Hiring and recruitment challenges in Japan

For various reasons, powerful companies in Japan home to amazingly advanced technology and manufacturing capabilities in several industries have failed to become as global as their peers overseas.

One of the challenges in achieving their globalization goals is their inadequate talent management strategy.

Like everywhere, Japanese HR professionals are trying to do justice to everything from recruiting to engaging to retaining talent in everchanging competitive markets to help organizations remain innovative.

What’s stopping businesses in Japan from moving forward

• Traditional hiring practices

White-collar recruiting typically begins at the graduate level, where companies ready promising students from prestigious universities for “lifelong employment.”

In this “Shinotsu” culture, new graduates are recruited systematically every April based on their ambition, communication skills, and character.

Unfortunately, these fresh hires come with no specific job skills. According to a 2015 Robert Walters survey, nearly 50% of the employers had difficulty finding candidates with the required technical knowledge.

Firms then lack the flexibility to adapt to the changing requirements, and the training period to get them to work ready can be time-intensive.

Job positions are usually filled by internal candidates.

For recruiters, when there is a lack of adequate domestic talent, hiring foreign workers is not seen as an attractive option by most companies. (But this is changing!)

• Rigid business practices

The Japanese “Tateshakai,” or vertical society, age, and seniority are sacrosanct. This can be demotivating for young, creative employees who also can’t get ahead based on skill alone.

Personal desires have no place in the traditional workplace where conformity, teamwork, and loyalty are all important attributes.

The egalitarian compensation companies and tenure-based promotion are not quite enough for the newer generation. Furthermore, social alienation and fear of failure prevent many young workers from becoming the entrepreneurs they would like to be.

For recruiters contacting potential employees can be difficult as “individual ambition” is frowned upon and the stigma of disloyalty is a huge barrier.

Most companies follow a job rotation/multi-tasking system that ends up producing generalists rather than specialists.

• Dwindling and inadequate talent pool

The same survey showed that 72% of Japanese companies have been affected by talent shortages. Companies will suffer when looking for talent in emerging technologies such as artificial intelligence, self-driving technology, financial planning analysis, and web analytics.

The Hays 2016 Global Skills Index showed a significant talent mismatch in Japan (with a score of just 9.8) resulting in “wage pressure in high-skill occupations and talent shortage.”

A shrinking workforce, low birth rate, lack of creative confidence, and the inability to communicate fluently in English have contributed to a labor squeeze hampering economic development.

The current labor force in several sectors is quite ill-equipped to deal with the pressures of competition and globalization. In jobs which require employees to be bilingual, there are few candidates to choose from.

(This will an urgent need as Japan gets closer to the 2020 Tokyo Olympics and 2019 Rugby World Cup.)

• Cultural impact

An intensely private people, the Japanese show very little engagement on social sites such as LinkedIn (less than 1% of the population is on it!).

However, sites such as Twitter, Facebook, and YouTube which offer anonymity have more success. Then again, for contacting them this becomes a challenge.

For recruiters, sourcing and attracting talent are significantly impacted by cultural factors. Apart from privacy and confidentiality issues, winning employees’ trust and convincing them to change jobs can be daunting.

Company culture favors recruitment of qualified candidates via referrals, and job advertisements typically have poor response rates in Japan.

For companies that don’t command strong brand reputation, attracting a candidate is not easy.

In Japan, changing jobs is an important decision and often candidates need time to speak with families before accepting an offer.

This can be frustrating for hiring professionals.

How the HR function can reassess its recruitment strategies

In the last decade, Japanese companies have been rigorously rethinking their hiring practices and revamping the traditional talent management system to deal with the changing economic environment.

To boost its innovative culture, social norms are now shifting to become more supportive of a vibrant startup ecosystem.

HR professionals understand that the values, both business and social, which were once dominant are no longer on the front burner.

Let’s look at some of the new recruitment approaches of talent acquisition professionals in Japan companies:

• Embracing diversity

With its working population decreasing, Japan is embracing diversity and inclusion to meet the goal of sustainable economic growth. In light of Abe’s “womenomics,” HR professionals in firms such as Daiwa Securities Group Inc. are working to boost women involvement and mobilize the elderly population by modifying policies; examples include providing childcare and flexible work arrangements and initiating executive leadership training programs for women.

For example, Snack food maker Calbee Inc. had 20% women managers in 2014 compared to 5.9% in 2009. In a bid to improve diversity, the company also had the drive to recruit people who graduated five years ago.

