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Hiring and recruitment challenges in Japan

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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:


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