Japan Employment Update
In recent years, Japan has experienced tumultuous changes, many of which affect recruiting and human resources. In contrast with their parents, todays young Japanese job seekers look for entrepreneurial opportunities and the fast track to success. Meanwhile, older workers are bewildered at the pace of change (glacial by US standards) and frightened at the prospect of a broken lifetime job covenant and the looming possibility of unemployment. Opportunities for women are expanding, yet their career paths are still often blunted, and many of the most talented choose to stay abroad after higher education or work for foreign companies in Japan. The disabled, long shunned, may get a new chance; the number of independent contractors and part time workers is growing, and foreign companies are beginning to attract the best recruits.
Young job seekers face unemployment, but also see new opportunities
Unemployment has reached record levels in Japan. New and entry-level job creation has particularly been stifled, although less so in high tech areas than in traditional sectors. Young people's employment opportunities are suffering. However, some young job seekers are taking advantage of the changes sweeping Japan to find new kinds of opportunity within the economy.
The number of high school graduates without job offers is indicative of the youth unemployment problem. For example, in Hokkaido 77,000 recent graduates are unemployed, having not received a single job offer. The number of high school graduates with job offers in 1998 was less than half that in all of 1997. According to a senior executive at the Japan Federation of Employers' Association, traditional manufacturing and other "old economy" companies that usually hire high school graduates are hiring fewer now, which is affecting the employment of young people. To compound this phenomenon, a recent government survey found that hiring of university and junior college students who graduated this spring hit a record low. These statistics hold true countrywide, in every region, and among both men and women.
While these statistics are troubling, it is not clear whether they hold true for every sector of the economy. Furthermore, there is growing evidence that young people's attitudes about employment may be changing. Many talented young people are looking for "interesting" jobs and are shunning companies that traditionally were held in high esteem. Increasingly, young people view companies in future oriented industries, such as high tech or communications, as the most desirable places to work. In essence, the nations best young people, who once went into government and major companies, are now joining high tech and especially Internet and communications companies. Some believe that young people in these new industries will help build a new Japanese economy. For young workers, the possibility of stock options, an exciting job, a collegial atmosphere and performance-based compensation is particularly welcomed.
Another growing source of employment opportunities for smart young people are U.S., Canadian and European companies, discriminated against in Japan and long ignored by young people and universities. These companies are now able to attract young men and women looking for challenging opportunities not offered by Japanese companies. Young graduates can sharpen their English, obtain excellent salaries, and enjoy good working conditions, as well as other features and perks if employed by western companies.
Recruiting techniques and the rise of online recruitment
Traditional, face-to-face recruiting continues as the norm but is no longer restricted to Japan's elite schools. Recently, a number of Japanese companies have established elaborate recruitment web sites in an attempt to recruit new employees online and save the costs of face-to-face interviews, reach a larger audience, use new technology and participate in the future. Recruiting is becoming more and more sophisticated and some companies are developing carefully crafted web sites with questions aimed at those with a special aptitude or training and/or interest in their products or services.
However, while some web sites have had great success, others, which rely too much on traditional practices in their design, have not been successful. Such sites are elaborate and time consuming, forcing visitors to spend agonizing hours slogging through complex, seemingly endless information. Efficiency-minded young people have created electronic short cuts through these sites by making the results available to the public through the web, word or mouth or software. Unfortunately, other good candidates simply leave these sites, deciding instead to apply elsewhere. Overall, however, young thinking is making real inroads into traditional Japanese recruiting and hiring techniques.
A difficult environment for older workers
Although the old system remains the norm, the fabric of "lifetime" employment is fraying. Japans ten-year recession has placed economic pressure on companies, which must reorganize and cut costs. Where does this leave "older" workers?
The employers' basic concern, of course, is to cut costs, including personnel costs that continue to rise with an employee's age. Thus, older workers are particularly vulnerable. A related consideration is the ever-greater need to rely on high technology in the workplace. Younger workers are much more adept at using this technology than their older counterparts. Some employers are explicitly lowering the retirement age from 60 to 55, then 55 to 50, then 50 to 45 and in some cases even as low as 40. In fact, in Japan older generally refers to those over 45 years of age, hardly old by Western standards. For all these reasons, job security is increasingly an issue for older Japanese.
