Supply Change
One thing the pandemic laid bare was the fragility of supply chains. Companies are taking the lessons learned, but for Japanese companies, shifting gears can be difficult. How can they connect with the right leaders?
Recruiter Robert Half on the evolving landscape of supply chain management.
From left: Kazuko Oya and Taku Yamashita (Photo: Yuuki Ide)
One thing the pandemic laid bare was the fragility of supply chains. When borders closed and restrictions to contain the spread of the coronavirus put a crimp on the movement of people and parts, manufacturers had to quickly adjust their logistics. As a changed world moves forward, companies are taking the lessons learned and looking to improve their supply chain management.
For Japanese companies, shifting gears can be difficult. Entrenched and outdated enterprise resource planning (ERP) systems, and even manual processes centered on Microsoft Excel, scream for digital transformation. But to make the change requires knowledge, experience, and leadership.
Specialized recruitment agency Robert Half is helping connect companies with consultants who can lead the way. Its team of supply chain management recruitment consultants has unique insight into the Japanese market, with extensive knowledge and established networks nurtured over 18 years. Taku Yamashita and Kazuko Oya shared with The ACCJ Journal the situation and trends in the Japanese market and how they are able to adapt to client needs to deliver exceptional value and results.
“Our unique differentiation is that we have ironclad relationships with supply chain management gaishikei [foreign-capital companies] seeking bilingual candidates,” explained Yamashita, director of supply chain management and human resources. “We completely understand skill sets, experience, and value for our clients.”
Oya, the senior division director for supply chain and procurement, noted that their extensive experience allows them “to consult with clients and collaborate to find candidates who offer the highest value and return on investment.”
Elusive Talent
Finding candidates is one of the biggest challenges that Japan faces as its domestic industries attempt to transform how they plan and manage supply chains that Oya and Yamashita said are “late to the party” and behind global standards. One big reason is education. Japanese university degrees are concentrated in areas such as finance, economics, sales, and marketing. An MBA is mandatory for supply chain management, but there are no MBA programs in Japan that focus on it. Consequently, there are few knowledgeable, educated candidates to lead the supply chain transformation.
“For a company starting or going through the transformation, it’s not just about the experience or skill set, but more about the leadership and mind-set.”
One situation that can create challenges for companies that are trying to take a step forward can come during a merger or acquisition. Domestic branches of a company may use outdated ERP systems, while the international branches run on more modern platforms and adhere to best practices. Getting the two systems to talk to one another is not possible. Changing the ERP system is the largest hurdle to overcome, and a consultant is usually brought in to get a new system in place, a process that can take a year or two.
What kind of candidate is needed to carry out such a transition?
“For a company starting or going through the transformation, it’s not just about the experience or skill set, but more about the leadership and mind-set,” said Oya. “There will be a lot of changes—not just to the system, but to the people, culture, and operational processes. So, somebody who is resilient is needed, somebody who is not afraid of making changes and can have an immediate impact from a planning perspective.”
Because of their knowledge of the industry, spanning almost two decades, Oya and Yamashita are able to consult with Robert Half’s clients, both domestic and international, on the challenges, needs, and hurdles they must overcome. They can go beyond recruitment and offer advice on who is the right candidate to fill this role, whether that be a domestic person or somebody from abroad with good Japanese language skills. They may even find the elusive, but highly sought-after, unicorn: someone half in Japan and half out.
“There are young Japanese workers who start in a Japanese company and then want to move to an international company,” explained Yamashita. “These workers may then come back to Japanese companies in their mid-forties or fifties.”
One path to this which Robert Half has noticed is for university graduates to join a consulting company, learn the supply chain methods for five years, and then return.
“They want to contribute to the development of their own country, so they come back to traditional Japanese companies,” Yamashita added.
Why It Matters
One reason that Oya and Yamashita feel that supply chain logistics in Japan lags far behind that found in the United States or other countries is that it isn’t viewed as equally important within traditional companies.
“There are various functions in a company—sales, marketing, finance, human resources—and supply chain is one of these. But in general, in Japan, I feel that it doesn’t get the same respect or visibility as the others, because supply chain is often seen as blue collar,” explained Oya.
But supply chain management is critical to the success of any business, whether a company is manufacturing a car or delivering fast-moving consumer goods to a customer’s doorstep.
““We’ve started seeing more Japanese companies trying to hire people coming from a global background and mind-set.””
One of the most important areas of supply chain management is sales and operations (S&OP), which is in charge of production and demand planning one month, one year, or two years out. Making S&OP more adept and resilient is growing in importance not only in Japan but the whole Asia–Pacific region as many international companies focus on APAC business.
A client that has been growing its overseas business and has its headquarters in Japan realized that, to win the global market, it needed to change its approach to supply chain management and bring S&OP up to speed. A specialty of Robert Half is helping Japanese companies bring international culture and methods from the United States and other countries into Japan, so the partnership is a perfect fit.
“We’ve started seeing more Japanese companies trying to hire people coming from a global background and mind-set,” noted Oya. “Mid-career hiring is something that traditionally hasn’t happened in Japan, but is becoming increasingly common. We’re seeing more people with 30 years of experience at American or multinational companies moving to big Japanese manufacturers with a very long history of hiring new grads and training them in their way, not hiring from outside.”
One of those seasoned veterans could be the missing talent to lead a transformation of your supply chain, and the Robert Half team are ready to partner with you to build resilience for today and the future.
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The Hunt for DX Champions
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. But Robert Half Japan is supporting clients undergoing digital transformation and is seeing promising progress.
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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Future Ready
If Japan is to remain globally competitive and secure its future economy, overcoming the digital talent gap is a must. To find out where Japan is on the road to readiness, _The ACCJ Journal_ spoke with corporate leaders about the current state of talent acquisition and retention.
What must Japan do to ensure that its workforce can compete in a digital world?
We’ve been living in a digital world for quite some time. More than three decades have passed since the World Wide Web began connecting us through zeros and ones. For most of that time, it’s been possible to straddle the line between digital and analog. But if the first quarter of 2023 has made anything clear, it’s that we’re at an inflection point when it comes to technology.
If Japan is to remain globally competitive and secure its future economy, it must embrace digital transformation (DX).
Despite increased efforts to push DX, Japan dropped to 29th place in the 2022 IMD World Digital Competitiveness Ranking, an annual report published by the Switzerland-based International Institute for Management Development that assesses and compares the digital competitiveness of countries based on their ability to adopt and explore digital technologies.
More concerning is that Japan ranked 41st in the talent subcategory and 54th in future readiness.
Overcoming this digital talent gap is a must. For companies, the required skill sets are shifting, impacting not only talent acquisition and retention, but also the country’s education system and overall workplace culture.
To find out where Japan is on the road to readiness, The ACCJ Journal spoke with corporate leaders making DX possible, as well as those helping companies and talent come together for success in today’s digital-driven world.
Widening Gap
Talent acquisition has become a pressing issue for companies across Japan. In a 2022 survey conducted by the Ministry of Internal Affairs and Communications (MIC), 67 percent of Japanese respondents cited a shortage of information and communications technology (ICT) personnel as a roadblock to their DX efforts.
Surveys conducted by recruitment site Doda show a sharp rise in the monthly number of job openings per candidate for engineers and other tech professionals—from 3.44 in March 2019 to 9.54 in March 2022. The Ministry of Economy, Trade and Industry (METI) projects a shortage of 450,000 ICT workers by 2030.
“We have a big problem. It’s a serious talent crisis that is going to get much worse,” said Daniel Bamford, associate director of technology for Asia–Pacific at specialized recruitment agency Robert Half Japan.
Changing Workplace
Faced with a dwindling talent pool and fierce competition, the Japanese labor system must change within a few years if Japanese companies are to acquire good talent, Megumi Tsukamoto, senior adviser at global consultancy J.S. Held Japan LLC, told The ACCJ Journal. The country’s traditional human resources model, according to which compensation is based on age and seniority, has exacerbated the digital talent shortage.
A 2016 comparative survey by METI found that the average annual salary of ICT personnel in Japan was roughly half that of their US counterparts. Workers in their twenties in the United States earned an average of $77,990 per year, while their Japanese counterparts took home just $31,300.
“Workers in their twenties in the United States earned an average of $77,990 per year, while their Japanese counterparts took home just $31,300.”
