MANUFACTURING
AUTOMOTIVE
Companies in the automotive sector, where advances in autonomous driving and connected car technologies are accelerating, are recruiting an increasing number of software and electrical engineers responsible for components and testing. This led us to handle a record-high number of job offers and successful job applications for these positions. Many automotive-related manufacturers in 2018 started hiring in-house development representatives, while at the same time an increasing number of suppliers began stationing on-site engineers at finished-automobile manufacturers. Moreover, as leading manufacturers reviewed their relationships with suppliers, primary suppliers intensified their sales activities and hired more specialists in both sales and business development.
In recent years, many companies in the automotive sector have restructured by merging or offloading unprofitable businesses, causing some professionals to change their jobs. In 2018, China and Europe implemented policies to expand the use of electric vehicles (EV), and Japan’s Ministry of Economy, Trade and Industry also started promoting EVs. This widespread promotion of EVs has driven growth in the employment of engineers. In addition to electrical and software engineers, companies were also recruiting an increasing number of materials engineers responsible for developing lithium-ion batteries.
Although the pool of bilingual engineers in Japan is very small, we are witnessing a growing trend in which companies are seeking candidates with in-depth expertise and a wealth of experience in each newly emerging specialised field. Recognising the current shortage in the supply of talented professionals in Japan, more companies in 2018 softened their initial preference for proficiency in Japanese and hired more non-Japanese candidates.
For mid-career engineers in the automotive sector, in addition to gaining exposure to new technologies, another key deciding factor when changing jobs is the possibility of engaging in research and development. The average salary offered for a new job in 2018 increased by approximately 5% compared to 2017, and many candidates who wanted to change their job tended to make a decision after being offered a salary increase of 5-15% or more. This is a trend we expect to continue in 2019. In fact, some companies have even started to differentiate their payment systems by offering sign-on bonuses to overcome competition for particularly strong candidates.
GENERAL MANUFACTURING
With a boost in business confidence and advances in technology, demand is increasing for engineers, project managers and sales & marketing representatives across the entire manufacturing sector. The manufacturing sector is seeing the accelerated deployment of next-generation technologies such as industrial IoT, AI and robots, resulting in increased demand for multi-skilled 23 24 engineers. In particular, major manufacturers are showing an eagerness to hire engineers with experience in sensor technologies, connectivity, robots and software to adopt industrial IoT and factory automation (FA). We expect this trend, which grew throughout 2018, to continue in 2019.
Some foreign-affiliated manufacturers that entered the Japanese market several years ago are advantageously carrying out sales activities and increasing revenue from aftersales services by recruiting more field service engineers. This has led to a growing demand for young, Japanese-English bilingual junior- to mid-level field service (maintenance) engineers and sales specialists.
Although most positions require skills and experience in a specialised field as well as English proficiency, many manufacturers are prioritising the former. They show a willingness to hire non-Japanese candidates with lower Japanese proficiency. Due to the talent shortage, some companies are making special efforts to recruit candidates, such as softening their Japanese language requirement to a conversational level (e.g. JLPT N3) and building an environment where new employees can learn Japanese on the job and through training. By contrast, requirements for English proficiency are increasing each year. Sales positions require English skills in order to act as a liaison with the overseas headquarters of foreign affiliated companies on the basis of customer feedback. As for technical professionals, there are an increasing number of positions that require active engagement in service proposals, such as project and application engineers. These positions require more complex skill sets than conventional positions, such as the ability to make proposals and skills for dealing with customers, as well as more advanced English proficiency. At the same time, facing the difficulty of the talent shortage, companies have begun to be more flexible about hiring candidates. If the skill set does not perfectly match the job, candidates can be trained to have useful skills. We expect this trend to continue to grow in 2019.
As the shortage of technical and global candidates escalates, companies are diligently attempting to secure strong candidates by offering them higher annual salaries than they currently earn, as well as high incentive bonuses to senior-level professionals. Competition is intensifying, especially over young engineers who are small in number due to the declining population and fewer students in the science and engineering majors. For these reasons, the average candidate is offered a 15-25% higher annual salary compared to their current compensation when changing jobs.
In the Kansai region, as movements toward Industry 4.0 and IoT are also advancing, companies are in a race to proactively secure experienced professionals to achieve their goals of implementing the latest technologies in their products and services. In addition, there are consistent numbers of candidates who are attracted by the growth factors in these fields and seek these positions as a chance to gain new skills.
In sales and engineering positions, candidates with expertise and skills in machines and electronics were especially popular. Furthermore, companies have increasingly begun setting their sights not only on skilled and experienced senior hires, but also on young hires with a strong potential for growth.
Due to the imbalance in supply and demand for human resources, many companies are securing higher hiring budgets in an effort to compete for acquiring skilled professionals by outbidding competitors with higher salary offers.
