Business / Corporate | IDEAS IN ACTION

AI-equipped recruiter tries to mobilize Japan's static labor market

by Cory Baird

Staff Writer

Hiroki Shimada can trace the genesis of his company, Scouty Inc., back to a time when he was on the outside of the job market looking in.

During his graduate studies in artificial intelligence at the University of Edinburgh in Scotland, Shimada was surprised to see many of his undergraduate classmates placed in careers completely divorced from their own skills or background.

“One of my friends was a very capable designer, but for some reason he started working at a large advertising company for a low salary,” Shimada said in an interview at his startup’s Shibuya office. “But if, for example, a design company saw the designs my friend could produce, my friend may have found a better-fitting job.”

Thinking Japan’s job market was prone to producing mismatches between companies and workers — especially for mid-career professionals — Shimada set out to offer companies a new way to search for job candidates by providing a more detailed snapshot of each candidate’s skills.

The pitch

The aim of Scouty is to ease the burden on job seekers and lower the costs for companies looking for workers. If successful, Scouty also believes its software will be able to access a new market of workers looking to change jobs but who have not done so due to a lack of time or resources.

Many recruiting companies charge high fees for their services. More importantly, the process puts a heavy onus on the candidates, who have to fill out forms and provide other work history information to apply for a job.

But Scouty is hoping to surpass recruiting companies with its software, which automatically creates lists of candidates by scraping public information on the web from social media profiles and programming forums. These constantly updated databases can then be accessed by paying Scouty for access.

Outside of convenience, the automated process also provides companies with one other perk — candidates cannot easily deceive employers about their qualifications.

Relying on a combination of artificial intelligence and traditional technologies, each individual candidate’s profile contains ratings on programming skills, personal and work interests, and a prediction as to when a candidate is likely to change jobs.

While the company is still in its early stages, Scouty’s Shimada claims its software already surpasses the traditional recruiting industry by some metrics.

In one test, a company using Scouty’s software sent out 42 job invites to candidates predicted by the AI as most likely to change jobs. Of these initial invites, 16, or almost 40 percent, responded, a far greater rate than recruiting firms who often see response rates in the single digits.

While competing on price is important for Shimada, the potentially groundbreaking feature is giving companies who use its software a larger and more comprehensive list of job candidates than can be offered by traditional recruiters, possibly activating a whole new group of workers with a latent desire to change jobs.

The market

A great deal of ink has been spilled as to why Japanese workers change jobs so infrequently. But in looking beyond the traditional tropes about culture and values, it is clear that structural problems, such as how companies search for workers, is at least one large contributor to keeping workforce mobility low.

More than 70 percent of the working age population aged 30 to 59 were either considering changing jobs or had already done so, according to a 2017 survey by the Ministry of Economy, Trade, and Industry. But the same survey shows about 23 percent of the same age group had not taken any action.

Shimada believes Scouty’s software can in some small way help grease the wheels of the job market, encouraging more people to switch jobs.

The hurdles

While Scouty’s services are mainly geared toward the IT industry, the company plans to build out its services for other industries as well.

The current version automatically accesses publicly available information from such social networks as Twitter and Github, as well as personal blogs, to create candidate profiles.

To continue expanding, the company will need access to publicly available data from these networks, a process that has come under greater scrutiny since Cambridge Analytica was found to have accessed the information of millions of Facebook users without permission to allegedly influence elections. Scouty is hardly alone in its reliance on publicly available data.

This section runs exclusive stories on startup founders with unique business models interviewed by The Japan Times.

Coronavirus banner