Employment in Japan: The Struggle for Change
Younger workers, older workers, women, people with disabilities, foreign companies and others are seeking their place in the evolving Japanese Economy.
Japans human resource issues continue to change. Many young Japanese job seekers today are looking for entrepreneurial opportunity and a faster track. The older worker is more at risk than ever before, bewildered at the pace of change (glacial by US standards) and frightened at the prospect of a broken lifetime job covenant. Women see greater potential opportunity, but may feel more comfortable staying abroad after higher education or working for foreign companies at home. People with disabilities, long shunned, may get a new chance. Foreign companies are beginning to attract the best recruits, and the number of independent contractors and part time workers is growing.
Young Job Seekers: Struggling With ChangeNew employment is generally down in Japan, although less so in high tech areas than in the old economy, and this means young peoples employment opportunities are suffering. The number of high school graduates with job offers was lower in 1999 than in 1998 or 1997. In Hokkaido, 77,000 such students went without offers last year. A senior executive at the Japan Federation of Employers Associations says that traditional manufacturing and other old economy companies that usually hire high school graduates are hiring fewer now, making jobs for young people scarcer.
To compound this phenomenon, a recent government survey reported that recruitment of new university and junior college graduates hit a record low this spring. These kinds of declining rates apply, throughout the country, region by region, and to both men and women.
At the same time, young peoples attitudes about employment may be changing. There is growing evidence that many young people are looking for interesting jobs at places to work that will be part of the future in the new global high tech, communications, information and financial sectors. One very successful Japanese entrepreneur believes that the bright young people who once went into government and major companies are now joining high tech companies, especially Internet and communications firms. It is believed this will help build a new Japanese economy. The chance for stock options, exciting jobs, a collegial atmosphere and a whiff of the future is enough.
Another growing source of employment for young people are the U.S., Canadian and European companies. Long ignored by young people and universities, these companies now attract young men and women (the latter feeling slighted in their own country) who understand that the Japanese future is now. In positions with foreign firms, young people can use their English, obtain excellent salaries, enjoy good working conditions, and enhance their chances for travel and more training, among other features and perks.
A number of Japanese companies are attempting to recruit new employees online to save on the costs of face-to-face interviews, reach a larger audience, use new technology and participate in the future. They have established elaborate recruitment web sites for this purpose. Some companies are developing carefully crafted sites with questions aimed at those with a special aptitude or training and/or interest in their products or services.
While some web sites have had great success, traditional practices and thinking have gotten in the way of new recruitment. Some sites are elaborate and time consuming, forcing visitors to spend agonizing hours slogging through complex, seemingly endless information. At times, sites have been clogged due to multiple hits, further slowing what already can be a cumbersome process. This kind of approach has caused young people to create electronic shortcuts through these sites for their friends (or even strangers), and make the results available to the public through the web, by word of mouth or software. The good news, though, is that young thinking is making real inroads into traditional Japanese recruiting and hiring techniques.
Where does all this leave older workers? By older workers we now mean, at least in Japan, people over 45 years of age hardly old by Western standards. As mentioned earlier, the fabric of lifetime employment is becoming frayed, and not just at the edges.
Older workers find themselves in a difficult situation for several reasons. In the wake of Japans recent recession, employers have been focused on cutting costs, especially personnel costs that continue to rise with an employees age. At the same time, companies are relying more heavily on high technology practices in the workplace and there is a perception that younger workers perform better in a high-tech environment. As a result, many employers are lowering their retirement ages from 60 to 55, then 55 to 50, then 50 to 45 and even to as low as 40. These cuts depend on the job, the company, and the degree of pressure to cut costs and become more productive and profitable.
Japan has no age discrimination law as such, but it does have fairly strict workplace laws that make it difficult to dismiss workers. Still, companies can chance an employees title to a lesser title, lower his or her salary, change a job assignment, rewrite a job description to encompass clerical or other less significant activities, and move personnel from normal office surroundings to unpleasant ones, as in a vacant or basement area. Most employees get the hint and quit. Others, however, have decided that suicide is the only honorable way out.
The result of all of this is that more and more of the interesting job postings are reserved for people aged 20 40. Recent job postings at one Tokyo unemployment center included ads seeking older workers for positions as security personnel and taxi drivers.
A Strained Pension System
Japans dramatic increase in the number of older workers and its concomitant drop in the number of young people who are employed is putting considerable pressure on its pension system. In another 15 years, there wont be enough workers paying into the system to support those receiving benefits. The government estimates that by 2050, 32.3 percent of the Japanese population will be over 65 years of age, more than double the 1995 figure of 14.6 percent. In 1997, there were 4.4 workers supporting each retiree; by 2020 there will be 2 workers, and by 2050, only 1.5.
To address this problem, the government has just amended the social security law to gradually increase the retirement age from 60 to 65 and to reduce benefits by five percent. This new law will phase in for men between 2018 to 2025, and for women between 2018 and 2030. The government has also raised its share of the pension burden from one-third to one-half, beginning in 2002.
Private pensions are even more at risk, and many have been dissolved. It is estimated that only 30% of Japans 1,850 corporate pension funds are solvent, meaning 70% cant meet their obligations.
The news may not be all bad, however. It is possible that these shifts in age and other factors in employment practices may create some flexibility and unexpected employment opportunities for older workers. In any national movement affecting large numbers of people, the law of unintended consequences usually plays a surprising role. As workers retire, employers will have a large pool of former employees from which to choose. These employees can and are beginning to offer short-term contracts for specific tasks to these former employees. This enables a company to meet a specific need without having to burden itself with the salary, benefits and related costs, and long-term commitment needs of traditional employees. At the same time, these assignments may mitigate the economic and psychological effects of retirement for the worker. Fujitsu is discussing such arrangements with its labor union and Matsushita Electric Industrial Co., Hitachi Ltd., Toshiba Corp. and Fuji Electric Co. also are considering similar moves.
People with Disabilities and Women Workers
Changes to retool Japan for the new century raise questions about certain employee groups. For example, how should people with disabilities be treated? In Japan, it is considered culturally impolite to expose the public to someone with a disability. Accordingly, some of these people and their families feel they should not go out in public, let alone try to find a job. In the past, this has even extended to pregnant women, though that seems rather pass in the present world.
The Ministry of Labor (MoL), recognizes its special obligation to create a safety net for those with special challenges and to get in step with the practices of other industrial countries. It is creating a pilot program to promote employment of people with disabilities and to provide workplace support to people with physical and mental disabilities who already have jobs.
Women in the workplace continue to be a problem for paternalistic Japan. Workplace problems faced by women in the U.S. tend to be magnified in Japan. This includes recruitment, hiring, salary, workplace conditions, the glass ceiling and harassment.
Many Japanese women come to the US for higher education. Once their education here is complete, many do not want to return to Japan given the male-dominated work environment and restricted opportunity. This is a form of brain drain which Japan can ill afford, especially since many of these women have valuable training in high tech areas, which are critical to Japans future. When these women do return to work in Japan, it is often for foreign businesses that have cultures more supportive of women and their advancement.
The Japanese have been very slow to alter their traditional social and business practices, but today, change is taking place. As a result, it is critical to monitor and focus on Japanese employment practices. When such change takes hold, Japan may once again be a primary world economic force.
Go back to the Pacific Bridge Recruiting Homepage