IT
VENDOR & CONSULTING
The need for more staff working at IT vendors and consulting firms has led to a rise in the number of available jobs. With the increasing application of advanced technology in all industries, demand grew significantly in 2018. It's particularly for projects related to AI and big data as well as for opportunities in digital transformation.
Although AI and big data have been hot topics for several years, there had been hardly any available positions or hired candidates. In contrast, 2018 saw a rapid increase in job listings for engineers in positions involving AI and automation. Hiring is also becoming more active as IT roles have shifted to become the driving force of business. Automobile and pharmaceutical manufacturers have also made progress in implementing AI technology and other forms of IT. They aim to provide added value to conventional production methods. This desire of adding value to conventional products and forms of business has promoted competition between many companies. As AI, big data and cloud technology are becoming more essential, the competition to acquire talented individuals has grown rapidly.
There has been a notable surge in IT vendors specialising in RPA that have newly joined the market. Among these vendors, multiple foreign-affiliated corporations that specialise in RPA for Japanese companies have been offering positions in various areas. It includes project management, engineering, consulting, and presales. For RPA that does not require AI technology solutions, the bar to entry is relatively low. As a result, the number of recruited engineers has grown, especially those proficient in Java or C++. The 2019 job market is expected to remain highly active.
Although candidates say that salary is not the sole deciding factor, there has been a significant rise in salary standards. 2018 saw an increase in cases in which candidates and companies agreed to dramatic pay rises when changing jobs or hiring. There has been a growing trend of accurately evaluating the value of candidates based on their skills and experience. Unlike in the last, we determine the salary based on the compensation that they received at their prior positions. The median increase in salary following a job change has typically been 10- 15% compared to the candidate’s previous job. However, there were cases in 2018 of annual salaries increasing by 40% or more after changing jobs.
Prime candidates in the AI sector who wish to change jobs tend to receive between three and five job offers. There are even more job offers for machine learning engineers from other fields such as manufacturing or finance. Due to the intense competition for quality talent, the need for swift evaluation and hiring processes will become more important. Furthermore, many candidates in the IT sector appreciate flexible working conditions to maintain a healthy work-life balance. They also focus on if they will be able to fully participate in new technologies through their work. Or if there is an environment available for them to improve. Accordingly, companies that thoroughly promote management strategies and training programs to candidates tend to have the upper hand in hiring.
FINANCE
Recruitment for IT staff at financial institutions remains active. More companies participating in the cryptocurrency business in 2018 led corporations to search for new kinds of candidates. Excluding the insurance industry, there were more foreign individuals being recruited, especially those in developer roles. Many professionals are hired for their technical prowess, even if their Japanese proficiency was not sufficient for conducting business. Increased focus has been observed towards fintech business. This includes cryptocurrencies and blockchain technology. The finance industry has also begun to change its market structure. There has been a change in the demand for talent as well. In 2018, demand increased in particular for developers working on applications and data scientists, cloud platform engineers and DevOps. There has also been a marked rise in the wages agreed on when recruiting bilingual engineers from another company. This is true for talented candidates with expertise in data science, due to the recent balance between supply and demand.
Active recruitment of IT staff has also been observed within investment banks and securities firms. Some corporations which had consolidated some of their regional functions overseas have been returning some functions and personnel to Japan. This alleviates lease fees and other business costs. It also lessens the feeling amongst employees of being distanced from the main site of business operations.
Job openings have also been increasing in the web and mobile areas. The demand for skilled workers has been rising. The need for talented individuals such as web and mobile engineers is also increasing. Cloud platform engineers, who can transform workflows previously handled through paperwork into digital processes, are also in high demand. Additionally, 2018 saw a scramble to secure quality candidates for positions that utilise big data within marketing and strategic departments. Such candidates were offered unprecedentedly high salaries.
The majority of IT job openings from fintech companies are for developer positions. There is a tendency to favour individuals with a background in finance. It's because these companies engage in financial activities and the management consists mostly of persons with banking or securities backgrounds. At the same time, companies want to secure application developers who are well versed in technology. However, the salary rate in major financial institutions is significantly higher in comparison to other industries. There has been some doubt regarding whether hiring companies have the capacity to offer wages that can rival financial institutions. Many hiring companies do not put weight on candidates’ level of English proficiency, as most are Japanese start-up companies. However, developers working at the forefront of Japanese industry are international, having studied development and statistics at universities abroad. This means that the bar for recruiting is still set high. Even in cases where English proficiency is not essential for the position.
