Employment Outlook: Japan
2012-02-01
by Mary Anne Thompson
According to Going Global’s President and Founder, Mary Anne Thompson, nearly a year after the country’s most powerful earthquake and ensuing tsunami, Japan continues its long road to economic and employment recovery. Employers in many job sectors are hiring again and the demand for both foreign workers and soft skills is growing as talent shortages abound.
Japan, the world’s third-largest economy, suffered a devastating economic blow in 2011 as a result of its record-making March earthquake, tsunami and ensuing radiation. These disasters, coupled with large government debt, persistent deflation, and an aging and shrinking population are major complications for Japan’s economy, according to a report from the US Commercial Service.
Experts may disagree about whether Japan's economy is still in recession, but it has definitely contracted this year more than was originally estimated. Growth was hurt by the earthquake and tsunami, which damaged infrastructure and the supply chain and slowed production. But Japan’s recovery has been further slowed by uncertainty about the global economy, according to Yuichi Kodama of Meiji Yasuda Life Insurance in Tokyo. Moreover, the strong yen is hurting exports and preventing businesses from expanding in Japan.
Despite all the challenges to the country, Japan is showing the world a tale of resilience and solidarity as it works together to improve its economic situation. Japanese employers are hiring again across most job sectors, and they feel optimistic about their continued future growth. The return of foreign workers and those possessing soft skills is needed, and employers search for the talent needed to fill the jobs available as the country recovers.
Japan’s Labor Force
Japan’s labor force consists of some 65.9 million workers. Most are highly educated, with more than 50 percent of high school graduates going on to higher education at junior colleges and universities. If those attending technical and specialized schools are included, the percentage increases to more than 70 percent, according to the Japanese Ministry of Education, Culture, Sports, Science and Technology.
Japan's unemployment rate fell to 4.3 percent recently, with 2.76 million people without jobs, a decrease of 14.0 percent from the previous year. However, it is important to note that these statistics exclude the three prefectures -- Iwate, Miyagi and Fukushima -- that were hit hardest by the earthquake.
There are only around 2 million foreign permanent residents of Japan. After the earthquake and tsumami, some foreigners, many of them Chinese, left their jobs either to move temporarily further south or to leave Japan altogether. These departures were controversial and were widely published in the Japanese and international media. The loss of so many foreign workers is another challenge to recovery.
Japan wants the foreign workers to return. In fact, the Department of Immigration announced last spring that anyone previously in Japan on a technical training or student visa could return without a re-entry if their former employer wants them back.
A recent survey by the Japanese government revealed women hold only 8 percent of managerial jobs in Japan (compared to the US, where women hold 43 percent of supervisory positions). In fact, only 65 percent of college-educated Japanese women are employed, with many of them in low-paid temporary jobs. This is “a significant lost economic opportunity for the nation,” according to a recent Goldman Sachs report. More than two-thirds of Japanese women leave the work force after their first child, often as a result of cultural norms, as well as insufficient child care. If Japan’s 60-percent female employment rate rose to 80 percent (the rate among men), there would be 8.2 million more workers “to replenish its rapidly aging population and raise its gross domestic product by as much as 15 percent,” said the report.
In a recent report on the impact of Japan’s triple disasters, the International Monetary fund (IMF) urged that the country’s efforts to provide temporary assistance to firms and workers “could be further complemented by targeted training and job search assistance. The earthquake also provides an opportunity to accelerate broader labor market reforms and measures to raise employment opportunities for women, the young, and the old.”
The Robert Walters Asia Job Index tracks the volume of print and online advertisement for professional positions. The Index reports that the earthquake and tsunami did affect recruitment advertising levels, with job advertisements down 7.3 percent soon after the disasters. However, there has been strong demand for construction and IT professionals. And companies recently began to replace jobs in administration and account servicing that had been cut back during the global economic downturn.
And while the outlook from many international head offices is cautious, the sentiment within Japan remains positive. One sector that still suffers from a degree of conservatism is the medical industry. Recruitment activity fell by 23 percent soon after the earthquake, as many biotech companies reassessed their Japanese operations and considered opportunities for relocation.
Hiring Increases in Most Job Sectors
The most recent Employment Outlook Survey conducted by Manpower, Inc., a leading global employment services provider, found Japanese employers were optimistic about overall hiring plans, which should result in healthy opportunities for jobseekers through the end of the year. The survey interviewed a representative sample of 1,326 employers in Japan. Sixty-two percent of the employers interviewed anticipate no change in their hiring plans, 14 percent expect to increase headcount during the next quarter, while only 6 percent expect to reduce their workforces during that time, “perhaps indicating a growing measure of labor market stability in the upcoming months,” according to Manpower.