CHEMICAL
With the robust domestic economy and the worldwide growth of the manufacturing sector, chemical manufacturers operating in Japan are generally doing well. This has contributed to a steady increase in demand for bilingual candidates. Many foreign-affiliated companies have created additional positions while Japanese companies started to recruit bilingual, global candidates. This has caused demand to exceed supply and the market to continue to be favourable for job seekers.
In Japan, a leader in the automotive sector, recruitment activities in the areas of EV batteries and EV charging stations were especially active throughout 2018. In addition to sales and marketing personnel, we observed strong demand for technical service personnel (i.e. engineers who also make proposals and engage in negotiations) and we expect this trend to continue in 2019.
There has also been a strong, ongoing demand for candidates in the cosmetic, dietary supplement and functional food industries. As the Japanese market is highly health and beauty-conscious due to an ageing society, we observed robust performance in companies in these areas. A high demand for natural materials, such as organic produce, led to an increase in positions, especially those related to application development (product development).
In addition, 2018 saw an increasing number of Japanese and foreign-affiliated companies creating positions in their Tokyo offices that supervise Asia or the Asia-Pacific region. These positions are responsible for making decisions regarding business in Japan as well as overseas. It is particularly appealing to candidates, partly because many companies do ‘spec-in’ work for the entire region with reference to Japan, resulting in relatively seamless recruitment activities. In addition, there was robust and consistent demand for young bilingual sales and marketing personnel with knowledge in technical areas. We expect this demand to continue growing in 2019.
Recently, the market has been abuzz with the term “material informatics” (MI), which refers to applying AI technologies to material research and development. As major Japanese companies face new challenges of hiring professionals in the digital area such as MI specialists, we anticipate an increase in demand for these professionals starting in 23 24 2019. As the demand for bilingual scientific/ engineering professionals exceeds supply, we are witnessing progress in the hiring of more female candidates among companies, especially US-based chemical manufacturers. Meanwhile, some companies have begun employing non-Japanese candidates for technical jobs such as R&D and engineering, provided they can speak at least business level Japanese, which is required as the official internal language. On the other hand, fewer companies are hiring non-Japanese candidates for sales and marketing jobs. It is because of the belief that these jobs require advanced Japanese proficiency to engage in negotiations with customers, as well as a deep understanding of Japanese business practices and culture.
Making quick decisions and offering competitive salaries are required in order to secure strong candidates. As the average salary in Asia is increasing, it is imperative to consider paying for positions that supervise the entire Asia region. For instance, there were occasions in 2018 where sales and technical candidates in the chemical field were offered 15-30% higher salaries compared to their former jobs. Not only pay, but also potential and stability as well as business and research activities are key decision making factors when changing jobs. In particular, the promise of high-end domains, such as the areas of EV batteries and engineering plastic, are gaining popularity.
ENERGY
The contracts under which households have sold surplus solar electricity to the grid since the policy was launched in 2009 will draw to a close at the end of fiscal year 2019. This signals a shift in the demand for talent in the energy sector towards conventional energy, renewable energy and energy storage professionals.
Now that renewable energy is shaping up to be an important energy source, an increasing number of foreign companies in offshore wind power generation are entering the Japanese market. Since alliances between Japanese and foreign-affiliated companies are looming on the horizon, recruitment is likely to accelerate in 2019 for specialists in the Japanese market, particularly in the area of offshore wind power generation. While the majority of mid-career recruitment in the energy sector in 2018 was comprised of engineers, 2019 will see more of a focus on commercial experts as more foreign firms enter the fray.
As for the fields of hydrogen fuel, electric vehicle charging and electricity retailing, we anticipate that the demand for talented professionals will continue growing in 2019. There will be incremental recruitment activities for engineers engaged in projects to store surplus renewable energy or convert it into hydrogen, as well as sales and marketing professionals needed for reaching new customers and promoting sales.
In addition to the aforementioned area of offshore wind power generation, we are seeing many foreign-affiliated companies enter other areas of the renewable energy market. As a result, companies are now looking for mid- to senior-level professionals with a wealth of experience. This has led to an increase in the number of jobs for business development specialists involved in business expansion and engineers responsible for the operation and maintenance of power generation facilities. In this light, we expect to observe robust and consistent demand for electrical engineers with bilingual proficiency in Japanese and English. In particular, we anticipate that companies will make strong bids for bilingual candidates possessing second-grade chief electrical engineer certificates (or higher) and practical experience in the energy sector, including solar power generation.
In this market environment, offering competitive pay and bonuses is increasingly important in order to attract talented candidates. In fact, many companies offer better pay to new business development and sales personnel than their former employers. For instance, in 2018 we saw experienced managers being offered salary increases of 30% or more when changing jobs. In addition, candidates have emphasised the possibility of engaging in projects featuring offshore locations, exposure to state-of-the art technology and the opportunity to gain experience in new industries as key deciding factors when changing jobs.
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