Tsukamoto noted that, in a bid to obtain and retain talent, some Japanese companies are beginning to offer salaries two to three times higher than previous packages. Some are offering much more than that. This is the result of ICT professionals either moving abroad, or choosing to work for such foreign companies in Japan as Google.
However, higher salaries are just one piece of the puzzle, said Victoria Ryo, associate director at Robert Half. In-demand ICT tech workers expect more.
“A company that provides workplace flexibility, along with benefits, interesting projects, and an international environment, is going to be more attractive,” she explained.
Ryo pointed to innovative initiatives that catch the attention of potential ICT workers. As an example, she mentioned the financial services organization Money Forward’s Culture Hero campaign, which awards employees who epitomize the company’s inclusive culture. But Bamford warns that a good diversity, equity, and inclusion (DEI) policy is not enough to attract these in-demand talents.
“For them, it’s a base expectation, not something that will win them over,” he said. “But if you’re not providing a diverse and inclusive environment, you will lose people.”
Looking Abroad
To address the domestic talent shortage, companies such as Fujitsu Japan Limited have accelerated plans to hire non-Japanese engineering researchers in the wake of recent mass layoffs in the US tech sector.
While skepticism remains that ICT workers from abroad can thrive in Japanese workplaces, where language—and sometimes insufficient DEI culture—remains a barrier, Tsukamoto cites Mercari, Inc. as a domestic player that has found success hiring international talent.
The thriving e-commerce company began its full-scale efforts to recruit overseas talent in 2018. Today, more than 50 foreign nationals are working at Mercari’s Tokyo office, according to their FY2022 sustainability report.
Last year, the company opened a subsidiary in Bengaluru, a hub for IT companies in southern India, with the goal of recruiting IT workers. As of last July, it had attracted 45 new graduates from the Indian Institute of Technology.
The school has been a popular source of tech talent for Japanese companies such as Rakuten Group, Inc., whose Bengaluru base grew from six engineers in 2014 to more than 1,000 in 2020.
The Japanese government has responded to this trend by launching two new visa schemes in April that target highly skilled foreign workers, such as researchers and engineers, as well as graduates of highly ranked universities.
The Japan System for Special Highly Skilled Professionals, or J-Skip, visa allows researchers, engineers, and business managers to bypass the points-based system used to award visas to skilled professionals.
Meanwhile, the Japan System for Future Creation Individual, or J-Find, visa allows graduates from highly ranked universities to live in the country for up to two years while they find employment.
Evolving Workforce
The Japanese government also pledged last October to spend ¥1 trillion over the next five years on reskilling workers to address the shrinking pool of tech talent.
In January, Japanese Prime Minister Fumio Kishida said that guidelines will be drawn up in June to increase labor market flexibility to encourage workers to move to high-growth sectors.
Major companies are also contributing. Amazon Web Services Japan G.K. (AWS) has invested more than ¥1.3 trillion to help its Japanese customers modernize their IT systems and to overcome their digital skills gap through education programs, training, and certification.
“Cloud and cybersecurity skills will be the two most sought-after digital skills by Japanese employers by 2025,” said James Miller, the company’s head of public policy. “AWS has trained over 400,000 individuals in Japan with cloud skills since 2017, providing them with in-demand skills and best practices to help learners and organizations innovate in the cloud.”
Miller—an American Chamber of Commerce in Japan (ACCJ) governor who also serves as co-chair of the chamber’s Digital Transformation Committee and vice-chair of the Secure Digital Infrastructure Committee—shared an example of how AWS extended a 21st-century hand to a 19th-century company.
In 2021, the company helped Toppan Printing Co., Ltd., the 122-year-old Japanese global juggernaut, embark on a full-scale digital transformation. More than 1,600 of its employees received AWS training over three months and 1,050 pursued AWS certifications in a single year.
Room for Movement
As businesses make DX a point of emphasis, having a range of skill sets has become more important. In terms of hard skills, such as cloud and DevOps, Bamford noted that recruitment has gone from a T-shaped model, where someone has broad awareness and one deep specialization, to a V-shaped one, where the candidate’s deep specialization is complemented by medium-depth knowledge in other areas.
“The other side is that the soft skills aspect is really focused on being able to bridge global and local, while also bringing technical and people skills,” he added.
While senior managers who can lead a company’s DX efforts are in demand, companies should look inward for potential employees who they can elevate, according to Bamford. He pointed to a client that was looking for a certified ScrumMaster and, rather than hiring someone already at that level, found success in ambitious young candidates who the company could train to be certified.
“Since there will be that much more demand, and that much more shortage, the secret is to unlock the skill sets of the people you currently have. Experience is nice, but learning mindsets are even better.”
“Since there will be that much more demand, and that much more shortage, the secret is to unlock the skill sets of the people you currently have. Experience is nice, but learning mindsets are even better,” he added.
Ryo noted that this can help companies retain their technical talent. “I think the number one reason people leave an organization is because they don’t feel they have the opportunity to grow.”
Preparing Future Generations
While reskilling offers companies a path to overcoming current DX issues, Japan’s new ¥10 trillion national endowment fund to boost research at universities in strategic priorities such as artificial intelligence (AI), biotech, and quantum technology is expected to help train the next generation.
However, Matthew Wilson, dean and president of Temple University, Japan Campus, believes that changing student mindsets is arguably more important to reversing the tech talent drain.
He contrasted students in the United States, who define their future goals by jobs they want to pursue, with Japanese students, who aspire to work for specific companies.
“If your goal is to work at a company, your pathway is going to be a lot different,” he said, noting that the practice of job rotations at Japanese companies, in which employees are transferred from department to department every few years, provides fewer incentives to focus on specific fields.
Wilson also noted that Japan’s public education system is “very conservative, which is difficult to change,” but is optimistic that the government’s push for DX and the advent of new AI technologies, such as ChatGPT, the conversational large language model developed by OpenAI, will accelerate change.
“It’s going to force people to educate differently and to assess differently,” Wilson said. “The point isn’t catching somebody who just did their essay with ChatGPT. Rather, it’s how to educate somebody so they have the skills and the knowledge they’re going to need for a job five years down the road.”
Unified Response
Steps have been taken to reshape the country’s education system with last year’s release of the Roadmap on the Utilization of Data in Education. A joint statement issued by the Digital Agency, MIC, METI, and the Ministry of Education, Culture, Sports, Science and Technology states that, by 2030, the government aims to create “a society where anyone can learn in their own way, anytime, anywhere, with anyone.”
While Wilson recalls similar government ambitions, such as former Japanese Prime Minister Yoshiro Mori’s “one student, one computer” initiative more than two decades ago, which had little success, he is optimistic about the Digital Agency and Minister Taro Kono, whom he praises for being “energetic and constantly finding ways to challenge processes and procedures.”
But he also noted that, while things are starting to move, “it’s going to take a while to get Japan to the digital utopia that they’ve been talking about for 25 years.”
Big Moves Moving
Transformations take time. Reaping rewards can take longer. For Japan, shedding analog processes is critical for future prosperity. The ACCJ is bringing together the broad expertise of its membership to reassess the JDA 2030 and assist with the push for digital transformation.
Two years into the JDA 2030, ACCJ leaders take stock of progress.
Transformations take time. Reaping rewards can take longer. For Japan, shedding analog processes is critical for future prosperity, and the American Chamber of Commerce in Japan (ACCJ) is bringing together the broad expertise and experience of its membership to assist with the push for digital transformation (DX).
In early 2021, the ACCJ unveiled a comprehensive white paper entitled Japan Digital Agenda 2030 (JDA 2030) that outlined 11 big moves which could position the country as a global leader as we dive deeper into the 21st century. Produced together with McKinsey & Company, the JDA 2030 presents technology use cases and describes how Japan could realize a transformation that would put the world’s third-largest economy on equal footing with leading digital nations.
These measures to bolster DX in Japan call for concerted steps by major industries and stakeholders in areas such as digital talent, industry transformation, digital government, and economic renewal. And in the two years since the paper was published, the need for cross-industry collaboration to make many of the JDA 2030’s big moves a reality has become increasingly clear.
An Evolving Proposition
What has also become clear is that the pace at which digital everything is infiltrating all aspects of business and society calls for a reassessment of the JDA 2030. The ACCJ’s new Digital Forum, confirmed by the Board of Governors in April and led by Chair Mitsuhiko Ida, along with Vice-Chairs Kristopher Tate and Scott Warren, will be leading this task, working with the various digital-related committees to coordinate the chamber’s voice and position on DX.
