CRACKING THE JAPANESE TALENT MARKET: Six reasons why Japan is the hardest country in which to recrui
If you are most foreign business leaders and HR professionals in Japan, chances are you have already experienced disappointments in getting the right people for your own organizations.
In other parts of the world, getting the right people for the right job is supposed to be routine for any seasoned business executive or HR professional but by now you quickly realized that many of the HR or recruitment practices you’ve known do not seem to apply to the Japanese. Why is it difficult to hire the right talent in Japan?
To answer this question, it is important to keep in mind certain aspects about Japan, its people, and its business environment:
1. Demographic Pressures. Japan's population is shrinking (updated: estimated to be -0.16% for 2015 by the CIA World Fact Book) due to its rapidly aging society, very low birth rate , and to a certain extent its high suicide rates (topped the 30,000 mark for 15 consecutive years according to Japan’s National Police Agency). Compounding this are Japan's restrictive immigration policies that shut the door to foreign workforce. It is not an overstatement to say that pretty soon these demographic pressures will eventually catch up with the war for talent, if it has not already.
2. Insufficient English Skills. Japan has one of the lowest English communication skills among the developed nations (some even contend that Japan's English literacy rate at a mere 10% is the lowest in Asia). As a result, foreign affiliated companies who are naturally seeking bilingual talent compete in a very limited pool. Historians have traditionally attributed this to centuries of isolation. However, the country’s present education system has a lot to do with this concern. In Japan, for instance, up until 2011, mandatory English courses start only at the secondary level. Hopefully, government's efforts toward educational reforms may help fix the problem.
3. Acute Supply-and-Demand Imbalance. Japan may no longer be the world's second largest economy, but it still continues to attract a multitude of foreign-affiliated companies that hope to benefit from the country's economic might. However, unlike its Western counterparts, Japan's economic center is heavily concentrated in Tokyo and its 23 wards. As a result, companies inevitably compete for the same hard-to-find, highly qualified bilingual Japanese talent. Indeed, the so-called "war for talent" is nowhere more intense than in Japan (or Tokyo for that matter).
4. Very Passive Candidates. Admit it. The people you want for positions in your company may not be in the market. Neither will you find them in job boards or employment databases. They are either very satisfied with their current organizations (i.e., no push-and-pull factors to leave their companies), or have grown so loyal to their companies that the mere thought of chatting with a recruiter is deemed betrayal. If ever they do decide to explore external opportunities, they would normally use their personal or business connections, if not leave everything to their trusted headhunters or recruiters. Hence, in Japan, good recruiting is not just a transaction but a process that starts with building a strong personal relationship between a recruiter and a candidate.
5. Loyalty and Risk Aversion. You have read about it. Japan’s once famous lifetime employment system greatly contributed to decades of industrial peace and development. The pain of rising from war’s ashes produced a highly specialized and "loyal" workforce who would literally "live and die" for their companies, notwithstanding more superior opportunities waiting for them somewhere else. This same paternalistic relationship between employees and employers, however, bred an atmosphere where it is safe to remain within someone's "comfort zones" and further fed the Japanese's natural tendency to become risk-averse. As a result, it takes a lot of time and effort to make a prospective candidate open up to explore other opportunities, and more difficult to actually recruit them for the job.
6. Perception Problem for MNCs. In Japan, image is everything. And among Japanese talent there is lingering fear of the "hire-and-fire" mentality widespread in companies in the West. There is also a general perception that foreign companies are "unstable" and will pull out of Japan in the first sign of storm. In a country of lifetime employment where people are risk averse, these perceptions paint an image not so flattering about foreign companies.
The above list is not exhaustive. Other factors such as legal (e.g., privacy laws), high unemployment rates, and the current economic crisis also contribute a fair share to this recruiting challenge. If any, however, they only show that the ostensible war for talent is nowhere truer and fiercer than in Japan. The bottom line: when you find the right talent for your organization, act fast. If you don’t, chances are you will lose that talent. It is really just a matter of time.
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