The Great Resignation
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.
