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Japan’s Dilemma of Attracting and Keeping Foreign Talent

Himeda Konatsu [Profile]


Demand for foreign employees is on the rise in Japan, both as a way to boost the country’s international competitiveness and to shore up the workforce as the population grays and birthrate falls. Yet Japanese companies will need to take an honest evaluation of their corporate culture if they hope to fully utilize and retain foreign talent.

Overworked and Underpaid

One evening during a rare stint of late-night overtime, a female employee in Shanghai’s financial district noticed workers at an adjacent Japanese bank silently toiling at their desks at 11 pm. The staffers gave no hint that they were getting ready to leave any time soon, prompting her to wonder why Japanese work such long hours. One of her coworkers had witnessed a similar spectacle a few days earlier and both young women became convinced that Japanese banks were scary places to work.

According to the 2016 White Paper on Japanese Companies and the Chinese Economy published by the Japanese Chamber of Commerce and Industry in China, there were 23,094 Japanese companies with operations in China and more than 10 million Chinese working directly or indirectly for Japanese enterprises at the end of 2012. Chinese have ample first-hand experience with Japan’s corporate culture. This, however, does not means that they have come to accept it. Indeed, the catchphrase Gongzuo yali tai da (There’s too much pressure at work) has become a common complaint among employees of Japanese firms in Shanghai.

There is nothing new about on-the-job pressure, but for Chinese the phrase expresses discontentment at working long hours at low wages. A 31-year old Chinese male employee of a Japanese chemical manufacturer sums up the sentiment, saying, “The benefits at Japanese companies aren’t bad compared to smaller local private enterprises, but that doesn’t mean I’m satisfied. What I really want is my company to stop asking me to do tasks that don’t fit my pay grade.”

Monthly salaries of office workers at Japanese companies in the Shanghai area average around 6,000 to 8,000 yuan, but can vary from 4,000 yuan at the low end to as much as 20,000 yuan (1 yuan is approximately 16 yen). Although the Chinese economy has undergone a dramatic transformation since the turn of the century, salaries at Japanese companies have stayed flat for the last 15 years. Workers in China are extremely particular about work benefits, and from the perspective of potential employees there is very little attractive about working for Japanese firms. In fact, the prevailing image of Japanese companies is of low wages, few holidays, and hardly any opportunity for promotion.

Disinterest in Japanese Companies

More than 670,000 Chinese live in Japan today, including many who work under the same contract terms as their Japanese counterparts. Yet Japanese companies are not exactly winning over Chinese employees with attractive remuneration packages. One 35-year-old woman working for an airline in Japan puts it this way:  “For now, things at my workplace are going well and I have developed some good interpersonal relationships. However, I am not so committed to working for a Japanese firm that I won’t head home in the blink of an eye if that balance is lost.”

Back in the 1990s many Chinese dreamed of working at Japanese brands like Toyota, Panasonic, and Sony. Over the years, however, such aspirations have given way to disenchantment. A Chinese male employee in his 20s at one of Japan’s top manufacturers expresses his frustration at the rigid, vertical structure inside companies. “We don’t exchange a single word with anyone from sections adjacent to ours,” he says. “I joined the firm because it was a global enterprise, but this isn’t the case as far as my positon goes. Thanks to cost cutting, only department and section managers take business trips abroad. I’m currently looking for a new job.”

Seeking Out Foreign Talent

The number of international students in Japan topped 200,000 in 2015, with Asian countries accounting for more than 90% of the total. Nearly half are Chinese, but students from smaller countries like Myanmar are on the rise.

Yokohama-based Altech Corporation is one Japanese firm that is actively recruiting talent from Myanmar. Founded in 1968 as a design office, Altech now specializes in dispatching engineers to clients. The company is not a standard recruitment agency, but hires promising applicants as regular employees, sending these out on assignments. The firm currently has around 3,000 workers, including numerous foreign-born engineers.

Aung Kyaw Phyoe, a 36-year old from Myanmar, has been working at Altech for six years. As part of the firm’s international section, he is charged with promoting business in his native land. “The last few years have seen a wave of companies from around Asia setting up operations in Myanmar,” explains Phyoe. “I have only ever heard positive things about Japanese firms and Japanese people. It has been a childhood dream of mine to join a Japanese company, so this was the perfect opportunity.”

Phyoe says he has stayed at Altech for six years because of the way the company looks after its junior employees. “I always feel that I’m valued.”

This supportive relationship between veteran employees and newcomers is a defining aspect of Altech. Half of international section staff are foreign nationals. Phyoe himself was hired based on what he says was his “consideration for others” while accompanying company staff during an onsite visit in Myanmar. “When we hire, we don’t distinguish between Japanese and non-Japanese candidates,” emphasizes Honya Tsuyoshi, head of Altech’s international section. “Rather, we stress their person-to-person communication skills.”

Altech is not the only company openly recruiting staff from Southeast Asia. Omtec, a Tokyo-based construction firm specializing in pile driving and foundation work, brought on 29-year-old Nguyen Minh Hoang of Vietnam in the spring of 2016 in the hope of grooming him for an executive position. Behind the decision was the Japanese government declaring the strategic goal of increasing infrastructure exports. Omtec has come to realize that the welfare of its operations overseas is dependent on the foreign talent it cultivates in-house.

For Nguyen, joining Omtec was a dream come true. He first came into contact with Japanese know-how while studying freeway design at Vietnam’s University of Transport and Communication. “I found out about bridges in Vietnam were being built using Japanese overseas development assistance,” he says. “I was eager to learn about the sophisticated technology.”

Today he has done that and more. The experience he has gained in leadership roles at a number of construction sites in Tokyo and have raised his aspirations. “I have experience that is unique to my Japanese colleagues,” he says. “I want to continue to find better approaches to improve how things are done on site.”

  • [2017.01.11]

Journalist. Relocated to Shanghai in 1997. In 1998 founded a Japanese-language information magazine covering trends among Japanese businesses targeting China. After stepping down as editor in the summer of 2008, launched the online Asia biz Forum (AbF) to provide information on Chinese and Asian business. Graduated from Shanghai University of Finance and Economics School of Public Economics and Administration in 2014. Her works include Chūgoku de kateru chūshōkigyō no jinzai senryaku (Successful Human Resource Strategies for Small- and Medium-Sized Companies in the Chinese Market).

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