Japan is consistently one of the most difficult countries to hire in for foreign companies. In the latest Manpower Group Survey (Q3, 2021) 76% of employers in Japan responded that they are having difficulty in filling roles. Though an improvement over last year’s survey results (88%), Japan has ranked in the top 3 over the last several years. In this article we will explore some of the challenges that are unique to recruiting in Japan.
Available Talent Pool
Successive years of low birth rates have led to an ageing population. At just under 49 years, Japan has the second highest median age, only second to Monaco according to a 2021 report by Statista.
With an overall labour force that is stagnating, the country has one of the lowest Jobs to Applications ratios. Currently there are around 160 positions for every 100 applicants. This, when coupled with limited English language education in Japanese schools, further limits the talent pool available to foreign organisations.
Additionally, of the 42.5Million workers in Japan, only half a million work for foreign companies.
As a general rule (and we’re not ones that like to generalise too much), Japanese employees on average work for only one or two companies across their entire working life. Job-hopping (the practice of holding a number of jobs in a short time period) has traditionally been frowned upon in Japanese society, where loyalty and dependability are revered character traits.
We have seen an increase in this phenomenon in countries like Australia and the US, particularly amongst younger workers who are changing jobs every 12 – 18 months. This also seems also to be slowly changing in Japan, particularly amongst the younger workforce.
As a function of the smaller talent pool, workers typically receive around 10 -15 unsolicited job offers each day. The majority of which will be ignored given those discussed traits of loyalty and dependability. Against this competitive and cultural framework, an offer therefore, must be truly compelling for an employee to want to consider moving. Job Safety, Company Brand and Reliability and a good work/life balance are high on the list for Japanese employees.
For candidates that do respond to an outside offer, one should also expect a competitive counter offer from the existing employer.
Job Boards and traditional recruitment methods
There are 4 or 5 main Job Boards in Japan and all listings are predominantly written in Japanese Language. So if going down this route, the ad needs to be written by a native speaker. It is also quite a bit more expensive than advertising in Australia. Depending upon the type of Job Advertisement, the cost could be up to 5 times more expensive for a single ad. In our experience, this method can produce results of significant variability.
LinkedIn is also not as widely used as it is here in Australia. Again things are changing, particularly with workers between 25yrs – 34yrs, however the take up significantly lags other advanced economies. As of January 2021 there were around 2.9Million registered LI users. Assuming (a generous) 25% are active users, that equates to only around 1.7% of the entire workforce. Other Social Media platforms such as Facebook and Twitter are more widely used but usually not for job hunting.
So how should you recruit in Japan?
Networks are very important in Japan, both professional and personal. Japanese on the whole are private people and so a high value is placed on personal recommendations from people that are known and trusted. This could mean a referral from a friend, a former work colleague or a trusted professional advisor
When looking for a Recruitment Consultant, it is important to ensure that you do your homework. The shortage of available talent has pushed placement fees in the country up to around 35% of On Target Earnings (OTE) resulting in a large number of recruitment agencies in the market. There are elements of a “sausage factory” approach amongst some of the agencies where junior staff are often charged with leading a lot of the recruitment process. Given the challenging market conditions and opportunity costs, these agencies will move on quickly/give the job less attention if it is taking too long to find a candidate.
It is important that your chosen agency has a good understanding of the cultural nuances as described above. Exclusive or retained searches also usually produce better results.
Interviewing in Japan also requires some cultural awareness. Japanese will typically “under promise” and “over deliver” when it comes to representing themselves. Boastfulness is not seen to be an attractive quality and so the interviewer will need to ask a lot of probing and follow up questions to illicit information about their skills and experience. In this context, Japanese will sometimes struggle to sell themselves and so it is more important than ever to ask those behavioural event type questions that relate more to work scenarios and thought processes.
Having spent a number of years recruiting in Japan, while it is significantly more challenging than recruiting in somewhere like Australia, it is still possible to find outstanding candidates with the right skills and experience and business fit by having a good understanding of the market, an acute awareness of the cultural differences and a good dose of perseverance.
Fifth Executive Cofounder, Graeme Yeatman is a Japanese speaker and has many years experience in recruiting senior positions in Japan. Graeme@fifthexecutive.com.au