’s exciting.”

Tamura believes most Japanese salaried workers think they are safe as long as they stick to a company.

However, a change in the labor market is gradually occurring, especially among younger workers.

The Japan Institution of Workers Evolution conducted a survey in October that shows 50.9 percent of male and 36.8 percent of female respondents who graduated from four-year colleges in March 2000 are willing to switch jobs if they find organizations where they can use their skills.

According to Ritsuko Onodera, spokeswoman for Accenture Corp., a unit of a U.S. consultancy, most graduates who join the firm are ambitious enough to learn the business and acquire skills that will become the base for their future success.

“In the past, college students generally expected stability through working for a big-name company and lifetime employment,” she said. “But the people who chose to work for us are more focused on being able to become full-fledged workers in a short period.”

Some young Japanese are setting an example in successfully changing jobs or careers through foreign firms.

Toru Ishikawa, 35, a Nissan Motor Co. employee since May, said motivation for pursuing his career is based on his ultimate goal — to become an agent for young racing drivers.

Ishikawa has worked with an American oil firm and a public relations firm with clients in the auto industry. Between jobs, he obtained his master of business administration from the University of Wales and master of science in public relations from the University of Stirling.

He said the job changes have brought him closer to his goal.

“My parents were upset to hear that I was changing jobs again,” he said, adding that his father was an “average Japanese businessman” who spent his entire career at one firm. Hisataka Furukawa, 28, entered a subsidiary of a U.S. consulting firm nearly three years ago, after working for 18 months with a Kyushu-based distribution company.

Furukawa said his business skills and mind-set have improved through the career change.

“With my previous job at the Japanese company, I just had to follow orders from my boss,” he said. “But with my current job, I have to speak up and clarify my ideas and thoughts to proceed with a project. It’s a challenging atmosphere.”

With the ambition to do business in China, Furukawa said he may consider switching companies to keep brushing up his skills.

Fukushima of Korn/Ferry International said that during her 10 years at the executive search firm, an increasing number of executive candidates that she has approached have begun to show interest.

“Especially over the past five years, I think that a sense of emergency has developed among Japanese businesspeople,” she said. “As major firms collapse, restructure and slash jobs, more Japanese have finally recognized that it could happen to them anytime.”

Foreign employers, for their part, have started to understand the unique situation of the Japanese market.

More of Fukushima’s clients are becoming aware that their approach to hiring people in their home countries does not necessarily work here, she said.

“Some clients still have to understand that their ‘everybody wants to work for me’ attitude will not work with some Japanese candidates who are uncertain whether they want to change their job,” Fukushima said.

She added that foreign employers should act like an equal partner to make potential recruits more at ease.

According to Mitsuaki Watanabe, vice chairman of the American Chamber of Commerce in Japan’s Human Resource Management Committee, American employers are trying to meet local workers’ expectations.

“More firms are realizing that they need to put more effort on training, compensating, developing and retaining the staff,” he said, summarizing the latest ACCJ report.

Watanabe, also president of career consulting firm Axiom Co., likewise highlighted the change on the side of job applicants.

More Japanese, especially the young, are recognizing the U.S. management system in which workers are paid according to performance, he said.

Coupled with the growing willingness to switch jobs, the change has enabled U.S. firms to secure more capable young recruits than before.