The concept of web engineers with advanced web development skills is still a relatively new one. Standard Japanese hiring conditions that call for ten or more years of experience for upper-tier positions are not suitable. The core age group in this pool of talent falls in the 20s to late 30s. Adding the criteria of being an English-Japanese bilingual shrinks the pool of acceptable candidates even further. For this reason, hiring requirements have continued to be relaxed for development positions with regard to applicants’ command of Japanese. This leads to an increase in foreign staff who are not skilled in the language. Salary standards agreed upon when changing jobs saw their highest rise ever in 2018. Reasons for this increase include changes in the roles of IT staff, which had been focused on services and operations. This also included an influx of talent from other industries and an increase in the scarcity of these individuals. Candidates who transferred into the financial sector from the gaming or online industries saw an increase in salary of 40%. Those changing jobs from Japanese to foreign-affiliated securities firms also saw a significant rise in their salaries. Candidates who successfully changed jobs in 2018 mostly saw a 10-40% increase in their wages. When looking at only banks and securities firms, the rate of increase was 25-40%. Due to the scarcity of talent, more companies have also started to give counter-offers. These offers may diminish the necessity felt by employees to migrate to a new environment. Because counter-offers can often provide significantly improved benefits such as the guarantee of promotions and higher wages. To successfully hire a candidate, it's necessary to provide a wage increase that would not be overshadowed by a counter-offer.
COMMERCE
Work performed in companies’ IT departments has been shifting toward projects that serve as the driving force for business. In 2019, this trend is expected to intensify as more efforts are made to consolidate, analyse and use data. The demand for data science, digital transformation, e-commerce and cybersecurity will also increase. The demand for talented professionals who can use these technologies will increase as well. Job openings for conventional positions like help desk staff and infrastructure engineers will also call for experience in digital transformation. We have also seen a notable trend of companies establishing new positions such as digital managers and digital analysts. Demand has remained high for data scientists as well as e-commerce managers and specialists. In 2018, awareness of the dangers of data breaches heightened throughout B2C businesses, particularly in the retail sector. The demand for personnel in the field of information security, including cyber security, has increased rapidly. Although B2C businesses were slow to implement security measures, B2C businesses retain similar volumes of personal information. This appears to have spurred them towards reinforcing their security systems.
Job openings in IT used to be focused primarily on daily support and maintenance. The majority of postings is for help desk or infrastructure engineering positions. However, in recent years, job offers have become scarce for candidates who only possess skills and experience in support and maintenance. Work responsibilities in the IT sector gradually shift to include analytical tasks. Hence, more candidates have made efforts to study areas that are not directly relevant to their current roles. This includes data science, digital transformation, digital marketing and e-commerce.
We anticipate that data scientists and digital managers will see the most demand in 2019. The supply of talented individuals who can use technology to promote business is scarce. Bilingual candidates with a command of both Japanese and English are even more of a rarity. The demand for digitally-savvy talent within B2C businesses and retail trade in particular is expected to remain high. This is due to new types of consumer behaviour such as ROPO (research online, purchase offline) are becoming increasingly popular.
Prime candidates often receive four to five job offers at once. So, companies that wish to set themselves apart often offer competitive salary rates. They display a flexible stance for negotiating working conditions then express the company’s potential for growth. New skills that can be acquired through the job and the career paths that candidates can take are also mentioned. Flexitime systems tend to be popular, such as allowing employees to arrive late on the day after a late-night conference.
Salary standards have also been going up. There are many cases of candidates being presented with salary offers that are 10-15% higher than their current jobs. Some candidates have been offered extremely high wages from companies in a bid to secure high-quality talent. IT used to be a means to an end in operations, but now it has become a contributing factor in management. It functions as the driving force of business alongside manufacturing and sales. All companies are taking great steps towards securing and implementing cutting-edge technology to enhance their competitive strength.As a result, professional salary rates are expected to rise at an unprecedented pace in 2019.
In the Kansai region, data scientists and data analysts who handle big data are also in high demand. There is an increasing number of companies bolstering their efforts to hire data specialists, regardless of the industry.
ONLINE
In 2018, the boom in the online industry encouraged both major corporations and start-ups to actively hire professionals in this area. Jobs for all types of positions were offered, from younger professionals to senior executives. In the e-commerce industry in particular, the number of job offers far exceeded that of normal years. Companies especially hired many specialists in big data and natural language processing.
E-commerce is gaining momentum as the term “e-tail” is derived from “retail". The traditional shopping practice of merchandise distributed from manufacturers to customers through brick-and-mortar stores has transformed. Now we see the rapid increase of consumers purchasing directly from manufacturers and distributors on e-commerce platforms. In response to a positive business outlook, many digital technology companies are aggressively investing in strengthening their organisations. They aim to launch new businesses to facilitate business expansion.
In particular, many companies wish to strengthen the areas of AI, machine learning, big data and data analysis. The number of jobs in these areas increased sharply in 2018. However, with supply outstripping demand, we anticipate that it will continue to be difficult to fill all job vacancies in 2019.
The number of open jobs for open source developers, mobile developers, and full stack/ front-end engineers continues to be high. Hence, recruitment is active in these areas. However, more companies are now seeking higher levels of experience and skills from these professionals than before. The demand for professionals who proactively improve their development skills is particularly high. These professionals typically receive better job offers.
Demand for English-Japanese bilingual professionals in the online industry has been increasing every year. We expect the demand for bilingual engineers to remain high in 2019. The number of job offers for younger and mid-level professionals is likely to stay the same or exceed 2018 levels. In contrast, companies are becoming more flexible in hiring talented people with limited Japanese language skills, especially among developers. By prioritising technological skill over language ability, companies are now hiring more non-Japanese professionals regardless of their Japanese ability.
