The Journal The Authority on Global Business in Japan


March 2014
The Role of HR in Japan’s Recruitment Environment
By Basil Le Roux

The key challenge for employers in 2014 in both multinational and domestic companies continues to be finding professionals with the necessary skill sets. According to the 2014 Michael Page Japan Salary & Employment Forecast, 46 percent of employers are expecting a skills shortage this year.

This includes technical skills, language-related skills, or a combination of the two. There is a noticeable skills shortage in these areas, since many roles require bilingual professionals. But only an estimated 4–5 percent of the population speak English, and few foreigners speak Japanese.

Given the urgency that surrounds hiring, companies will also be looking to invest in human resources staff to assist with sourcing the talent they need to most effectively accomplish their business goals.

Recruitment environment
Japan’s ongoing economic improvement and growing demand for talent are creating a very candidate-short market. Further, the demand for candidates is far outstripping supply, while the number of jobseekers increasingly equals the number of job vacancies. Thus, the most talented candidates often have multiple job offers from which to choose when deciding on whether to accept a new role.

As the world’s third-largest economy, Japan offers growth opportunities for multinational companies across a range of sectors. Meanwhile, the strengthening domestic economy is having a positive impact on local companies’ hiring plans. This is expected to translate into a significant increase in recruitment throughout 2014.

Industries experiencing relatively greater demand for skilled staff include technology, digital, banking and financial services, as well as retail. Also creating a requirement for talent is the fact that companies operating in the alternative energy (mainly solar) sector are increasingly choosing Japan as a place in which to establish their operations. This is, in part, due to the shut down of nuclear power plants and the subsidies available for alternative energy.

The uncertainty regarding economic conditions in the rest of the world is another factor causing foreign—particularly European—firms to expand in Japan. Meanwhile, the country anticipates a growth in temporary positions, as employers continue to consider hiring professionals on a project basis.

The role of HR
As favorable economic conditions in Japan attract investment from organizations across the professional sector, and employers require talent to support increased business activity, a need is developing for skilled specialist internal recruiters. They are required to work alongside external suppliers to hire talent.

In other areas of companies’ human resources functions, those to fill mid- to senior-level roles in learning and development are being eagerly sought. This reflects the need for staff training where a divide exists between skills required for strategic and for operational types of work.

For companies looking to secure the best talent, there is a focus on awarding salary increases to top performers, which requires the assistance of compensation and benefits staff.

In addition, to facilitate cultural or organizational adjustment, in-house skills in change management will also be highly sought after by companies in Japan. Global HR professionals, especially those with bilingual skills, are also in demand by Japanese companies establishing new operations overseas.

A range of skilled and experienced HR professionals are in particular demand in the pharmaceutical and medical industries. Associated companies will continue to grow and invest heavily in Japan, in response to the needs of its aging population.