And with DX impacting all organizations, not just those in technology fields, everyone has a role to play.
“The question is swiftly becoming, Is there such a thing as a non-tech field?” Warren told The ACCJ Journal. “We are seeing technology being applied in almost every business. I think the application of technology is almost too alluring—and necessary to keeping a competitive edge—to be ignored.”
ACCJ Digital Transformation Committee Co-Chair Jim Weisser agrees. “All businesses are digital or have a DX component. Trying to figure out which piece to transform—and how to do it—is a problem for all companies.”
“All businesses are digital or have a DX component. Trying to figure out which piece to transform—and how to do it—is a problem for all companies.”
Fellow co-chair and ACCJ Governor James Miller added: “The most important thing for members to keep in mind is the cross-sectional view versus the deep dives. There are sets of concerns that are technology specific, but we are continuing to focus on sharing what sets of issues business leaders should prioritize that are cross-sectional.”
Already, the chamber is looking at a variety of mechanisms to bring together the insights from the JDA 2030—and those continually being developed by the ACCJ’s committees—to refine its position and recommendations to provide the best guidance in a rapidly changing environment. This effort, supported by the work of the digital committees on technology-specific issues, is focused on teasing out the common positions across the broad range of committees to bring the whole chamber to bear on DX.
A question about the big moves outlined in the JDA 2030 is whether they might require a longer timeline to be realized than the seven years that remain until the original target date. This has spurred an effort to learn from the chamber’s landmark 2009 white paper Achieving the Full Potential of the Internet Economy in Japan, how progress was achieved, or efforts stalled, and how the digital agenda itself can evolve.
While a lack of dialogue or substantive business input may have slowed progress, the Great East Japan Earthquake and Tsunami of March 11, 2011, reignited interest in resilience. Similarly, former Japanese Prime Minister Shinzo Abe’s focus on the role of data at the 2019 World Economic Forum Annual Meeting in Davos has since proved to be a major lift for the JDA 2030.
Data, Trust, and Talent
At the center of Abe’s Davos proposal was Data-Free Flow with Trust (DFFT), something which Japan and its allies have struggled to define in the years since, said Warren, who is also co-chair of the ACCJ Legal Services and IP Committee as well as vice-chair of the Information, Communications, and Technology Committee.
“How we achieve [DFFT] will be one of the main topics discussed during the G7 conference. The real challenge, I think, is that the definition cannot be static, as it is very dependent on the type of data—critical infrastructure data versus other data—and the question of how much you trust the receiving entity and country. I think the true answer has to take those factors into account.”
Ida, an ACCJ governor, noted that the establishment of a new organization to promote DFFT was agreed at the G7 Digital Ministerial Meeting held in Gunma Prefecture in April. “For this, governments want private sectors to share our experiences, needs, and suggestions for policymaking. This is just one case in which the ACCJ can contribute,” he said.
Another area of great importance to successful DX is the acquisition and training of digital talent. But for a company to build a deep bench of world-class talent, with the digital know-how that is increasingly critical to success, takes time, Weisser said.
Megumi Tsukamoto, a vice-chair of the ACCJ Task Force on Economic Security, said that it is likely to take five years or so for Japanese companies to establish their digital bench once they recognize the need and begin fostering this talent. First, they must overcome major challenges in their operating cultures to provide levels of compensation expected by these professionals.
She also notes that opportunities are emerging that might enable Japanese companies and IT vendors to build their digital talent sooner. One is the sudden availability of personnel following the recent restructuring in the IT sector, both in Japan and in key markets overseas. “They’ll do it because, without IT talent, it is very difficult to compete with other global companies. It is an urgent issue,” Tsukamoto emphasized.
Companies are also increasingly aware of the business opportunities digital can drive, and are developing their people to realize them. Tsukamoto points to one Japanese service provider that is working to create tools, some powered by artificial intelligence, to help staff who lack digital skills. By pooling specialists in planning, user interface design, and the core product—and combining these with dedicated IT support—they are able to develop in-house software that can enable service staff to focus on the highest value tasks while leaving the software to automate others. She also mentioned a Japanese manufacturer that is already pairing robots with its production line workers to realize mutual benefits.
Now Is the Time
New tools such as these show that technology concerns are not the biggest obstacle. “Oftentimes, it is the business thinking that we should be focused on,” said Miller. “A lot of tools can be used to reduce risk and mitigate concerns in a way that was not conceivable a decade ago.”
Japan also brings to the table a high level of competency in science, technology, engineering, and mathematics, or STEM disciplines, that enables it to leverage a strong legacy of engineering capabilities. “Combined with being the world’s third-largest economy, the level of scale and scope of opportunities seen in Japan are really unrivaled,” added Miller.
“Combined with being the world’s third-largest economy, the level of scale and scope of opportunities seen in Japan are really unrivaled.”
These insights are the basis for plans to coordinate DX leaders across the ACCJ’s various digital committees. The goal is to
understand the high-level points and the depth of topics, ranging from talent acquisition to cybersecurity.
“Now is the time to work together,” Miller concluded. “We’re seeing dramatic changes in Japanese policy and company environment that we haven’t seen for 30 years. We are seeing a lot more combined interest in [the US–Japan] partnership.”
The ACCJ, with its diverse and multinational membership, is one of the few organizations that can pull such voices together and bring industry views to both the US and Japanese governments, noted Ida. “We can partner with both governments to support their policymaking by providing our experiences, needs, and technical assistance.”
Warren invites all ACCJ members to get involved in shaping the chamber’s digital advocacy.
“The ACCJ has consistently espoused, for years, that whatever new policies are created in Japan must be fairly implemented across both domestic and international companies,” he said. “As for specific policies to implement related to digital transformation, the ACCJ is in the process of gathering those. If you have ones you think important, please submit them to one of the many digital policy committees or to your committee leadership.”
Have an idea? Get involved!
The ACCJ has a range of committees working on leadership and advocacy for Japan’s DX journey:
Digital Transformation • Digital Economy Task Force on Economic Security • Secure Digital Infrastructure • Information, Communications, and Technology • Healthcare • and many more
Cracking the Code
As digital transformation touches every aspect of how we work and communicate, businesses face ever more complex challenges. The evolution of cybersecurity means that companies must rethink how they hire for this critical task. Robert Half shares how to secure the best cybersecurity talent.
Recruiter Robert Half shares how to find the best cybersecurity talent.
From left: Robert Half cybersecurity team members Fabrizio Fumagalli, Steven Li, Kani Taeng, and Naoto Hamada
As digital transformation (DX) touches every aspect of how we work and communicate, businesses face ever more complex challenges when it comes to protecting data—whether it is their own or that of customers. The evolution of cybersecurity means that companies must rethink how they hire for this critical task.
Steven Li, senior division director for cybersecurity at recruitment company Robert Half, told The ACCJ Journal that they see a lot of companies going through digital or IT transformations to shared service models, including for security.
“One of the challenges with security is that it’s all about data, and it’s all about being able to see your entire ecosystem or environment using a single source of truth or a single tool,” he said. “And a problem you may face is how to bring different business units that you’ve acquired onto a common platform for security operations and vulnerability management, so that when someone asks, ‘Are we impacted by this incident?’ you can answer with a degree of confidence.”
Robert Half advises clients on how to do just that and helps them find the right people to lead that transformation.
Expertise Matters
From a people perspective, previously siloed teams are being consolidated on a group level to create a centralized point of contact for cybersecurity that then provides support to each business unit, Li explained. Instead of outsourcing technical tasks to consultants, companies are now looking to hire specialists for their internal teams. But with much of this talent coming from outside Japan, domestic salaries are an obstacle.
“Employees here in Japan are typically rewarded based on tenure and age instead of merit and skill,” he noted. “To get around this, some companies have started to offer contracting solutions. They’ll say, let’s do a fixed-term contract. And with this fixed-term contract, we can step outside the bounds of our salary structure and give the specialist what the [global] market is paying, and a little bit more.”
This is important as there is an estimated shortfall of 190,000 cybersecurity professionals in Japan.
“Our clients are sharing that they need people who are application security engineers and can dynamically test the code.”
“Japanese companies are not used to hiring mid-career security professionals. They are used to hiring graduates, so to bring in someone mid-career, they don’t know how to do it, where to find them,” Li explained.
