The recent moves by up-and-coming companies such as Rakuten Inc. and Fast Retailing Co. to adopt English as their official in-house language by 2012 reveal their resolve to compete globally to survive.

Rakuten President Hiroshi Mikitani’s call for executives who can’t speak English by 2012 to leave the online shopping mall operator has caused ripples among Japanese businesspeople who struggle to master the language. But company officials say the decision was one “of necessity.”

At its headquarters in Shinagawa Ward, Tokyo, where name tags of employees, floor directories in elevators, menus in its cafeteria and even the labels on recycling trash cans are all in English, Rakuten officials said the language will be “essential” as the firm expands into 27 countries and regions.

“In the future at our company, it is highly likely that those who sit next to you can’t speak Japanese,” said Naoki Mizushima, a Rakuten public relations official. “Adopting English as the official in-house language will be a small step to achieving our goal of becoming the No. 1 Internet service company in the world.”

Even though foreigners still account for only about 10 percent of the workforce at Rakuten, which has some 6,000 group employees, the percentage is expected to grow as the company boosts foreign recruitment, especially from China and India.

The company has recently acquired French e-commerce site operator PriceMinister S.A. and American counterpart Buy.com Inc., and foresees a jump in the overseas ratio in its total transaction volume from the current 1 percent to 70 percent in its international business strategy.

Mizushima said the goal of making English the common language is also aimed at drawing top talent from overseas and not alienating them, so they can recognize chances for promotion and stay longer with the firm.

The strategy will also be beneficial to Japanese staff because it will improve their skills as individuals, even if they leave Rakuten, he added.

Already, some in-house meetings have been conducted in English, and to keep up with policy many employees have been taking English courses offered by language school Berlitz Japan Inc. at the firm and have also signed up with e-learning programs, according to Mizushima and other public relations officials.

Mizushima said, however, Rakuten doesn’t intend to “abandon Japan” by selecting English as its language.

“Our policy doesn’t mean that those who are fluent in English would get promoted automatically. English is just an additional skill and employees should be good at their jobs in the first place,” he said.

At Fast Retailing, operator of the popular Uniqlo casual clothing chain, the situation is similar. The chain has been accelerating its overseas forays and aims to expand in China, South Korea and Russia.

By 2012, the company will use English for in-house meetings and e-mail communications if there is at least one foreign staff member in a group. In line with its drive of going global, half of the 600 new recruits scheduled to join Fast Retailing next spring will be non-Japanese, a company spokeswoman said.

Yohei Shibasaki, head of a firm that organizes a career forum and provides guidance to foreign college students who wish to land a job in Japan, said he sees changes in the recruitment practice of Japanese firms that aim to go global, as they are keen to secure “talented foreigners who can be competitive in the world market.”

“In Japan, the population is estimated to decline to 95 million in 2050 (from the current 120 million), and businesses can’t rely only on domestic demand,” said Shibasaki, president of Fourth Valley Concierge Corp., the organizer of the Top Career forum.

“They need to diversify their staff to do business in overseas markets,” he said.

The president referred to the need for Japan to attract from abroad many talented people, like Marcus Tulio Tanaka, a Brazilian-Japanese who played for Japan in the World Cup soccer finals in South Africa.

At the career forum, foreign students can meet with recruiters from such major firms as Rakuten, Fast Retailing, Sony Corp., trading houses Marubeni Corp., Mitsui & Co. and Itochu Corp., and All Nippon Airways Co.

Shibasaki said the policies of Rakuten and Fast Retailing to adopt English as their official language is “reasonable” because the chances of securing outstanding human resources will increase if companies look not just at foreigners who can speak Japanese but also at English speakers who can’t communicate in Japanese.

Yotetsu Hayashi, director of the Ministry of Economy, Trade and Industry’s human resources policy division, said the government has been implementing policies to support Japanese firms in recruiting talented foreign students amid global competition to acquire top-level personnel.

“Front-runners such as Rakuten and Fast Retailing would accommodate non-Japanese staff well, but many other Japanese companies have yet to accept and train them as career-track workers,” Hayashi said.

He said the government has been assisting those firms by offering business Japanese courses and internship programs to foreign students through its partnership with universities and the business community.

As part of a new strategy to spur Japan’s growth, the government is also considering measures to facilitate immigration procedures for talented foreign personnel, depending on their academic and professional career, qualifications and Japanese proficiency.

Hayashi and Shibasaki said there are still many foreigners who want to work in Japan.

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