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Here is a collection of indicators that should send a shiver down the spine of all employers in Japan. The average job securement rate of graduating university students in April 2015 was 97 percent. Keep in mind that this is already a relatively small pool of higher education talent from which we want to recruit.
In 2013, only 50 percent of high school graduates went to university compared with the Organization of Economic Co-operation and Development average of 62 percent.
There is no major change in the offing though, because currently 99 percent of high school graduates found a job upon graduation. Official numbers also tell us that over the last 20 years, the number of 15 to 24-year-olds has halved.
Moreover, the number of Japanese turning 20 was 2.76 million in 1976; in 2015 it is 1.26 million. So youth recruitment demand is likely to outstrip supply, for the foreseeable future!
The required birthrate for stopping population decline is 2.1, but currently Japan is only at 1.43. Much more effort is needed here, obviously, but the prospects for a baby boom do not look promising.
A recent Japan Family Planning Association survey stated that 20 percent of men aged between 25 and 29 had no interest in sex. Forty nine percent of married couples had had no sex in the month prior to the survey, and these numbers are climbing higher each year.
Couples are marrying later, having fewer children, having less sex, and there are few prospects for resolution in sight. Japan, to put it simply, is not producing enough future workers.
Meanwhile, in 2014 the country accepted 14 refugees out of 5,000 applicants, and the debate about immigration into Japan hasn’t even begun yet.
There will be little talent recruitment competition though from young people becoming self-employed entrepreneurs instead of joining companies. In terms of ease of starting a business, the World Bank noted Japan was ranked 120th globally. This is good and bad news for bosses, however, because Japan needs more innovation and risk taking.
The female participation rate in the workforce is at 62 percent—the figure for men is 81 percent, so that gap is closing. It will continue to improve, but how long will this process take? Support for working mothers is still underdeveloped in Japan, so these changes won’t happen soon.
In a bleak portent of our future hiring quandary, the latest job openings-to-job-seeker ratio for Tokyo is 1.65. The combination of fewer young people coming into the workforce is naturally going to make hiring youth talent so much harder.
If we also take into consideration the large decline in young Japanese studying overseas, down over 30 percent since 2004, then the future talent pool of fluent English speakers also shrinks.
A recent survey of high school seniors found 58 percent don’t like studying English. In 2013, Fast Retailing Co., Ltd. boss Tadashi Yanai picked up on this trend early when he commented that, “young people are comfortable with life in Japan. We promote things they despise—going global and studying English.” The pool of the most attractive educated talent in Japan is drying up.
Foreign companies here tell us that even getting job applications from graduating students is proving more and more difficult. The students are getting multiple offers, and—even at the “job offer made” stage—the competition to actually get them on board is fierce.
Our troubles don’t end there, though. We also know that 40 percent of new entrants are ditching their employer after three or four years and heading for greener pastures. So getting them and keeping them is only going to grow in importance.
When surveyed by the Sanno Institute of Management, young entrants into the world of work showed that they want to develop their skills (68 percent) and gain job security (52 percent). The survey also showed that more than half (76 percent) want to stay with their company until retirement.
Conversely, in the Japan Productivity Center survey, 30 percent said they would switch jobs for better working conditions. In that survey, the ratio of those who prefer a salary which is not tied to achievement and performance rose from 28 percent to 44 percent between 2013 and 2014. Uh oh!
Companies that invest in continually training these young people and their middle managers will do better in this talent war. The young demand it and their supervisors need it. How is your succession planning coming along? If you haven’t confronted this issue yet, you soon will.
Custom Media publishes The Journal for the American Chamber of Commerce in Japan.
© Japan Today
25 Comments
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Black Sabbath
What to do?
Give me an "I"! Give me an "M!" GIve me another "M!"....
sighclops
The sooner Japan's seasonal, mass-hiring ritual ends the better off everyone will be, especially the kids that slave away for the Center Exam. At least for the foreseeable future, Japan Inc. will be stuck in 'showa' mode.
Aly Rustom
The article fails to mention a dire problem: with the pool of youngsters shrinking, who will become the next generation of cops, SDF, civil servants, farmers, fishermen, etc.
A shortage of corporate new recruits can be dealt with through mergers and acquistions or simply downsizing. The above jobs have a direct effect on the national security of the nation.
15 years ago, there was still some pressure to conform to traditional standards of getting married and starting a family. Now, with MOST people opting to remain single, that pressure has vanished. Add to that the herbovore men, the recluses, the spinsters who have an unhealthy relationship with their mothers, and so many other problems...in short there is NO WAY to reverse this. Even if they could, it would take 25 years to see any postive effect as the babies born have to grow up.
Japan will do the right thing. AFTER it has tried everything else. When Japan collapses (and it will) due to as much people retiring as working, they will have a scenario that will make Greece look like heaven. Then, and only then, will the GOJ get the motivation and mandate from the public they need to change and allow the big I.