Employers in all three regions of Japan expect to increase their workforce in the next three months, and employers in most industry sectors expect the hiring pace to increase from three months ago. Job prospects are strongest in the manufacturing sector, where employers are working to return production to the levels prior to the earthquake and tsunami.
Employment is up from last year in the finance, insurance and real estate sector as well as the mining and construction and the services sectors. Employers in the transportation and utilities, and the wholesale and retail trade sectors also report slightly higher employment than last year.
Jobseekers in public administration and education are likely to encounter a stagnant hiring environment, with employers there reporting the only negative hiring trend of any segment.
But, even though general demand in education is stagnant, Japan is seeing “an English crisis.” English teachers are needed for legions of Japanese businessmen, or "salarymen," who need to polish their skills in English as Japanese companies look increasingly into overseas business opportunities.
In its most recent Global Talent Shortage survey, Manpower found that 80 percent of employers in Japan were having difficulty finding suitable talent to fill open positions. By way of comparison, the global average is 34 percent. Employers in the Asia Pacific region cited sales representatives, technicians and laborers as the most difficult employees to find due to lack of available talent. According to Manpower, sales representatives have been the most difficult position to fill in the region every year the survey has been conducted. Laborers and researchers have moved up in the rankings compared to previous years, while skilled trades workers and executive/management positions have moved down.
According to human resources firm Robert Walters, executive-level HR positions have been in demand as companies reorganized their businesses. Mid and junior-level hiring is expected through the rest of this year. Financial analysts and controllers have been in demand in finance departments, and a growing number of experienced managers have been hired in supply chain departments, especially in small to medium-sized ?rms.
Robert Walters Osaka also reported recently that young, aggressive sales professionals were in demand in Osaka, stressing that the ability to generate business locally was often more important than ability in speaking English. Software sales positions also saw a boost in demand. Financial analysts and engineers with bilingual skills were in demand, because they often report to foreign managers based locally or abroad.
In Kansai, the pharmaceutical and manufacturing sectors have showed strong performance. Government policies offering incentives for generic medicine drove the demand. A decline in recruitment activity in electronics manufacturing is due to the outsourcing to markets such as China and Korea. Robert Walters Osaka anticipates this outsourcing trend to continue. Salaries within Osaka remained largely unchanged from last year.
Robert Walters expects sales staff to be strongly recruited through the rest of this year, as continued investment in business development in Kansai drives demand. Ongoing globalization strategies should prompt hiring of bilingual candidates especially in accounting, finance, supply chain, HR and marketing.
Hays Specialist Recruitment, a global human resources firm, reports soft skills are in demand in Japan. Employers are seeking candidates with interpersonal, leadership, organizational and language skills. Often, however, candidates tend to focus on the technical or hard skills, says Christine Wright, managing director of Hays in Japan. “Yet these soft skills are highly sought after by employers, who are typically looking for a candidate who not only possesses all the technical requirements needed to perform the role, but who can also bring these additional soft skills to the organization.
Hays is seeing a shortage of candidates with the right technical skills as well as the additional soft skills that employers want in the candidate they will employ. Some employers are becoming more flexible in their requirements and will offer training to a candidate who is otherwise a good fit for the role. But others will hold out for a candidate that matches all their skill requirements – both hard and soft.
Robert Walters reports gradual increases in salaries through the first half of this year in Japan. After the earthquake, higher salaries were necessary to tempt candidates to change jobs, as most were focused on job stability. Top-tier professionals were able to command 7-10 percent increases as well as multiple job offers. The current shortage of candidates is expected to lead to competitive hiring, and salaries are expected to continue to rise as businesses seek to attract the best candidates.
Japan’s Recovery is Ongoing
Japan’s recovery from the natural disasters of 2011 is ongoing, but experts believe in the resilience of the country and its people. According to the International Monetary Fund “The Great East Japan earthquake has had a profound impact on Japan’s economy and is likely to influence policies for some time.” Despite its many challenges, Japan is working to improve its economic situation and the outcome of that is jobs and more jobs.
Mary Anne Thompson is the Founder and President of Going Global, Inc. (www.goinglobal.com) a subscription database service that contains career and employment information for more than 80 locations. More than one million users enjoy Going Global’s unique content, which is researched in-country by local career experts and updated annually. She is also an author, lecturer and frequent guest on various media outlets, including NBC and CNN International. Previously, Mary Anne served as an attorney and advisor to President Ronald Reagan in the White House.
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