“Good cybersecurity engineers don’t typically fit the traditional model of an IT person. They may not have finished university, but they are adept at problem-solving and seeing patterns that other people might miss. We’ve placed people like this, and our clients have been absolutely happy with them,” he added.
Recruiting Manager for Cybersecurity Naoto Hamada shared an example of how Robert Half successfully placed a candidate who made a big difference for their client. But to do so, they had to overcome a challenge common in Japan: hesitation to change jobs.
“It was for a key project, and closing the role was a high priority. However, it’s challenging to find this talent in Japan,” Hamada explained. “We were able to find a match, and he received a competitive offer. But just one day before the deadline, on a weekend, he messaged me and said, ‘I can’t take this.’”
The problem wasn’t the offer but that he felt sympathetic towards his current manager should he leave.
“After receiving the message, he asked me to come meet at his station in person. I outlined the benefits of joining this international company and how it would provide him the career growth opportunities in line with his goals,” Hamada explained. “In the end, the key element was that we helped him visualize his priorities, then compare them to his current company. Based on this exchange, he decided to sign the offer and is now a key member in the newly created incident response team at his new company.”
Working hands-on in this way is at the core of Robert Half’s approach to recruitment. An important part of that are cyber risk meetups, which they host to bring together security professionals to share information and experiences which can help bridge the gap in cyber skills. A recent senior leaders’ meetup at Deloitte focused on ransomware resilience, and a public security meetup at Microsoft focused on software supply chain security.
“If we all share best ideas, best practices, and experiences, and implement those, perhaps we can improve cybersecurity maturity in Japan,” Li said.
Changing Regulations
Another thing to consider is the impact of changing regulations. Fabrizio Fumagalli, Robert Half’s recruiting associate director for cybersecurity, pointed out changes to ISO 27001, an international standard for information security management systems.
“This was updated in 2022, and companies have three years to comply,” Fumagalli said. “There are a few notable requirements on code security and the code supply chain. Companies need to be extremely careful about what’s in their code and conduct appropriate audits to assess where vulnerabilities may be.”
On average, about 80 percent of the code in a typical application is open source, Fumagalli noted, so it can be difficult to know what vulnerabilities may be hiding there. As a result, companies will need people in security who are proficient in software development.
“Instead of relying on documents from an external vendor, companies need a specialist who can check the code to ensure it is secure. Teaching security is easier than teaching the development side, so that is where companies’ priorities should be,” he added.
Specific to Japan, he said, is the need for mid-career cybersecurity talent. “You cannot randomly reassign, or do rotations, as most Japanese companies do. Due to the specific set of skills needed for the role, there is an urgent need for individuals who are experts in cybersecurity.”
Li added: “Our clients are sharing that they need people who are application security engineers and can dynamically test the code, play around with it, see if they can break it. Or do static analysis by reading the code itself and figuring out where the logic problems are. These skills are in extremely high demand.”
Partner for Success and Security
In closing, Li said that Robert Half is working to change the perception of recruitment in Japan and to help clients look beyond the numbers and the next quarter. If you are reassessing your cybersecurity, Li, Fumagalli, Hamada, Taeng, and the Robert Half team are ready to expand upon this approach and partner with you to build the best teams for today and the future.
Register now to learn, connect, and get inspired by Robert Half Japan networking events: roberthalf.jp
Executive Upgrade
The need for good leadership has never been more pronounced. It impacts hiring, retention, employee engagement, and productivity. And its importance in landing complicated organizational shifts through successful change management is highly visible in the market right now. Half Managing Directors for Robert Half’s Executive Search in Japan Nick Scheele and Andrew Sipus share how to find the right leaders.
Why the right leader matters … and where to find them
Presented in partnership with Robert Half • Photos by Kayo Yamawaki
The need for good leadership has never been more pronounced. It impacts hiring, retention, employee engagement, and productivity. And its importance in landing complicated organizational shifts through successful change management is highly visible in the market right now, said Nick Scheele, managing director of Robert Half’s Executive Search division.
“What we have observed over the past several years is that many global organizations—and this includes both Japanese and foreign—have been making a concerted effort to upgrade their leadership capability,” he added.
With more than 70 years of history, plus 300 locations and some 14,000 employees around the world, Robert Half has a long and deep view of the talent market. “Simply put, we have a global network that’s unlike any other and spans nearly a century of relationships, which we can leverage,” Scheele explained.
Robert Half provides contract and permanent placement solutions for finance, accounting, technology, marketing, and HR in Japan. Protiviti, a fully owned subsidiary of Robert Half, offers internal audit, risk, business, and technology consulting solutions and we regularly partner to offer clients a full suite of services.
What powers it all is their global network. Fellow Executive Search Managing Director Andrew Sipus said this pool of diverse expertise and experience creates synergy between Japan and the United States, as well as the rest of the world, when it comes to Executive Search.
“We are experts in providing bespoke retained search advisory services for finance, accounting, technology, marketing, and HR sectors, with more than 100 Executive Search colleagues around the world who are just a phone call away,” Sipus explained. “If we look to the United States as an example, our Executive Search division received the Forbes 2022 accolade as America’s Best Executive Recruiting Firm, which is certainly a testament to the quality of relationships we have at our disposal … we can easily tap into them, their resources, and their markets to understand the latest market conditions and trends in whatever area we need to better understand.”
“Globally, Robert Half and Protiviti have been named by the Human Rights Campaign Foundation for five consecutive years as one of the best places to work for LGBTQ+ equality.”
Robert Half Japan regularly connects with peers from North and South America, Europe, the Middle East, and the Asia-Pacific region to gain the latest market insights. This helps them successfully fill difficult searches that require unique resources and expertise.
Such searches can arise as Japanese companies look to expand their diversity, equity, and inclusion (DEI) as well as remain competitive in areas evolving beyond traditional approaches to management.
Sipus recalls one such case.
“We scanned the market many times over and found that what our client was looking for simply didn’t exist in Japan; or, if it did, it was untouchable,” he explained. “There were no more than a handful of candidates, and even then, they had only 20–30 percent of what the client required. What that meant for us is that we had to be very creative. We had to do a lot of coaching with the client, and we had to look outside Japan. Through this rigorous process, we were able to identify Japanese talent located overseas, and the client was supportive of relocating them back to Japan.”
Nick Scheele (left) and Andrew Sipus
Robert Half has also helped companies factor DEI into their Executive Search process and consider non-traditional candidates.
“In the case of Japanese companies, we’ve shown them what other organizations are doing and how those organizations are benefiting from more inclusive practices,” explained Sipus. “This could mean highlighting impacts on engagement, creativity, employer branding, and how that leads to gains in productivity and overall business health. We can use tools such as market maps, which give a more accurate sense of the distribution of talent, to counter or confirm the assumption that there are no solutions in the market. This helps our clients identify opportunities where they can make strategic hires using DEI and relevant data sets as a consideration.”
Robert Half itself is awash in diversity. The nearly 100 employees in the Japan office represent 22 nationalities. And globally, Robert Half and Protiviti have been named by the Human Rights Campaign Foundation for five consecutive years as one of the best places to work for LGBTQ+ equality. They have also earned a perfect score on the foundation’s Corporate Equality Index, a national benchmark for US businesses’ dedication to LGBTQ+ equality in the workplace. They have also been selected for the Bloomberg Gender-Equality Index for the fourth consecutive year, for their commitment to promoting equality, creating opportunities for women to succeed, and providing a culture that supports diversity.
Is Robert Half’s Executive Search division the right choice for you?
Scheele encourages those considering hiring leadership talent to think about the level of engagement they’d like, the level of services required, and what it is going to take to deliver the talent sought. “If you need a bespoke, dedicated project team that won’t simply present you with profiles but will manage the entire process and fully represent your interests as an extension of your talent acquisition and employer branding, then Robert Half’s Executive Search division is an ideal fit.
The Great Resignation
The pandemic has brought tumultuous change to the workplace worldwide, and in the United States millions of employees have decided to quit or change jobs in what has been dubbed The Great Resignation. Could we see a similar upheaval in Japan?
Could the change Covid-19 sparked in the United States occur in Japan?
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The pandemic has brought tumultuous change to the workplace worldwide, and in the United States millions of employees have decided to quit or change jobs in what has been dubbed The Great Resignation. Could we see a similar upheaval in Japan?
