2017 saw both companies and consumers (i.e., workers) encounter labour shortage and work-style issues amid the government’s presentation of detailed measures on human resource development and work-style reforms as priority measures. There were also widespread media reports on labour shortages and death-by-overwork cases at multiple companies.
Demand for Bilingual Professionals
The effective job openings-to-applicants ratio announced by the Ministry of Health, Labour and Welfare moved above 1.5 to 1, the highest level in 43 years, and a majority of companies operating in Japan confronted labour shortages. Despite this, global and cross-border business accelerated even further in Japan throughout 2017 alongside advances in globalisation and technology. As a result, many companies in a wide range of industries were in greater need of professionals who are both familiar with global business and proficient in a second language, putting the level of demand for bilingual specialists at an all-time high. Companies’ ability to secure talented bilingual professionals with specialised skills and abundant experience is beginning to affect corporate futures and is a key to growing the Japanese economy.
Human Resources Needs in the Manufacturing, HR and Finance Industries
Traditional business areas have begun adding new specialty skills to hiring conditions such as automotive firms and other manufacturers’ employment of mechatronics engineers who possess both electrical and mechanical engineering skills. Demand is also growing for professionals who can leverage issue discovery/solution capabilities and strategic decision making to contribute to organisational and business growth such as human resource business partners (HRBP) in HR, financial planning & analysis (FP&A) personnel in finance, and data analysts in commercial and financial services. While Tokyo’s effective job openings-to-applicants ratio is just over 2 to 1, the especially strong demand for both positions requiring these highly specialised skills and positions in new fields is reflected by a ratio of between 4 and 5 to 1. In contrast, the ratio for general administration and accounting positions is less than 1 to 1.
Continuing a trend from the latter half of 2016, many industries in 2017 saw a spread in the application of cutting-edge IT technologies as evidenced by the broad use of the ‘tech’ suffix to describe new fields such as fintech, meditech, HR tech, real estate tech, and agritech. Additionally, the acceleration of IT security measures ahead of the 2020 Tokyo Olympics is particularly notable. Given these trends, Japan has recently been facing a significant shortage of engineers who are capable of deploying AI and IoT technologies and sales specialists who can sell these technologies in Japan and abroad. Entirely new jobs are also being created in the emerging ‘tech’ fields mentioned above.
Hiring Trends for Mid- to Senior-Level Professionals Above 35
The frequency of job changes among professionals aged 35 and older is steadily increasing. In addition to hiring mid-career professionals with the hope that they have the potential to bring future value to the company, more companies are hiring highly experienced and skilled mid- to senior-level specialists from whom these companies can immediately benefit in order to expand their business or enter into a new market or category. With the exception of certain technical positions in the IT sector (especially in the aforementioned ‘tech’ areas), it is rare to find candidates under the age of 35 who possess skill sets that match what companies are looking for. Furthermore, companies are now more flexible and it is increasingly acceptable for professionals over 35 (and in some cases professionals in their 50s and 60s) to change jobs as both employers and employees are more aware of the sellers’ market conditions. When companies hire these mid- and senior-level professionals, they tend to require strong technical skills and significant experience, including, but not limited to, management skills and experience in engineering, finance, or sales.
Bilingual Professionals and Pay Increases
Despite growing labour shortages, pay increases remain sluggish for professionals who stay at the same company. This situation can be attributed in part to the lack of significant resistance or discomfort among workers toward this degree of stagnation as they have grown accustomed to an absence of price increases resulting from over 20 years of deflation. The cautious stance of companies toward raising personnel expenses and seniority-type wage structures at traditional Japanese companies are also a factor.
Demand is steadily increasing for English-Japanese bilingual professionals with specialised experience. Salaries offered to these skilled candidates when changing jobs are often 10-15% higher than at their previous positions because the supply of professionals with the required skill sets is far less than the demand. In some cases, salary increases are as high as 20-25% in certain areas such as the emerging ‘tech’ fields. Companies are also making more attempts to attract skilled professionals by offering work-style initiatives such as remote working, training/reskilling programmes, and reformed assessment standards, and these types of initiatives should see further expansion in 2018 and beyond.
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