Change will happen, but Japan needs to get to the brink of destruction first. Pity that this is the only way they learn.
Scrote
A lot of hand wringing there, but the statistics show that companies are not prepared to raise salaries to keep good workers. Instead, wages continue to fall. The first company to offer decent salaries and no unpaid overtime will have the pick of the new recruits.
GW
This blurb is talking about what already started over 2 decades ago, nothing new at all except its getting progressively WORSE as time goes by.
I used to care a lot about this but kind of gave up about 10yrs ago as the locals don't really care so why should I!
I agree with Aly above, Japan wont really start to deal with the great many issues that are here & have been around for more than 20yrs now until they in really dire straits.
As I have said for ages on jt I am SO GLAD the wife & I have no kids, the future here is dim already & its going to get a lot worse.
Japanese are a fatalistic bunch I cant see them doing much until its getting horribly bad, if even then......
katsu78
I can't tell if this article is serious or sarcastic.
These all sound like excellent things. Also, isn't it kinda dubious to say 76% want to stay with their company, and then turn around and say another survey found 30% are willing to move, and present those numbers as though they somehow contradict each other? 76%+30%= 106%, that's not "conversely", that's two surveys reinforcing each other with remarkably similar data.
Honestly, the title of this article should be changed to "Hey boss, if you think you're just going to get handed a young employee who is already an expert in everything you want them to know and who will work for any conditions you throw at them regardless of what your competitors are offering just because of their gratitude that you would offer them a job, your nightmare begins now." I can see how that's a bit long, so maybe just shorten it to, "Hey incompetent bosses, your nightmare begins now".
MyTimeIsYourTime
Poor reckless. I feel sorry for your job situation.
SauloJpn
I think that when Japan finally starts to consider immigration as a possibility, the country will be so far down the drain, people will not want to come here anymore. Very sad outlook!
sangetsu03
Since university graduates in Japan don't learn anything in university, and usually get jobs compeletely unrelated to their field of study, why bother hiring university grads af all? It would save a lot of time and wasted money simply to hire new staff members after they graduate from high school.
itsonlyrocknroll
The most valuable asset to my business is the employees, the business could not develop the next generation of technology and accompanying software suites if the company structure did not value employees as highly as customers. Really is that simple.
This is not the case when we visits suppliers, lapses in quality, and productivity are common when suppliers suffer high turnover of staff through failure to invest in there people.
Kabukilover
A nightmare for the capitalists and better times for workers. They will be able demand and get better pay and shorter hours, and other benefits. The SDF will have a major shortfall, more so if Japan starts fighting the U.S.'s wars. That will bolster Japanese pacifism if nothing else.
Japanese companies have had it too good : exploit the young and fire the middle aged. That is going to end.
The situation can compared to Europe after the plague. Not many workers were left and those who were could get more out of the bosses.
sangetsu03
Not so much, unemployment is low not because of strong sales and high demand, but because Japan's falling population is depleting the workforce. This decrease in population is also reducing the customer base and sales, which will negate any potential wage increases that a labor shortage might cause. Japan's demographics are a nightmare for both businesses and workers.
Aly Rustom
That's EXACTLY what I'm thinking.
GW, I see what you are saying about not having kids. We are expecting our first in October, and trying very hard to immigrate to Vancouver
GW
Aly,
I hate to say it, but that is a GOOD idea!
I wish Japan was in better shape & in a better position, but its NOT & its scary the decline I have witnessed for more than 20+yrs now & Japan doesn't seem to be doing anything of significance right, more often its more steps BACKWARDS!!
I get NO JOY typing this, quite the opposite in fact.
Its come to the point where I could never recommend a young person to venture to Japan to give it a shot, its just so far gone the risk to ones career & life could be very significant now, UNLESS they knew & stuck a 1year maximum, perhaps 2 if they were very confident to move on elsewhere & be employed. Anyone considering Japan for the long term now I could simply not recommend they do so.
For those with kids, please do your best so they are at least bi-lingual & try to keep a foreign passport for them, it could be very good insurance for them.
Again I hate to be typing this stuff, but I refuse to sugar coat it!!!
jerseyboy
To me, this is the scariest number in the whole article. The workforce is shrinking, which means that if Japan is to enjoy any level of economic prosperity, it must increase its level of competitiveness -- and 44% of the young people don't want their salary tied to "achievement and performance". Anyone who does not believe Japan is a pseudo-socialist society, really needs to think again.
F4HA604
Personally I question the dogma that Japan needs to maintain the status-quo both population wise and economically.
I'm not sure its entirely fair to condemn Japan for preferring to face population decline than to accept immigration.
Who knows, an increased gap in the supply and demand of the labour pool may spur changes in their work culture such that the average level of productivity per capita increases (to match Germany's numbers for example), this in turn may allow their economic standing to remain largely the same.