In several ways, we already are—although the changes may not be as dramatic or visible, for social, financial, and cultural reasons. Japanese workers aren’t quitting and changing their jobs en masse, but we are seeing more willingness to jump ship—particularly among the younger generation—as well as shifting priorities and expectations about one’s job, career, and employer that will probably transform Japan’s labor market, recruiters and experts have told The ACCJ Journal.
The Great Reflection
Suddenly finding themselves working from home, with extra time on their hands, many workers have had the mental space to think about their careers and broader purpose in life—something they often had been too busy to do previously. Some realized they weren’t satisfied with their jobs and work–life balance, and they began to explore new paths, such as volunteering, picking up side gigs, or changing jobs entirely. That’s a big step in Japan.
“Everybody is reassessing their values,” said Jeremy Sampson, managing director at recruiting company Robert Walters Japan K.K., which connects English-speaking candidates with foreign-affiliated or Japanese companies. “They’re reassessing their lives, their careers, and really wondering if they’re happy with what they’re doing.”
“It’s like stepping off the treadmill,” offered Simon Jelfs, managing director at FocusCore Group KK, which specializes in bilingual recruitment for US and European companies. “People have had a chance to step back, think, and reassess.”
Covid-19 has changed people’s priorities in evaluating a job. In a survey conducted by Robert Walters earlier this year, candidates said their top value was doing challenging and interesting work, followed by inspiring colleagues, corporate culture, and flexible working. Job security and excellent compensation were ranked sixth and seventh—well below where they had been in previous surveys.
“We’re seeing people wanting to change jobs for reasons around looking for something more fulfilling,” Sampson said. “Or because they realize life is short, and that they want to be doing something that makes them happy.”
Jumping off Kiyomizu
But changing jobs is hard in Japan. If you have special skills, such as English ability, as is the case with jobseekers being placed through FocusCore and Robert Walters, there is strong demand. But for most Japanese, switching jobs can be very risky—particularly for those in their forties, fifties, or sixties who have stable jobs and good salaries at major companies, and families who depend on them.
“Japan is less flexible in terms of your trajectory; you don’t have a lot of options to make mistakes and then pick it up and fix it,” explained Robin O’Day, a professor of anthropology at the University of North Georgia who has studied Japan’s youth culture. “If it doesn’t work out, it’s on you because you took a gamble.” In a business culture that values loyalty and is only gradually recognizing merit as a key hiring factor, there’s also not much professional incentive for mid-career employees to change jobs. In the United States and Europe, many who switch jobs can obtain higher salaries or promotions, but that’s usually not the case in Japan, according to Akie Nakamura, chief researcher at Rengo-RIALS. Some even see their salaries drop.
Surveys by the Recruit Works Institute show that, compared with workers in the United States, China, France, and Denmark, those in Japan express greater overall dissatisfaction with their jobs. But the lack of mobility discourages many from doing anything about it. “Changing jobs requires a lot of courage in Japan,” she remarked. “Sometimes it’s likened to jumping off Kiyomizu Temple’s high platform.”
The number of workers who change jobs has been rising in recent years, but fell over the past two years. During the pandemic, the figure fell to 2.9 million in 2021 from 3.5 million in 2019, government data shows. Still, those saying they would like to change jobs has continued to rise steadily, having reached 8.9 million in 2021, according to the government’s labor data, with those aged between 25 and 34 accounting for the biggest group, at 2.3 million. And a survey by Robert Walters of 800 employees across various industries registered with the recruiter shows that 60 percent of respondents were looking to change jobs over the next 12 months.
Generation Gap
Changing jobs is less risky—and a bit more common—among Japanese in their twenties and thirties. For these people, there is less to lose potentially in terms of salary, and more options from which to choose. Companies are also more likely to hire them. And increasingly, if young people are unhappy with their jobs or feel they don’t have much of a future there, they will look elsewhere.
Many in the younger generation have seen the often-grueling jobs their fathers (in most cases) held and aren’t necessarily enthused by the idea of devoting their entire career to a company, Professor O’Day said. They are thinking more in terms of how the company can benefit their career objectives, not the other way around, he and other experts agreed.
Some companies are shifting from the traditional organizational model, in which workers function as members contributing to the company’s overarching mission, to a self-directed model that gives employees more freedom to pursue their ideas and offers choices within the company, experts explained.
Over the past few years, we’ve been seeing some twenty-somethings at big brand-name companies switch jobs, which was virtually unheard of before, Nakamura noted. The top two reasons are:
- Fear that they won’t be able to do interesting work if they remain where they are
- A desire to work at companies with more growth opportunities
And research conducted by online recruiting agency en Japan Inc. shows that a growing portion of these young job-changers at big companies are going to startups, the ratio having risen to more than 20 percent last year.
Sampson sees that among his clients as well. “Younger people want to take control of their lives more,” he said. “They have more of an appetite for startup-type businesses, where people can take the initiative, are more responsible for their own actions and output, and are not just taking orders from above.”
Flexibility Assumed
Jobseekers’ demands and expectations surrounding job flexibility are also changing. The first question that candidates ask when considering a new opportunity is not about salary but work arrangements, Sampson shared. “Pre-pandemic, flexibility around work was a benefit that companies sold to attract talent, whereas now it’s a must-have,” he said. “And if you’re not [offering it], you’re basically deterring talent.”
While many companies still place value on employees coming into the office, partly to build corporate culture and network with colleagues, jobseekers are gravitating to businesses that offer a hybrid work style that allows them to work from home at least some of the time. After tasting work from home, some will accept only jobs that are 100-percent remote, FocusCore Group’s Jelfs noted.
Teleworking has been especially welcomed by working mothers, who say they are much better able to juggle their family duties. One single mother, whom Jelfs knows, loves working from home so much that, if her company required her to start coming back into the office, she would find another job that allows fully remote work.
These changing dynamics have driven another change: decentralization. Some people who live and work in Tokyo are moving to outlying areas—sometimes quite a distance away—either maintaining two homes or completely uprooting themselves from the city. One of Jelfs’s candidates moved from central Tokyo to Tsukuba, Ibaraki Prefecture, and once there switched to a local job. Others have moved to the beach town of Hayama, south of Yokohama, or Karuizawa, in the mountains of Nagano Prefecture, he said.
Covid-19 prompted Tokyo’s population to decline to just under 14 million last year, the first drop since 1996. If the trend continues, this could contribute to the spreading out of Japan’s population from urban centers, a long-time government goal.
“This is a shock to the system that Japan really needed to initiate this sort of change,” Sampson stated. “Even us as a company, we talked about more flexibility for years, but actually doing it was painful to think about. But when we ripped off the Band-Aid and did it, it actually became quite simple. Everyone adapted quite easily, and I think it’s benefited many people.”
More Stratification
However, this greater freedom and flexibility has not extended to Japan’s entire labor market. It is concentrated in white-collar workers with regular, full-time jobs—a steadily declining breed in Japan. Workers in blue-collar, delivery, and factory jobs that cannot be done from home, or at their convenience, have not seen this same sort of flexibility as a result of Covid-19, O’Day pointed out.
In fact, for some of them, work and life have become harder. Freelancers in Japan—mostly self-employed people with specific skills, such as photography, editing, or teaching music—have seen their work and income decline during the pandemic. And when the government offered financial aid to workers who had lost income, freelancers received less help than full-time employees. “To freelancers, that looked like a value judgment,” said O’Day.
The job market is also not very friendly toward them. When freelancers apply for full-time jobs, “many companies will discriminate against them—they think you’re somehow tainted or there’s something wrong with you,” O’Day added.
So, in some ways, Covid-19 has widened gaps in Japan’s labor market, where big businesses are increasingly relying on contract or part-time workers to cut costs. That’s given greater flexibility to companies, but not to contract workers, who have fewer benefits and less job security than those in the upper echelons of the labor market.
Shared Values
Covid-19 has also enhanced the desire among younger workers, including some college students, to join a company that shares their values and is doing something to contribute to society, recruiters said.
“Younger candidates are asking of companies, ‘What are they doing in terms of sustainability? What are they doing for the local community?’” explained Jelfs, who has been working in Japan for 24 years. “Ten years ago, it would have been more about salary and if it’s a prestigious company.”
Jobseekers in their twenties and thirties also place a higher priority on diversity and inclusion, and want to know how committed companies are to that, Sampson remarked. Likewise, they also are more concerned about whether companies are proactively adopting environment, sustainability, and governance standards, he added.
