Postwar Japan’s employment system has diverged from that of the West. Legal protections make it nearly impossible to dismiss employees, and create a situation in which most university graduates seek work in their last terms of study. They join companies on graduation in April, and then stay in the same company until retirement. In this jobs-for-life system, today’s graduate is likely to retire no earlier than 2055 — spending at least the next 39 years with the same company.
Does this sound implausible? It probably is. The coming four decades, in which the full consequence of demographic decline will become a reality, are unlikely to be as kind to Japanese staff as the previous four.
Workers are beginning to take action on their own. “Fading prospects for lifetime employment are leading to a little-known but important transformation in Japan,” Richard Solomon of Beacon Reports wrote last year. “Increasingly, employees are zigzagging between companies to reach the top of their profession.”
Many wishing to change their circumstances are opting for mid-career training to get the skills they need for raises, promotions, and new jobs. One option on the table, the U.S. Certified Public Accountant (U.S. CPA), which is known globally as a top-notch accounting qualification, is now being used by Japanese to prove they can do more than just count a company’s numbers.
PUTTING IN THE HOURS
“In Japan, having the U.S. CPA credential is indicative of a person’s proficiency in accounting, general business, and also English,” Anthony Bedard, manager of international operations at professional training company TAC Co., Ltd., told The Journal. “For those just entering the workforce, this certainly offers a potential hire an advantage over their traditionally educated counterparts. This is especially true in companies with a more global vision. For those mid-career, the U.S. CPA can offer a person greater mobility within their own company, or in moving to a new company. The reasons for this are essentially the same.”
Junri Shindo of the vocational school Abitus said that his company has seen many graduates use the CPA to improve their careers. After getting the license, “many students change jobs and [move into new] industries, financial institutions, and accounting/consulting firms.”
Taking the courses is a significant investment. To study at Abitus, students pay between ¥500,000 and ¥800,000, and are expected to study for around a year before taking the U.S. CPA Examination, which is only given in English and therefore requires a high-level command of the language to pass.
In exchange, Japanese who get licensed — a feat that requires one not only to pass the examination but also to accumulate a certain amount of professional experience in a related field — get leverage in interviews with future employers. They also gain knowledge that will allow them to communicate more effectively with international co-workers in industries such as accounting and finance, and proof that their business knowledge and English proficiency are high.
“The U.S. CPA positively affected my career path,” Kazunari Miyazaki of NEC Corporation told The Journal. “My company has a promotion rule that you must have a license such as a CPA. I was promoted when I got the license. I belong to the global business division and am in charge of mergers and acquisitions staff. I always work with financial advisors, so I need CPA knowledge for financial due diligence.” Miyazaki now also teaches the U.S. CPA, and says he derives pleasure from the high levels of motivation among students.
Some, however, may not see instant returns. “In Japan, it is not necessarily something everyone in finance and accounting has compared to other jurisdictions,” said Brendan Walsh, who manages finance and accounting recruitment at Morgan McKinley. “Japan has probably held on to the experience-over-qualifications mindset longer than other countries, but even that is changing for newer candidates.
And clients are becoming more and more insistent on candidates having the qualification every step of the way. It gives candidates more credibility and a little bit more weight, so it’s helpful to have.”
In the 14 years that Walsh has been recruiting, he says that he has seen the mindset among employers and employees shift in Japan. Today he believes demonstrable skills trump simple work experience for many.
“When I first came here it was almost taboo to move companies if you’d been there less than five, seven, or 10 years,” Walsh said. “And that has certainly changed, particularly since the bankruptcy of Lehman Brothers. There is a perception among people now that employability is not the brand of the company they are working for, but what is on their resume. And it is doing things like the U.S. CPA to make themselves more attractive to future employers that helps. We have gone through the too-big-to-fail phase and now people are more realistic, more willing to look at getting qualifications. In the past, people would stick with the same company and rotate between departments without picking up too much expertise. These days, that’s not a good profile to have, so specialization is more the norm in finance and accounting.”
While the U.S. CPA qualification is aimed at finance and accounting professionals, it gives students a broader skill base that can help in all areas of business. “Successful candidates will acquire a professional entry-level proficiency in accounting (mainly U.S. GAAP, but the common global IFRS are also key), US taxation, auditing, and basic business,” Bedard said. “Less obvious [attributes] that are honed are dedication, persistence, and an appreciation for the demands put upon a professional.”
Effectively, candidates are learning a trade that will make them an asset to most companies. The recent spate of corporate scandals in Japan involving irregular accounting and fudged data suggests that workers with such skills would be a welcome addition to Japan Inc.
Takao Asano, a manager at EY ShinNihon Financial Services Office (Advisory), passed the U.S. CPA examination in 2008 and joined the company soon after. “Before I passed, I had the strong idea that this qualification is simply to become an auditor, but this impression changed after I worked in EY,” he said. “The qualification allowed me to become a consultant who knows about business from various perspectives.”
There are, however, reasons to believe that Asano would be ahead of his co-workers in many Japanese offices. Bedard points out that while on-the-job training is gaining traction in Japan as companies look to internationalize operations, many more traditional companies still do not view workers as needing more education after they have signed their contracts.
“Should it change? Certainly for any company that aspires to international success, mid-career retraining is essential,” he said. “Whether it be professional competence in globally recognized accounting standards or just the ability to communicate effectively in English, there is no way around retraining employees—unless you go and hire new ones with those proficiencies. Given the labor laws of Japan, this latter approach is not really an option.”
Those laws seemingly remain untouchable. When Prime Minister Shinzo Abe came to power, he talked of a more flexible labor market, but soon backed away from the idea of tackling the system. IBM Japan then showed that the courts are not budging. It dismissed with little notice five employees in 2012 and 2013 as part of a broader plan to get back on track under the leadership of President Martin Jetter. The employees sued and won. The courts said, “Despite certain signs of decline in their job performance, the employees were dismissed without being given a proper opportunity to improve their work operation, thus making the dismissal irrational.” The five had their dismissals nullified and IBM was ordered to pay their full wages for the time they were not in the office.
Stories of staff with no real responsibilities, staying at work because they cannot be fired—but with little to do — permeate the bars of Tokyo when employment law, Japan’s efficiency, and the like are discussed. Mid-career training, however, is rarely mentioned. Asano, believes training has the power to change the way people work, which could give the economy the boost that the government promised and failed to deliver.
“The biggest benefit [of doing the U.S. CPA] was not the actual qualification, but the self-confidence gained from the study process to pass the exam — a long-term goal that needed constant effort,” Asano said. “Now, I believe that anything can be achieved if you plan and put effort into it. I think having this kind of mind is very important in your daily life as well as in how to progress along your career path.”
Custom Media publishes The Journal for the American Chamber of Commerce in Japan.© Japan Today