Japan has no age discrimination law as such, but does have fairly strict workplace laws making it difficult to dismiss any worker. However, companies have ways of making their desires known to their employees. Companies have been known to lower employees titles, decrease salaries, change job assignments and/or descriptions, and move personnel from normal office surroundings to unpleasant ones, as in a vacant or basement area. Although in theory employees in such situations may have grounds for a complaint, Japanese culture frowns on disputes, litigation, and confrontation. Thus, most employees faced with these situations get the hint and quit.
The result of all this is that, despite what was said above about the difficulties some young Japanese face in finding employment, most interesting job postings are for people aged 20-40; recent job postings at one Tokyo unemployment center for "older" workers were for security personnel and taxi drivers.
Pension system woes
To add to these problems, Japans rapidly aging society is experiencing a dramatic increase in the number of older workers and a concomitant drop in the number of younger workers, who are needed to support the government's "social security" retirement system. Without significant reform, in another 15 years there won't be enough workers employed paying into the system to support those receiving benefits. In 1997, there were 4.4 workers supporting each retiree; by 2020 there will be 2 workers and only 1.5 by 2050. Furthermore, the government has estimated that by 2050 32.3 percent of the population will be over 65 years old, more than double the 1995 figure of 14.6 per cent.
To try to deal with this problem, the government recently amended the "social security" law to increase the retirement age gradually from 60 to 65 and reduce benefits by five percent. This new law will phase in for men from 2018 to 2025 and for women from 2018 to 2030. The government also raised its share of the public pension burden from one-third to one-half, beginning in 2002. These reforms will help keep the public pension system from collapsing. Meanwhile, though, private pensions remain at risk, and many have been dissolved. It is estimated that only 30% of Japan's 1,850 corporate pension funds are solvent, meaning 70% can't meet their obligations. Retirement security is less than stable for many older Japanese.
Opportunities for contractual employment
In some ways, though, societal and demographic changes may create some flexibility for employers and unexpected employment opportunities for older workers and retirees. As workers retire, employers will have a large pool of former employees from which to choose. These employers are beginning to offer short-term contracts for specific tasks to exceptional former employees. This practice enables companies to meet specific needs without the burden of a long-term commitment to new traditional employees. Such arrangements are thus beneficial for employers and provide individuals with extra income to pad retirement income and alleviate the economic and psychological effects of retirement. Fujitsu is discussing such arrangements with its labor union and Matsushita Electric Industrial Co., Hitachi Ltd., Toshiba Corp. and Fuji Electric Co. are all considering similar moves.
New programs for disabled workers
In Japan, it is considered culturally impolite to expose the public to disabled persons. Thus, many disabled people and their families feel they should not go out in public, let alone try to find a job. In fact, in the past, even pregnant women kept out of sight, though in present-day Japan this is no longer the case. The environment is also changing for disabled workers. Although there are still very few disabled Japanese workers, their numbers are increasing. But, of course, they pose and create problems and challenges in the work place. Changes to retool Japan for the new century raise questions about special employee groups. For example, how should the disabled to be treated?
Japan s Ministry of Labor recently has stepped-up efforts to support the disabled in their efforts to join the workforce. It is creating a pilot program of support centers for physically and mentally handicapped workers. Initially located in two areas on a trial basis, the goal of the program is to help those disabled persons who are employed perform better in the workplace. "Job coaches," who are really on-site social workers, will be dispatched to workplaces in which disabled employees have communications and other difficulties. Such coaches will assist people in the workplace, mediate disputes and provide training to employees and employers.
Women still face barriers
Japan s traditionally paternalistic society continues to hamper career prospects for Japanese women. Every workplace problem for women in the US, including discrimination in recruitment, hiring, salary, the glass ceiling and harassment, is an even greater problem in Japan. Japanese women at large companies are often kept off the professional track entirely and relegated to clerical roles.
For these and other reasons, many Japanese women come to the US for higher education. Once their education is complete, many do not want to return to Japan to face an openly male-centered work environment with restricted growth opportunities. 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 is critical to Japan's future. Fortunately for US and European companies with operations in Japan, when such women do return to Japan to work, they are often interested in working for foreign companies. Thus, western-educated returnee women are a fantastic source for candidates in staffing your Japan office.
The Japanese are very slow to change their traditional social and business practices, but change is taking place. It is important to keep carefully focused and up to date on the employment practices of this, the second largest economy in the world. Once these changes take hold, Japan may once again be the worlds economic leader.
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