A growing number of companies now require more experience and skills than ever before in specialised fields. Some professionals pursue personal projects on their own time. They publicise their work as open source software, which serves to proactively polish their development skills. Such professionals are in particularly high demand, and companies give them preferential treatment when hiring.
AI and data talent is rare. The lack of specialists in the online industry contributes to the persistence of an overwhelming sellers’ market. Candidates came to recognise their own specialised skills. They were remarkably aggressive in job searches in 2018, and this resulted in companies offering competitive salaries. Companies that offered salaries commensurate with candidates’ skills were more successful than companies that offered salaries based upon annual earnings. In addition, companies with a flexible approach to work styles tended to be more popular among candidates. Benefits such as flexitime, telecommuting and working from home helped attract the talent they sought.
CONTRACT: INFRA & SERVICES
Both foreign-based companies and Japanese companies that are expanding globally are hiring high numbers of contract and temporary employees. We observed strong demand for highly skilled talent with fluency in both Japanese and English. Cloud areas in particular showed a steady increase in the hiring of bilingual engineers. Japanese start-up firms hire bilingual employees who are able to bridge the local business in Japan with offshore technology teams. Some firms aggressively hire younger bilingual talent as candidates to become permanent employees. Because these individuals are considered to play a vital role in securing a future for their business. In 2018, many companies increased their recruitment budgets. They proactively invested in human resources, owing to strong business results in the previous year.
Demand for IT systems integration has increased due to business integration (i.e. M&A) in each company. More companies experienced difficulty in hiring enough engineers to carry out IT projects due to the fierce competition for talent. The imbalance between the supply and demand of talent resulted in a rapid increase in hourly wages. With regard to the recruiting of employees for working on specific projects, the hourly wages rose by around 10-15%. Furthermore, in response to the amendments made to the Worker Dispatch Act that placed a 3-year term limit on temporary employees at a single organisation, more companies hired high-performing employees on a direct contract basis. By doing so, they are able to retain them for a longer period of time.
Companies from all industries have been introducing cutting-edge technologies to drive business growth. These companies went through a preliminary phase between 2016 and 2018. They shifted to a phase of making use of these technologies in 2018. The insurance industry, for instance, launched an unprecedented number of products and services in 2018 that incorporate IT. IoT-related business involving smartphones and tablets also spread within other industries. Given the increasingly fierce competition for talent and the relatively low number of job seekers, more companies in 2018 were flexible during the hiring process. So that they could ensure sufficient numbers of skilled personnel could be hired. Job seekers can choose their preferred option from temporary employment, fixed-term contract employment or subcontracting. This trend encouraged the mobility of human resources, leading to a surge in recruitment.
Going forward, we expect companies to hire more cloud infrastructure engineers with knowledge of specific products. This trend will stem from companies’ desire to improve the degree to which cutting-edge technologies are implemented. So that they can meet the standards seen at offshore locations and the group headquarters. Accordingly, the demand for talent in this area is likely to further increase in 2019. The popularisation of next-generation security infrastructure technologies will prompt companies to hire bilingual engineers with knowledge of network security products. As a result, we expect to see an imbalance between supply and demand, which will further intensify competition for talent.
Cutting-edge technologies are being introduced at an accelerated pace in anticipation of the 2020 Olympics to be held in Japan. In light of these trends, the demand for bilingual network security and information security specialists to increase in 2019.
To hire more exceptional talent, an increasing number of companies took a positive attitude towards expanding their recruitment budgets. More companies have recently started to make use of senior talent in their 50s. They see value in the deep insights that they can provide by drawing upon a wealth of experience. We predict that similar tactics and shifts in perspective will continue to spread among companies in 2019.
CONTRACT: BUSINESS SOLUTIONS
Demand continues to increase for talent employed on a per-project basis, mainly among start-up and small and medium-sized firms. Many job postings seek workers with knowledge of niche technologies. Most successful hires are made under a temp-to perm arrangement, which can be convenient for both employers and candidates. Temp-to-perm agreements allow parties to consider the worker’s compatibility with the workplace environment, corporate culture, and workflow before commencing permanent employment. Such agreements are favoured by employers as well as workers in the field of IT.
2018 saw rises in hourly wages in addition to surges in recruiting activities. In some cases, hourly wages rose by 20% compared to the previous year, and even by 40% in exceptional cases. This trend is a result of the imbalance between supply and demand. It's due to the number of job seekers was extremely low in comparison to the number of available jobs. Some companies decided to increase their recruitment budget to avoid falling behind competitors in acquiring talented individuals.
Demand has soared for professionals in the areas of machine learning and big data. We expect this trend will continue to increase in 2019. In the past, Japanese proficiency was a strict requirement for the majority of jobs. However, to secure expert talent, many companies offering jobs to non-Japanese professionals regardless of their Japanese ability.
We expect that the demand for Japanese English bilingual developers will increase across the board in 2019. In the IT industry, we observed a plateau in the demand for developers with native Japanese and bussines-level English proficiency. Nevertheless, companies gave more preference to technological capability over Japanese proficiency in comparison to previous years. As a result, more companies directed their attention to talent living overseas and have worked diligently to hire such individuals.
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