The Hunt for DX Champions
Japan faces an uphill climb when it comes to digital transformation.
From left: Marcus Aakerholm and Lyndsey Hughes (Photo: Shelley Mae Photography)
Despite being a nation renowned for assimilating advanced machinery and technology into everyday life, the reality of Japan’s IT workforce paints a very different picture.
According to a survey of companies conducted by the Ministry of Internal Affairs and Communication, Japan’s information and communication technology (ICT) sector is falling short when it comes to digital transformation (DX). This is largely due to a lack of qualified technology talent. In 2018, there was a shortage of about 220,000 ICT workers, and the shortfall is expected to reach 450,000 by 2030.
At the same time, Japan’s economic landscape is experiencing a generational shift, influenced by new government policies and changing regulations designed to elevate the country to the global DX standard.
Slow Road to DX
Robert Half Japan supports clients undergoing digital transformation and is seeing promising progress.
“In many Japan-headquartered global companies, the pace of change has tended to be slow and incremental,” said Managing Director Lyndsey Hughes. “But this has started to shift over the past few years and momentum is building.”
“Even prior to Covid-19, we had started to see signs of large Japanese corporations incorporating their DX agenda into their corporate vision and hiring ‘disruptive’ senior executives from outside the organization—even from outside Japan—to expedite transformation,” he said. “It seems now there really is an appetite and a glimmer of commitment from corporate Japan to transform their global businesses.”
The 2022 IMD World Digital Competitiveness Ranking ranks Japan 29th out of 64 countries examined in terms of know-how, development of digital technologies, and preparedness to exploit digital transformation. Asian countries finishing ahead of Japan include South Korea (8th), Taiwan (11th), and China (17th).
Hughes noted that many companies have been stalling in their DX initiatives, often because they lack real commitment from the top, face resistance from middle management, or are short of know-how on how to manage global functions. They may also struggle to attract, and appropriately compensate, ‘new’ skill sets to implement the change.
DX touches every area of an organization, he explained, and while every company faces its own unique set of challenges, there are consistent themes that Robert Half is hearing from its customers. These include overhauls to human resources policies to adopt pay-for-performance compensation to attract specialized talent.
Robert Half is seeing companies start to take diversity, equity, and inclusion initiatives seriously, and many are ready to pay higher agency fees to prioritize the scouting of female talent as well as hiring, and even importing, more foreign talent. And while there is still a long way to go to embrace all types of diversity, at least the conversations have started, Hughes said.
In addition, large Japanese companies are beginning to move away from in-market IT to globally distributed IT functions that allow them to benefit from scale, respond more quickly to market changes, and mitigate cybersecurity risks.
There has also been a surge in the hiring of chief data officers to centralize data and analytics expertise, as well as breaking down data silos and harnessing the power of data across an organization.
Too many companies are entering uncharted DX territory, Hughes pointed out, and often lack the skills and expertise to deliver on such projects. This is where Robert Half and its business consultancy subsidiary, Protiviti, come in.
Helping Hand
“At Robert Half Japan, we have a strong focus on placing bilingual technology talent with foreign affiliates in Japan to bridge with their HQ, or to global Japanese firms looking to bridge their overseas subsidiaries,” explained Marcus Aakerholm, division director of business transformation. “As an enterprise, we have a unique capability to support DX initiatives in different ways, whether by placing permanent employees across various functions, specialist contractors to jump into different projects, or through Protiviti.
“In many cases, we offer a tailored and blended solution of outsourced consulting assignments combined with project contractors and permanent resources,” he added. “This allows us to respond flexibly to the fluid and diverse needs of our customers, across their global operations.”
Aakerholm has witnessed firsthand the unique market conditions affecting DX in Japan.
“A typical scenario for our team is assisting foreign-affiliated organizations that need to undergo a corporate-wide system update,” he said. “In these cases, the US office will send an internal team to implement the changes but, due to the unique market requirements here, their efforts are rarely implemented or understood by domestic teams. Our bilingual project managers and functional experts bridge that gap.”
Robert Half supports many Japan-headquartered clients that require bilingual talent with subject matter or technology expertise to interact with overseas subsidiaries.
In one example, Aakerholm’s team helped a global media company by bringing in a specialist consultant with the required language abilities, project management skills, and knowledge of system implementation to complete the introduction of finance modules of the Workday system.
Look Within
“When a company needs to evolve, it’s not just about bringing in new people,” said Hughes. “Organizations also need to create a culture of internal evolution so they can continue to adapt to changes in the market, customer needs, and so on.
“Generally, organizations think in functional silos, and those silos are often lacking a specific skill set,” he said. “But those skill sets may exist elsewhere in the organization. There are all sorts of capabilities floating around in every company, perhaps in a different function or a different market, so there isn’t necessarily a need to rush out and hire quickly.”
Smart leaders are adept at unearthing the hidden potential in an organization, he added, and creating an environment of empowerment to enable the enablers.
One Robert Half client innovated by introducing a “chief future officer” role and invited a relatively new hire to join the company’s transformation steering committee, alongside senior leaders from across the business, to bring a fresh perspective and add a new voice.
“People new to the organization often have the clearest minds to and come up with innovative solutions,” Hughes said. “Younger generations want their voices to be heard, to feel they are contributing, so tapping into their passion and capabilities is very important and can be a key catalyst for successful DX.
“Often, a manager thinks the candidate they need is a reflection of who they are and their own skills,” he said. “But they need to identify where they and their organization are coming up short and then find the person to fill that gap.”
The deficiency might be a hard skill set, such as expertise in a new technology stack or building global enterprise architecture standards, but it might also be the ability to champion new ways of doing things, exposure to different industries, or diversity in hiring to bring in better creative problem-solvers.
“I believe leaders need to be deliberate in understanding the current skill, personality, and knowledge gaps,” Hughes said. “And then ask themselves what their team members can do to help drive the transformation, what unique talents can they bring to the table.”
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