I'm a born and raised Vancouverite and immigration was obviously a solution that worked for us Canadians. Having said that I don't think its right to deem openness to immigration a universal marker of "advanced-ness" and accuse countries who don't accept immigrants as being backward.
@ SauloJpn- I think that when Japan finally starts to consider immigration as a possibility, the country will be so far down the drain, people will not want to come here anymore. Very sad outlook!
Dude, why should Japan do something they don't want to just to be appealing to the likes of you? Is Japan some kind of Geisha for the international community in your eyes?
Aly Rustom
GW
Agree 100 percent. Been here nearly 20 years myself, and the right wing shift, pop decline, bad economy, and worse politicians just make me more and more nervous. To everyone here, GW is right. Get out if you can. We are trying believe me. We do love this country. But Japan doesn't love itself.
I just wonder how did it all go so wrong so quick?
GW
F4HA604,
My oh my, do you really think Japan is FACING its issues of population decline???? If you do I have some swampland to sell you to build condo's & nuke plants on!!!
Japan has & IS pretending these problems don't exist, its been head in the sand for around 30yrs doing nothing, that is NOT the same facing population decline!
Aly.
I wish you & your family luck, even without kids I don't think my wife would ever consider moving out of Japan to where I am from or somewhere neither of us have lived. She travelled a LOT before we married, English is good, but we aint young anymore, her Mom is on her own 600km away as my FIL passed a number of years ago......
Not so easy to pick up & move, and despite my often biting posts I truly love Japan but it pains to see her screwing up so badly in so many many ways & that's why I am glad we have no kids, if I did the stress would be brutal & not sure the mrs & I could survive it, and then it would be even tougher for any kids. That said I would love to be proven horribly wrong & see Japan prosper immensely...............
genjuro
@Reckless Sorry to hear about your situation. I notice that companies with older execs in charge are resistant or unable to change often lead to lack of innovation, stagnation and lack of competitiveness. Hope things go better for you.
@GW Thanks for your opinion as someone who is a 20-year-plus expat. That's a good idea to hang on to one's home country passport (though I guess it depends where you're originally from). I've noticed not a few have decided to naturalize anyway despite the not-so-bright future of this country. Personally I find it's a tough decision to make. It really depends on one's own situation.
On a brighter note, I read there are more and more younger Japanese are eschewing the corporate culture route and starting their own ventures. Many are women who don't like the office politics and glass ceiling, and men who could care less for the salaryman lifestyle and lifetime employment. They eventually decide to found their own startups.
They're still few and far in between but increasing. I just hope the government does more to promote and encourage them through funding, sponsorship, business incubators, etc. This is just what Japan needs to get out of the doldrums. Hopefully before it's not too late. Otherwise it just might end up being curtains for Japan Inc.
jerseyboy
Aly and GW -- what took you so long to reach this conclusion?
GW
Hey J-boy!
I have seen the writing on the wall for a long time, believe me! What I posted above idea wise dates back a decade plus for me ....
That said, if ones ties are deep here & mine are, what can I say I love my wife, yeah sure she drives me nuts at times, and by extension I am connected to her family, admittedly my family ties for me from back home have less play.............
And I run my own business, no work no pay.....that said I have been doing well, so I am alright so far.
For me now to pull up stakes & bugger off would cause people I LOVE great pain, so......... I carry on, life isn't always crystal clear and/or fair.................
Me I am trying to balance all this & still kick back on occasion & enjoy a great beer & a better scotch & hang with people I like...
At times I question myself for sure BUT I am still ahead in the .......game...
admittedly its tougher each year to stomach the way Japan is going, but I try to maintain a bit of a lead......
Danchan3
The establishment have had things their way for so long it's allowed them to develop a kind of absolute arrogance and complacency in their treatment of the people, Japanese natives and immigrants.
When your major companies flagrantly disregard the labor laws of the country what actually makes Japan even "developed"? If people can't expect safe and decent treatment according to the rule of law then how can you expect them to be comfortable in making the sacrifices that immigration demands? If you have an education there are other places more welcoming that pay better and treat you nicer without constantly reminding you of your outsider status or inferior position.
I would be interested to know for example, what percentage of smart Chinese graduates who learned Japanese and took jobs in Tokyo stay around longer than five years. I remember reading an article that talked about the poor retention rate and the various differences and problems in corporate Japan that was starting to actually discourage exchange students from even bothering (they were hearing about the conditions from their friends who got jobs ahead of them, and were leaving for home). The comments in Japanese below were along the lines of "Mostly lazy Korean's I'd bet. If you don't want to work hard go home!" That summed it up for me. Problems? There are no problems. Japan is fine and foreigners are just lazy.
Well, good luck with that. Only a few more months before my partner and I are gone.