Japan losing competitive edge due to poor practical training, expert warns

by Sayuri Daimon

Staff Writer

There may be many unemployed young people in Japan, but there are also a lot of companies that can’t fill their vacancies due to a shortage of talented applicants, Darryl Green, president of major staffing and workforce solution service company ManpowerGroup, said in a recent interview.

Warning about Japan’s labor market, Green told The Japan Times there are plenty of openings for technical positions in Japan, such as engineers and in sales, but most people who have recently graduated from Japanese universities have no practical skills to qualify for those jobs.

“The needs of corporate Japan are not met by the young people that are being produced by Japanese education and society,” Green said, adding that unless Japan acts now to address these problems, it’s competitive edge will continue to erode.

According to a survey of 1,043 Japanese firms conducted by ManpowerGroup in January, 85 percent said they can’t find the right people for the positions they want to fill.

The percentage of such firms has been increasing since the annual survey was first carried out in 2006. That year, the rate was 58 percent, but by 2011 it had risen to 80 percent and it reached a record high 85 percent this year.

That figure is 50 points higher than the global average of 35 percent, according to a worldwide survey of 40,000 firms.

Green, who has more than 20 years of experience in Japan and is responsible for the group’s operations in 48 countries across Europe, the Middle East and the Asia-Pacific region, said there is a big gap between now and 20 years ago in how young people are being educated.

“I worked in Nippon Kokan. Living in a company dormitory, they trained us like crazy,” Green said, recalling his early years at the firm, which is now part of JFE Holdings. He said the company even turned some of his colleagues who majored in psychology into systems engineers. “It didn’t matter what they majored in,” he said.

But now, Japanese firms no longer have the money to train people, and what is happening nowadays is that companies are hiring more people from overseas.

“Japanese companies no longer have the capability or the willingness to train people for the long term. And Japanese education institutions don’t train, either,” he said.

Green said companies are now turning to Chinese or Indians, who have professional skills.

“For example, if a company is looking for a Javascript developer, his salary is around ¥10 million or around $100,000 in the U.S. and Japan. But in India, for half of that amount, which is $50,000, you can find a wonderful engineer,” he said.

Many firms are also building new factories overseas, and there is an increasing need for people that are comfortable working overseas. Under such circumstances, Japanese corporate managers should have international mindsets, Green said.

Asked who in Japan fits this bill, he named Masayoshi Son, chairman of Softbank Corp., as one example.

“He promotes internationally thinking people and trains them in an international way. So people who’ve been part of his organization have a rough experience, but they become very well prepared for life in international business,” said Green, who has known Son since the time he was CEO of mobile services provider Vodafone Japan, which was later sold to Son’s company.

He also said Japan should bring in more foreign workers and utilize its prowess in such industries as shipbuilding and textiles because Japan still has excellent infrastructure, such as dry docks in shipyards, and dormitories where their employees can live.

By issuing three-year visas, which can be extended for an another two, for example, Japan could procure a source of labor that is cheaper than what is currently available in China, he said.

“Just 30 years ago, Japan was the biggest shipbuilding nation in the world. Take it back,” he said, adding that by utilizing such infrastructure and foreign workers, Japan can do better.

“Japan is still wealthy. Japan still has infrastructure. Also, Japan still has people that understand that,” he said. “I still think Japan has so much potential.”