Businesses that aren’t able to offer more flexible work style policies or give clear answers to questions about their values, diversity goals, and contributions to society, may get shunned, recruiters warned. A Robert Walters survey shows that half the respondents would reject a job offer if the company’s values didn’t align with their own.
With more people working remotely, the entire job search process has become easier, recruiters said. They can search for openings online in the privacy of their homes and handle multiple job interviews in a single afternoon. They don’t necessarily need to commit a big chunk of time to visiting various companies’ downtown offices over several days for interviews, although some employers still want to meet candidates in person, which recruiters say is a good idea.
Talent War
All these changing dynamics are coming amid perhaps one of the tightest job markets ever in Japan, as the pool of workers contracts amid an aging and shrinking population. Companies are scrambling to get the best talent.
Even before the pandemic, capable candidates—from good schools, or with a few years’ experience in a desired field—who were looking to change jobs would receive many offers, Nakamura explained. “In the past, major companies could easily get graduates from top universities, but that’s no longer a given.”
Also, Japan’s tight immigration rules make it difficult for foreign workers to enter—a flow that has virtually ground to a halt during the pandemic.
“Japan is facing the greatest talent shortage, really, in its history, and it’s not going away with the shrinking population,” Sampson added. “There really needs to be a more streamlined process to accept and welcome foreign talent.”
Intense competition has emerged for workers with specific, highly sought-after skills, such as English ability or computer programming skills, recruiters said. Tech startups are appearing left and right, and established companies also need engineers to help them digitally transform their operations, so for them it’s a candidates’ market.
“Companies are looking for Japanese candidates who are bilingual, who have a stable background, a solid record of achievements in Japan, and are not a job-hopper. Once you factor all that in, supply is tight,” Jelfs explained. “Those kinds of candidates have three to five offers they can choose from.”
Businesses have become much more aggressive in trying to retain employees by making counteroffers in the form of promotions, transfers, or pay increases, according to Sampson. “Companies are aware that it’s far more difficult and expensive to replace somebody than it is to entice them to stay.”
Japan tends to change most dramatically in response to external shocks, and Covid-19 has proved to be a powerful catalyst, setting in motion changes that will probably permanently alter employee behavior, corporate practices, and even Japan’s business culture. “This is the beginning of what will be a long-term, big change in Japan for sure,” Sampson said.
Stepping Up for Change
The global employment landscape has shifted dramatically during the past two years, with the coronavirus pandemic encouraging employers to be more flexible than ever in their arrangements with staff. Working from home, for example—virtually unthinkable for many companies not long ago—has quickly become perfectly acceptable and, often, expected. While Japan has, in the past, been criticized for failing to keep up with changes in the job market, there are plenty of organizations here that have embraced different approaches to work.
Companies move quickly as talent expectations evolve
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The global employment landscape has shifted dramatically during the past two years, with the coronavirus pandemic encouraging employers to be more flexible than ever in their arrangements with staff. Working from home, for example—virtually unthinkable for many companies not long ago—has quickly become perfectly acceptable and, often, expected.
Employees, for the large part, have seized upon these opportunities to improve their work–life balance, escape the drudgery of the commute, and spend more time with their families. And now that the genie is out of the bottle, it will be very difficult for many people to return to previously accepted ways of working—at least on an all-day-every-day basis.
Change Not Optional
While Japan has, in the past, been criticized for failing to keep up with changes in the job market, there are plenty of organizations here that have embraced different approaches to work. Human resources (HR) companies say they must if they want to continue to attract the best and brightest talent, with a dire shortage of candidates in many sectors giving skilled workers the luxury of choosing where they might go next.
Well before the pandemic, Japan already had been experiencing a worsening labor shortage, pointed out Bryce Conlan, president of Nagoya-based H&R Consultants K.K., which specializes in foreign staffing solutions. This shortage could be seen in a broad range of placements, from convenience store jobs to blue-collar positions to highly skilled artificial intelligence or information technology (IT) experts. The situation had been compounded by salaries significantly lower than those in the United States and even elsewhere in Asia.
“Another serious issue was the lack of innovation and flexibility in HR policies,” said Conlan. “Or, rather, a lack of willingness to change old habits and cultures, where long hours were the norm and the evaluation system was built around time spent rather than results achieved. The need to be seen to be working, rather than the need to achieve results.”
Accelerated Adaptation
There were signs of change before the pandemic. More companies had been introducing cultural and language training, and there was a new willingness to hire talent from abroad. But things have changed rapidly since the first cases of Covid-19 were reported in Japan in early 2020.
“One positive thing that has come out of the pandemic for Japan is an acceptance of the concept of remote work or working from home,” Conlan told The ACCJ Journal. “There has been more change in the way companies operate and people work over the past 24 months than over the past 10 years here in Japan. So many processes and old ways have been transformed, with things such as digital signatures now being more commonly accepted—reducing the need for faxes—and a greater reliance on email and document-sharing tools.
“This has allowed a totally new way of working and, I believe, has brought a huge increase in efficiency,” he said. “We have one client who has well over 60 IT engineers working from India, purely because they have not been able to get visas to enter Japan to come and work. They are now working full time remotely from India, something that would have been unheard of five years ago.”
Nancy Ngou, an associate partner with EY Strategy and Consulting Co., Ltd., shared that the pandemic has hastened changes that already had been taking place at some companies. These include:
- Changes to develop and retain younger employees who prioritize flexibility
- Removal of barriers to women’s advancement in the workplace
- Evolving workplace cultures to embrace change (e.g., inclusion, digitalization, global mindset)
And while some previously had been hesitant to take advantage of those changes, such as flexibility—managers because they didn’t believe it was feasible and employees out of fear such changes would negatively impact their careers—these perceptions began to erode when people were forced to work remotely, she said.
“Businesses are stepping up implementation of their globalization and digitalization strategies, and employees’ expectations of their work have changed,” she explained. “Employees have had time to reflect on their personal priorities and reevaluate expectations. They feel more emboldened to leave what they viewed as simply a job they did, for a more purposeful career or a job they want to do. Employees—and not just the younger generation or working parents—are seeking sustained flexibility, purpose, and balance.
“Both the business and employee factors are forcing an acceleration of many changes HR leaders sought before, but with the added focus on employee retention and recruiting,” she added.
Embrace Empowerment
The pandemic has, nevertheless, compounded what was already a candidate-short market, according to Charles Breen, associate director of recruitment company SThree K.K., which specializes in science, technology, engineering, and mathematics—or STEM—fields.
“Employees have always wanted interesting and challenging work with growth opportunities, but that’s something I see people focusing on more nowadays,” he explained. “With innovation happening faster across all forms of technology—whether that is engineering, IT, or biotechnology—leaders in their field want to work on cutting-edge projects.
“Work–life balance has shifted in definition for progressive companies, including my own,” he added. “With employees having more autonomy when it comes to scheduling their work, they can better engage more fully in all aspects of their lives. Companies that embrace this empowerment will attract the top talent in their field.”
Pay is as important as before and has not lost its relevance in the hiring process, Breen said. “But for the best employees, the company’s offering must go much further than just money. Top talent looks at potential growth, for the individual as well as the company, and whether their own values are aligned with those of that employer.”
Once in a company, every employee has a “different set of needs and values,” Breen added, noting that it us up to the employer to support those goals. But, he cautions, gimmicks such as beanbags and free food in the office are not very high on a potential new hire’s list of priorities.
Hire and Retain
Sean Lindley, business operations manager for Titan Consulting K.K., said the job market globally has become even tighter, as many of the best workers in their fields are already employed, are happy in their positions, and are not looking for a new job. The challenge for managers, therefore, is making sure that the person remains with the company.
“It is very clear from our experience that any company in Japan, when presented with a strong candidate, really should grab him or her, because the shortage of talent is so acute that any hesitation means that person will be gone,” he shared. “An employer needs to be agile and recognize the best people. That is where a trusted human resources partner is critical.”
Once aboard, an employee who feels valued, who knows that the company is growing and moving in the right direction, and who has “regular, meaningful conversations” with managers “about where his or her career is going,” is less likely to be looking to move, he added.
“The little things about a company’s culture and values make a big difference,” Lindley remarked. “People leave for reasons that we call the two Cs: compensation and culture. Compensation is easy to deal with, but it’s very important that a company work hard to ensure a good workplace culture.”
