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Keidanren (the Japan Business Federation) and representatives from universities have compiled an interim report calling for a departure from the long-established practice in which most big companies recruit prospective graduates en masse around the same time of year to start working in April — and a shift to more diverse hiring practices, such as year-round hiring, which is much more common in other countries and is increasingly being adopted here by firms in the IT and other growth sectors. The move reflects a sense of crisis among many Japanese firms that if they stick to the established hiring practice they will lose out in the race to secure employees with the knowledge and skills they need in the increasingly competitive and globalized business environment.

The practice of hiring new recruits en masse with a spring start date — when the nation’s academic year ends and begins — is indeed closely linked with other key aspects of the employment systems used by many large Japanese firms. A company will give new hires in-house education and training needed for their jobs on the premise that the employees work for the firm on a seniority-based pay and promotion until they reach the mandatory retirement age. That was an efficient system that made sense in the nation’s postwar economic development, but Keidanren Chairman Hiroaki Nakanishi contends that it no longer suits the needs of the times.

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