There are more than two jobs for every job applicant in Tokyo.

The talent shortage is worse in smaller companies. However, rigid hiring practices are changing; HR is considering foreigners (and bots).

In 2017, Japan had over a million foreign workers. Japanese HR are also stepping up mid-career hiring efforts to fill positions.

• Creating a global rotation system

Japanese firms are slowly moving toward global HR practices.

Companies such as Shiseido, Komatsu, Nissan, and Sony send top executives for an international stint to broaden their experience and skill set.

HR can ensure training of core employees to successfully function globally, be comfortable in cross-cultural settings, and be able to make sensible, management decisions independently.

For foreign ops, employees hired locally also need to be given career advancement and rotational opportunities and not just left to higher management, which is mostly Japanese.

• Doing more than recruiting and internal placement

Traditional HR philosophies are not helping to manage a younger or diverse workforce.

HR can enforce policies where Japanese employees are required to communicate with foreign co-workers in English (as Mitsubishi Corp. does). HR should identify employees (regardless of their nationality) who can be pushed for global executive training and deployed overseas.

HR needs to create a compelling employer brand to attract the right talent. A Gallup survey shows that Japan has a really low (7%) percentage of engaged people.

HR professionals must address issues such as long working hours, low take-home pay, rigid corporate culture, seniority-based promotion, harassment, and unfair reward systems to reduce disengagement.

Long-term engagement will result in more actively engaged employees, lower attrition, and better productivity due to increased motivation.

The current business landscape in Japan

Japan’s business landscape is marked by a blend of traditional practices and modern challenges. Despite being a global leader in technology and manufacturing, Japanese firms often struggle with globalization due to rigid hiring practices and a conservative business culture. The traditional “Shinotsu” recruitment system, focusing on hiring fresh graduates for lifelong employment, poses challenges in acquiring specialized skills quickly. Additionally, the vertical societal structure (“Tateshakai”) impacts workplace dynamics, often stifling young, innovative talent.

Japan also faces demographic challenges like an aging population and low birth rates, which exacerbate talent shortages, especially in emerging technologies. While there’s a gradual shift towards more inclusive and diverse hiring practices, including mid-career hiring and increased women’s participation, the transition is slow. These factors collectively create a unique business environment in Japan, requiring innovative strategies to navigate successfully.

How HackerEarth can make your talent search easier in Japan?

HackerEarth offers solutions that can significantly ease the talent search in Japan’s unique business environment. By leveraging its comprehensive suite of technical assessment and remote interviewing tools, HackerEarth can help Japanese companies overcome traditional recruitment barriers.

For instance, HackerEarth’s platform can assist in identifying highly skilled candidates regardless of their educational background, which is particularly valuable in a market dominated by the “Shinotsu” system. Its skill-based assessments and coding tests allow companies to focus on practical skills rather than just academic pedigree. This approach is beneficial for identifying talent in emerging technologies, where there’s a current shortage in Japan.

Furthermore, HackerEarth’s platform supports diversity in hiring, enabling companies to tap into a broader talent pool, including mid-career professionals and underrepresented groups. This aligns well with the changing dynamics in Japan’s workforce. Additionally, its user-friendly interface and efficient screening process make it easier for companies to adapt to global HR practices, facilitating a smoother transition into modern recruitment methodologies.

Conclusion

HR has to work with the business leaders to ensure the success of their initiatives—flexibility, skill-based recognition, self-development, challenging work opportunities, social projects, strong language skills, diversity, candidate experience, and individual enterprise.

Japan has gone from being a seller’s market to a buyer’s one. Potential recruits are asking more questions and are more focused on individual career advancement than before.

Source: Japan Today

“Recruitment today is about processes, technology, and people who represent your brand and messages on your behalf,” says Lanis Yarzab, VP Asia–Pacific operations, Pontoon Solutions.

HR need to actively build an attractive employee brand and showcase the company culture via social channels to ensure that a consistent, positive message is delivered.

Japanese companies are ripe for the automation of the recruitment processes such as screening and some unbiased, skill-specific hiring which can leave the HR to deal with more value-adding services.

Instead of developing talent (not buying) or leveraging internal talent through job rotation, HR needs to use tools for objective assessment and do some strategic workforce planning if organizations are to stay innovative.

Hire talent in your organization with HackerEarth Recruit. Be unbiased.