Driving D&I
There is also an increasing emphasis on diversity and inclusion (D&I) in hiring, said Sophia Plessier, business development manager for the company. In focus are concerns such as ensuring gender equality in the workplace, paternity leave, time off for people caring for elderly relatives, support for families or dependents, and identical opportunities for staff, regardless of race, religion, cultural background, or sexual orientation.
Titan Consulting recently launched a new service—its Spotlight Package—designed specifically to meet the growing demand for more women in senior management positions. New legislation in the United States mandates that 30 percent of a board be made up of women. Companies that have let diversity slide are now desperately seeking capable candidates, Plessier noted.
“The Japanese government did set a target of 30 percent of managers being female by 2020, but even now it is only 8 percent,” she explained. “That is disappointing, but we do see a changing mindset and expect demand for high-quality female candidates to rise.”
H&R Consultants’ Conlan agrees that a company’s requirements can often align very closely with those of potential candidates, and this must be emphasized to attract the best talent.
“Companies want innovation and efficiency,” he said. “To compete in the global market, not just in sales but in the ability to attract and secure the right talent, companies are realizing that they need to change. This means that what they expect from their employees is changing.
“Companies are also looking for diversity in their staff: different cultures, education, and languages bring a much wider variety of innovation, ideas, and thinking.” But, he added, they will also need experts in this area to manage a new, diverse workforce.
“And employees—especially the younger generation and those with an international mindset or foreign language ability, with experience studying or working abroad—have seen how other cultures work,” he added. “They have seen the opportunities and the diversity that exists.”
No Going Back
Asked what employees expect of their company today, Conlan counted off their priorities. As well as work–life balance and development opportunities, they do not want to see a rollback of the workplace flexibility that has been a byproduct of the pandemic. They also want their employer to commit to a strong environmental, social, and governance presence, and they want talent mobility as well as flexibility, and evidence of innovation.
With all those promises in place, he said, why would a valued and valuable member of staff look for opportunities elsewhere?
Life Beyond Covid-19
Since the first case of Covid-19 was confirmed in Japan in January 2020, the world as we know it has changed in many ways—not least of which has been a transformation in how we study, work, and socialize. In light of this, The ACCJ Journal spoke to professionals in business and education, as well as soon-to-be-graduates, to learn about the challenges they’ve faced—and the solutions they’ve implemented—in a period defined by the pandemic.
Professionals, graduates, and new hires share how workplace expectations have changed
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Since the first case of Covid-19 was confirmed in Japan in January 2020, the world as we know it has changed in many ways—not least of which has been a transformation in how we study, work, and socialize.
In light of this, The ACCJ Journal spoke to professionals in business and education, as well as soon-to-be-graduates, to learn about the challenges they’ve faced—and the solutions they’ve implemented—in a period defined by the pandemic.
They said work and study will not return to pre-pandemic methods, and agreed that employees and students in the so-called new normal era have different expectations than before about the future of work and education.
Flexibility Is Expected
For universities, the pandemic has led to changes in how they deliver courses and engage with students.
Matthew Wilson, dean of Temple University, Japan Campus, said that before the pandemic “remote work was not an option,” because all instruction was carried out in person. That has changed. Nationwide, social distancing rules encourage online instruction. In some cases, at Temple, teaching has been conducted from offices repurposed for remote lecturing, with some students—especially those overseas—being restricted to remote participation.
How has the university implemented the new rules? They began by identifying which departments could work remotely and which were better suited to on-campus work.
They settled on a hybrid strategic plan according to which some staff and faculty work from home while others remain on campus, depending on the needs of particular departments. Students have been studying exclusively from home, while others have been in the classroom.
Remote study, Wilson added, has been particularly challenging for the 1,400 students on the campus, all of whom suddenly were faced—for the first time—with having to learn online.
Looking back, he acknowledges that things will not completely return to pre-Covid-19 ways. “We realized how, in this environment, stability is key, and flexibility has almost become an expectation.”
Foreign Engagement
Like Wilson, Stephen Zurcher, dean of the Asian studies program at Kansai Gaidai University, faced severe challenges when Covid-19 hit. In his case, that meant facilitating hundreds of study-abroad students at the university on semester- or year-long programs.
Following a schedule common at institutions outside Japan, Kansai Gaidai University had started its winter semester when nationwide calls for remote work and teaching began in early 2020.
At that time, the university had only a handful of days to transition to online—and mostly remote—instruction, Zurcher recalled. By the next semester, when their foreign students had left Japan, instruction became fully remote.
One challenge was how to instruct students who were living across different time zones. To this end, some courses were delivered in real time while others were pre-recorded and made available on demand.
In hindsight, Kansai Gaidai University was ahead of the online learning curve: before the pandemic, they had incorporated remote instruction and study in collaboration with partner universities under a program called Collaborative Online International Learning (COIL), a cross-border learning initiative involving institutions, faculty, and students.
“I don’t know how, but in the end, it all worked out,” Zurcher said. “We did a mid-semester survey of the students and, to my great surprise, the ratings of the classes and their interactions with the professors had jumped 15 points.”
While students, naturally, would have preferred in-person classes on campus, by some measures, student engagement with instructors had increased, he added, as had their level of satisfaction with remote learning.
Serving the Underserved
Zurcher’s experience is largely shared by Tom Mason, executive director of the United States–Japan Bridging Foundation (USJBF), a non-profit that provides sponsorship to underrepresented students so that they can study in Japan for a semester or a year.
Due to pandemic-related international travel restrictions, the USJBF exchange program was put on hold for about two years. But, rather than end it, the organization began online training programs, and these became a hit with students.
“We ran a webinar series called ‘How to find Japan-related careers.’ The purpose of that was to connect students to people who not only have found jobs in Japan, but also Japan-related jobs in the United States,” Mason explained.
Between 200 and 300 undergraduates participated in each seminar, suggesting that interest in Japan had not waned, despite the pandemic and restrictions on international travel.
However, Mason admits that most participants would have preferred in-person events. And industry experts acknowledge that, although remote learning—including interactive webinars and COIL—has expanded, it can neither fully replicate nor totally replace in-person cultural exchange.
“A lot of language learning is done by observing how people speak in real life,” he said. “And then there are the accidental interactions, which don’t really occur online.”
As the pandemic abates and international travel restrictions are set to be relaxed, the USJBF has launched online recruitment initiatives for its next batch of candidates.
“In the past, what we did was send them the finances and send them abroad. But now, we are able to run pre-departure orientations, as well as networking and mentorship opportunities, online.
“And, when they are in Japan, we can deliver supplemental infrastructure programs in person. Our students are based across Japan, from Hokkaido to Okinawa, so they’ll have networking programs in major cities—and we’re able to build that out because of remote working technologies.”
University Challenge
For students, the Covid-19 pandemic upended studying in ways previously unimagined. That was the case for Toshimasa Hatori, a fourth-year international business student and former student government vice-president at Temple University, Japan Campus.
Luckily for Hatori, he entered the university in fall 2019, just before the pandemic spread to Japan, and thus was able to enjoy some on-campus life, if only briefly.
Were there challenges when remote learning began? There were many. One was adjusting to online classes.
“Another was test-taking: the professors were concerned about plagiarism, which is a valid concern,” he explained.
And students were not really able to enjoy life on the university’s new campus, which had opened in August 2019, or use its facilities. “I was playing basketball, and I was the captain, but we couldn’t use our brand-new gym.”
Hatori recalled being a freshman. “Social gatherings were constrained; I couldn’t go to regular restaurants, nor could I hang out with my friends at a house party. We couldn’t even go to a supermarket at the outset of the pandemic.”
Without the opportunity to socialize in person, students chose, instead, to maintain friendships online via video platforms such as Zoom and the messaging app LINE.
However, this way of socializing has come at a cost. Jun Ikeda (not his real name), a fourth-year student based in Tokyo, said: “All conversations are now online, making it difficult to feel the other person’s emotions. This is especially true for people you meet for the first time.”
New Generation at Work
The so-called new normal has altered Hatori and Ikeda’s expectations of the workplace. When they start their jobs later this year, both expect hybrid options to be the norm, a change from their pre-pandemic expectations.
“Many friends of mine want a hybrid work experience,” Ikeda shared.
Despite the disruption that many students have faced during this period, some have found a silver lining in the Covid-19 cloud.
