End guidelines for hiring new grads?

A recent proposal by the head of Keidanren (the Japan Business Federation) to scrap the guidelines governing its member companies’ recruitment schedule for new university graduates comes at a time when this rule, which has been in place in varying forms since the 1950s, is not effectively being followed by many major companies. It also appears to reflect the fact that many uniquely Japanese employment practices, such as the annual one-time mass hiring of new graduates, lifetime employment and seniority-based promotion, that lie behind the recruiting guidelines are changing rapidly.

The Keidanren guidelines set the annual timetable for when member firms can start briefing sessions on company information for university and graduate school students, hold job interviews and give employment promises to successful applicants.

The current guidelines, introduced for the hiring of 2017 graduates and to be applied through spring 2020, stipulates that the firms can start their company information sessions for third-year students on March 1, the selection process such as job interviews and exams for fourth-year students on June 1, and give formal notifications to successful applicants on Oct. 1.

Such a rule is meant to get the companies to start their recruiting activities on a uniform schedule — and not too early in the students’ academic careers — so students won’t be kept too busy with job hunting to concentrate on their studies.

The recruitment schedules were initially set in 1953 in an agreement between universities and businesses, which was scrapped in 1997 and replaced by the guidelines set by Keidanren for its member firms. All the while, the schedule itself has been frequently changed. And in fact, the rule has often been ignored as companies began their recruitment activities earlier in an effort to secure good future employees.

The current guidelines have no penalties against companies that don’t follow the schedule. A large portion of Keidanren member firms are believed to effectively start their recruiting activities and give informal notices to successful applicants well before the embargo. Non-Keidanren companies, including foreign-affiliated firms, are not bound by the rule and start their hiring processes early to secure the human resources they need. Some Keidanren member firms, concerned that they will lose out in the competition to recruit talented students, have been calling for moving up the schedule.

After Keidanren chief Hiroaki Nakanishi broached the idea of terminating the guidelines beginning with the hiring of 2021 graduates, concern was raised by small and medium-size companies that freeing up the recruitment schedules would intensify competition among the big firms to move up their hiring activities to secure the talent they want, making it even more difficult for smaller businesses to hire a sufficient number of workers to fill their needs.

On the other hand, major companies with global operations seem to generally welcome the idea. Some of them even suggest that the mass hiring of university graduates in spring — on which the guidelines are based — is obsolete given that the traditional practice of Japanese companies hiring graduates in large numbers once a year, and then training them for the job over the long term on the assumption that they would spend their entire career with that company, is rapidly changing.

They suggest that the hiring practice itself should change as they seek a more diverse workforce to meet their changing needs, and that they should, for example, recruit workers as needed all year round.

Following Nakanishi’s remarks, Keidanren reportedly plans to hold discussions with the government as well as representatives from universities on the matter. No matter what direction the discussions go, it should be made certain that the job-seeking students will not be left confused. If a new rule is to be established, it should be one that is followed by all parties.

New steps should also be taken to ensure that university students’ academic efforts do not take a back seat to their job-seeking activities.