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A record number of graduates had their job offers canceled this spring, a recent survey by the Ministry of Health, Labor and Welfare reported. More than 2,000 offers in total were withdrawn, double the number of the second worst year — 1998 — when several brokerage firms collapsed.

Cancellations this year involved a total of 427 businesses, most of which said they could not honor their offers because of bankruptcy or business slowdowns. Whatever the reasons, the job-hunting and hiring system needs a serious rethink.

Those cancellations came on top of an already bad year for new hires. Total job offers declined by one-fourth from the year before. The job offer-to-seeker ratio was also at a four-year low, the Works Institute reported. Though the institute downplayed the seriousness of these numbers, suggesting that recent years had excess recruitment, for those graduates out of work, the direness of the situation is beyond dispute. And while many businesses quibble over exact numbers, the total may well be underreported. Whatever the exact numbers, these figures reveal a deep rupture in one basic element of Japan, Inc. — hiring.

For students, the cancellation of a job offer means serious consequences and lots of lost time. College students these days typically start looking for work in the middle of their third year. As the long series of company presentations, entrance exams and personal interviews demand that students skip classes and ignore schoolwork, to have no job offers by graduation means that they will have lost a year and a half of college-level learning with nothing to show in return. That double loss is compounded by a decrease in second chances during these tough economic times.

Families who have paid high tuition must also feel a deep sense of betrayal. The general faith in a university diploma to secure a job has been shaken in the minds of many. With decreasing numbers of students, universities are under pressure to provide statistics on their students’ job-hunting success rates. Friends and classmates of those affected will have surely heard the news, with a consequent increase in pressure, competition and confusion during the coming hiring season. University career centers have become a huge and central part of what universities now offer to students. Those career centers must be taking stock of the advice they will give to job-seeking students this year as the search starts up again this summer.

Companies have lost out, too. The best companies know that new viewpoints and fresh ideas are needed constantly. As corporate entities adjust to new economic pressures, the energy of young people is especially valuable. The loss of even one year of new hires can have long-term repercussions. The initial promise that companies make to their new hires can greatly determine their commitment and attitude toward work. Companies should be reminded that ultimately they are made up of individuals who deserve respect and fair treatment, even before they are in the front door.

Trust is hard to re-establish once it’s lost. When the infamous naitei (notice of acceptance of employment) becomes less trustworthy than it has traditionally been, something else must take its place. In a system that has never fully adopted the Western practice of detailed contracts and transparent conditions, trust counts a great deal. When these kinds of numbers make the headlines, it is a good time to start considering changes.

University career centers can help make better matches for students seeking jobs and provide advice on more than just how to dress right, sit properly and answer interview questions correctly. Old-style connections may have worked well in the past, but now skills, personalities and aptitudes are more important factors to emphasize in hiring. Students need to seriously consider what kind of work they are most interested in, rather than simply taking whatever is offered and making do, hoping perhaps to change jobs later.

Companies would do well to consider how to not interrupt students’ education. The huge time spent in the hunt for jobs means less knowledge and fewer skills brought into the workplace. Companies also need to improve their planning for future personnel needs. Japanese companies are famous for their long-range business mind-set, but canceling job offers made only a couple months earlier is evidence of extremely poor planning. Making young people bear the brunt of the economic downturn is not a viable long-range business policy.

The government needs to bring pressure to bear on companies canceling job offers and ensure that compensation is paid and help offered to locate other positions. There may be no solid promises ever in the business world, but those who had their offers withdrawn, and those who are still searching for jobs, need to be given good reason to again believe that their efforts will yield positive results. Only then will the job-hiring system begin to renew itself and evolve toward more mutually beneficial, fair and productive routines.

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