Miku Hashimoto (not her real name), a fourth-year student, told The ACCJ Journal: “I stayed in my hometown for a year with my family, thanks to the pandemic, and found that I like living in the country, where I can enjoy my hobbies and be close to family.”
Mark Davidson, director of government and external affairs at Amway Japan G.K., is sympathetic to the experience of students such as Hatori, Ikeda, and Hashimoto. Davidson’s own daughter had to navigate her university career during the pandemic.
“I have a daughter who is a university student. She did an internship in New York last summer, and it wound up being—except for two days—all online. That was not the best experience for her.”
A co-chair of the American Chamber of Commerce in Japan (ACCJ) Education Committee, Davidson believes that first-time hires will be challenged in new ways in a post-pandemic world. To succeed, they’ll need a diverse set of skills.
“More than ever, students will need a broad-based liberal arts background,” he predicted. “While they’ll need technical skills, more than anything else, they’ll need resilience and an analytical mindset to figure out problems—especially in this remote environment—that they may not have seen before.”
Young Professionals
But it’s not only students who have been challenged during the pandemic. Young professionals, too, have faced difficulties.
John W. Carlson III, for instance, transitioned to a new role at Novartis Japan in the summer of 2021, when the pandemic was raging. Carlson is co-chair of the ACCJ’s Young Professionals Forum (YPF) and the Healthcare Committee.
He is the new commercial partnerships lead and a senior strategic assistant at healthcare company Novartis Japan, where most of his work has been remote.
For new transplants like him, the early days in a company can be the most challenging. “Orientation is actually the hardest part, because you have to get people engaged with the company,” he explained.
“And the big challenge is not working within a department, but working collaboratively with colleagues—whom you would have met if you were working in the office—in other departments.”
Due to the pandemic, Novartis Japan began a redesign of the office, complete with remote-work technology which facilitates hybrid workstyles, according to Carlson.
“Essentially, employees get to choose which workstyle or format they wish to use.”
While the final redesign is yet to be seen, the expectation is that employees will split their work between office and remote locations.
“The office has become a place for collaboration, which requires more in-person work, while individual tasks, such as writing and analysis, lend themselves very well to remote work,” Carlson added.
In-Person, Remote, Hybrid
Despite the advent of new workstyles, challenges remain for young professionals. As many of them do not have a developed social network, feelings of isolation are common, as was the case with the students above.
“Mid-career professionals tend to have a house, children, family, and are more engaged with the business community, whereas young professionals are cut off from their university and have a relatively narrow network,” Carlson explained.
As a result, some young professionals in the YPF have had their health—in particular their mental health—adversely affected. It is a goal of the YPF to mitigate such isolation via in-person or hybrid networking events.
That said, Carlson recognizes that some young professionals have thrived under the prevailing online networking events held by the YPF.
Co-chair Anna Kimuro agrees.
Speaking personally, Kimuro, who is a client leader at IBM Japan, noted that remote work has allowed more young professionals than before to join online YPF events. One reason for the increase is that being remote negates the need to commute to a physical venue, leading to more time—and more opportunity—to participate remotely.
In a recent online event, members discussed how to expand their network informally within the ACCJ. One suggestion was to hold speed dating-style networking games where committee members meet chamber leaders.
But with the pandemic potentially waning, there has been a growing clamor for in-person events—or, at least, multichannel, hybrid ones—Kimuro added.
The New Normal
For companies, the pandemic caused major changes to internal and external processes. At Amway Japan, for example, all recruitment shifted to online-only processes from around March 2020, explained Hiroyo Aihara, the company’s human resources director.
“Everything changed: candidate meetings, job interviews, actual onboarding, orientation meetings with division heads, even how we present our company to candidates. All went online,” Aihara said.
The transition to digital-only was not easy for staff and new hires. In-person onboarding, for instance, became a singular affair conducted during a one-off visit to the office to receive key items, such as a work computer. And even then, the visit was socially distanced.
What’s more, there was a sharp learning curve to be navigated by staff, especially mid-career professionals experiencing remote work for the first time, Aihara admitted.
Which is not to say that remote work has been a cakewalk for recruits; it has not. That’s because many of Amway Japan’s new hires are returnee Japanese, or Korean and Chinese graduates settling in Japan from overseas.
For them, remote work was a double blow. “They usually live alone and need to find an apartment in Japan,” she explained. “But then, once they were ready for work, we had to tell them, ‘Please work from home.’”
That said, the transition to remote work was made easier because, even before the pandemic began, the company already had in place flexible workstyles, including some remote work.
“We were already allowing some employees to work two days per week from home, and we had initiatives such as dress-your-own-way,” Aihara added.
Her colleague, Davidson, who is also chair of the ACCJ’s Government Relations Committee, agrees. In the future, he said, companies will have to ensure that remote work feels personalized.
A version of the proverbial water cooler—the glue that holds companies and society together—will be required to garner comradeship among colleagues and students, whether that’s in person, online, or via hybrid solutions, Davidson concluded.
D&I Hiring in Healthcare
It has been two decades since the Japanese government set its target of having women in 30 percent of management positions by 2020. The country has fallen far short of that goal, which the government has pushed off to 2030. Titan Consulting K.K. Business Development Manager Sophia Plessier certainly noticed the imbalance on her arrival in Japan. Coming from San Francisco, where discussion of diversity and inclusion (D&I) and support for women in business are a part of everyday life, she found it striking how few Japanese companies were promoting these important issues.
Titan Consulting helps companies put diversity policies into action
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It has been two decades since the Japanese government set its target of having women in 30 percent of management positions by 2020. The country has fallen far short of that goal, which the government has pushed off to 2030.
Titan Consulting K.K. Business Development Manager Sophia Plessier certainly noticed the imbalance on her arrival in Japan. Coming from San Francisco, where discussion of diversity and inclusion (D&I) and support for women in business are a part of everyday life, she found it striking how few Japanese companies were promoting these important issues.
At Titan, she helps clients increase the diversity of their leadership. It’s a natural progression of her career in executive recruitment for the pharmaceutical, biotechnology, medical devices, and technology industries. She began that journey in 2015 in the United States, where she partnered with top healthcare companies to fill key spots in their management.
Focus on Diversity
Filling those positions is about more than just reaching a percentage. It’s about benefiting society through the innovation and solutions that emerge from teams built on diverse views, experiences, and backgrounds. And Titan’s area of focus—healthcare and life science—requires a little extra attention.
As Business Operations Manager Sean Lindley noted: “The benefits of having a more diverse leadership team are well established, but building that team can be more of a challenge in healthcare—especially in Japan—due to the somewhat conservative nature of the industry.” The way in which these companies approach screening adds an extra layer that must be overcome, he explained, “but with this challenge come opportunities, and if you’ve got something which can potentially remedy that, then the most conservative industry is probably where you want to try and apply the solution.”
The solution he speaks of is the D&I Spotlight Package, which Titan has created, inspired by another product they offer to clients which focuses on medical-doctor hiring. The package helps clients who wish to start putting their D&I policies into action through talent acquisition do so in the most effective way possible.
“Titan takes the time to understand the areas on which the client is aiming to focus their D&I hiring and the foreseeable challenges.”
The D&I Spotlight Package is a 12-month commitment from Titan Consulting which starts with an in-depth discussion to understand the client’s current situation and business needs. Titan takes the time to understand the areas on which the client is aiming to focus their D&I hiring and the foreseeable challenges. This offers a close partnership in which Titan provides detailed market analysis, access to an extensive network of professionals, a market map that identifies candidates, and ongoing, proactive support. Whether the client just wants a market map, needs to hire for key positions, or has extensive hiring needs, Titan is ready with a tailored service.
“We work with the client to pinpoint what type of professionals they want to engage with,” explained Partner Daniel McGrath. “Some clients have urgent and immediate needs while others are more focused on casual exploratory meetings for pipelining. Whatever their situation, Titan offers the opportunity to turn D&I hiring ambitions into reality for companies that are serious about evolving their business.”
Real World Results
Plessier shared an example of a successful placement. In another case, a medical device client, which was focused on Japan and had an entirely male executive team, was given a big incentive from the global executives to push for more diversity. They needed to replace their head of research and development, so decided to invest in diversity hiring and work with Titan. In just six weeks, the final candidate was selected from three finalists.
If you’re ready to strengthen your management team with more female leaders and greater diversity of voices and ideas, Titan Consulting is ready to help.
Learn more about the D&I Spotlight Package:
titanconsulting.jp/diversity