While Japan covers an area smaller than the size of California, the island nation still boasts the third-highest GDP in the world, according to Investopedia. With a large, stable economy and a reputation for quality and innovation, it's easy to see why a foreign company might want to expand its borders into Japan. However, the country also presents distinct employment challenges, even for large companies.
On top of competing for talent with Japanese firms, any business looking to recruit in the country will have to contend with different labor practices, work cultures, employee attitudes, and much more. This might seem like a steep learning curve, but Japan's economy and business landscape offers too much opportunity to ignore.
To help you tap into this business potential and expand your global footprint, here's everything you need to know about talent acquisition in Japan.
What You Need to Know Before Hiring in Japan
Before beginning or even planning your recruitment process, it's essential to do your due diligence and research Japan. While specific employment laws and regulations are easy to find online, understanding the intricacies of labor trends, the working culture, and business etiquette isn't as simple.
As an example, life-long employment is a common practice in Japan. Companies often use job fairs as a way to recruit university students and young professionals, getting them interested early on. Then, they'll hire a fresh graduate and develop that individual's professional skills and knowledge over time.
Let's take a look at three critical aspects of recruiting in Japan:
Japan has one of the highest populations of elderly citizens in the world, with nearly 30% of the country aged 65 and older, according to IndexMundi. As this large portion of the population enters retirement, any company looking to recruit in Japan will face mounting challenges in the years to come.
While this workforce would normally be replaced by younger generations, Japan's long-declining birth rates mean that the labor market is continually shrinking. To overcome this problem, your recruiting efforts and employer brand must cater to students and young professionals who are job hunting for their first position.
As a result of the aging population and low birth rates, Japan has been experiencing a dire labor shortage. While there has been a rise in women and older people participating in the workforce, Japanese firms are still struggling to find the talent they need. According to Reuters, many of these companies are now raising wages to attract new workers and ease chronic talent shortages.
Perhaps the largest barrier to recruiting in Japan, outside of the tight competition for talent, is the cultural differences you'll have to learn. For instance, the average Japanese candidate is more cautious when it comes to choosing or changing employers. Nine times out of 10, they'll take a job offer from a well-known Japanese company rather than risk working for a smaller foreign one. There is also a stigma around changing jobs frequently. As a result, many job openings go to recent graduates without much work experience. Meanwhile, those who are employed tend to stay with their company for life.
How Does Recruiting Differ Between Japan and the U.S.?
Due to the unique culture, demographics, and employee regulations, recruiting in Japan is vastly different from the U.S. For example, it can be incredibly difficult to actually fire an employee in Japan, even for performance issues. Unlike the U.S., Japan doesn't allow employers to terminate "at will." This is because the culture places a greater emphasis on one's job, and people often dedicate their entire working lives to a company.
This ties into the concept of "shinsotsu saiyo" in Japan — the traditional hiring process in which companies recruit new university graduates just as they enter the job market. Once they pass the interview and selection process, these employees often remain at the company for their entire careers. While shinsotsu saiyo offers a great deal of job security, the idea of "lifetime employment" is being contested as more foreign companies establish a work culture in which changing employers throughout a career is normal.
In general, the Japanese labor market consists primarily of passive candidates. Whereas U.S. employees are always searching for the next opportunity, the average Japanese person is more concerned with security for themselves and their families. As a result, it can be difficult to find candidates for job openings. But how can companies overcome these obstacles?
What Do Companies Need to Successfully Recruit in Japan?
When it comes to recruiting top talent in Japan, the number one thing companies should focus on is their employer branding and messaging. Because Japanese workers are more likely to accept a job offer from a Japanese company, you'll need an effective way to not only get the word out but promote an attractive image to entice applicants.
Start by creating and posting job ads. It's important to remember that Japanese people don't often use social media to find employment opportunities. Instead, post your openings on popular online job boards or attend job fairs to recruit university students and young professionals.
Alternatively, you can partner with an RPO service provider with intimate knowledge and experience in recruiting high-quality candidates in Japan.
Recruitment Process Outsourcing in Japan
Recruitment process outsourcing (RPO) enables you to outsource part or all of your recruiting process to a trusted business partner. Whether you're opening a new location in Japan, or you're looking to hire Japanese workers for your foreign company, RPO provides you with deep regional knowledge and expertise to support your hiring initiatives. As a fully integrated partner with your business, they'll work with you to develop a proactive talent acquisition process that delivers high-quality candidates for any position.
Envision is Japan's leading RPO firm, specializing in flexible talent acquisition solutions that deliver exceptional results. To learn more about recruitment process outsourcing in Japan, contact us today.