Graduates attend a job fair in Tokyo. Photo: REUTERS file
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Japanese firms slowly moving away from old recruitment, pay practices

27 Comments
By Junko Horiuchi

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Japan's unique, long-held employment practices characterized by annual new-graduate recruitment, lifetime jobs and seniority-based pay rises have helped support economic growth in the postwar period.

Um, do they actually believe the above quote? If this is so, what happened in the last thirty years to cause the economy to slump and stall? At present, 60% of the workforce are on semi-permanent or part time contracts with low salaries. The first sign of being delusional is believing your own BS. The economic growth in the postwar period was spurred along by mass-production of mostly copied technologies for the international market. However, Japan did not have a monopoly on these technologies and these international markets have been taken by other countries leaving Japan with table scraps and a dying economy. Recruiting zombie yes-men to enslave for the rest of their lives is not going to cut it in the new world. Japan needs innovation and serious education for it reclaim its place in world economies.

14 ( +19 / -5 )

I was at several stores yesterday and being the person I am and talk with the public, I asked this very question: Do you feel your getting equally compensated for your work? If so what needs to change and how? Well low and behold 7 our 10 people right off the bat responded saying they are contract workers and make far less as companies do not want to hire regular employees who are older than 65 but still working and tying up costly benefits. One person pointed to a well known talent on TV who is highly paid, and if he was to quit would make room for 6-7 new employees. In the age brackets of 19-25 90% of those youngsters I talked to said they had 3 part time jobs and 2 were attending online university studies. WOW...the main reason: no money at the jobs available. The changes are long overdue.

9 ( +9 / -0 )

"In a company, not everyone is a cleanup hitter. We need to make sure that those who may not stand out but still contribute to the company are rewarded with pay rises,"

Yeah what about all the managers in Japan that simply order all of their staff to do the work, stay longer at work which means the staff stay longer and also drag people out drinking after work. From my experience all seniority based pay does is increase the prestige and pay of a position whilst relinquishing all of the work to other people.

continuing to request a uniform monthly base pay hike for all workers, seeking a 4 percent increase, while calling for efforts to tackle what it considers the more urgent issue of resolving the wage disparity between regular and nonregular workers as well as between small and large firms.

I would agree that the minimum wage needs to rise across the board as well as well as the abolishment of sham contracting that sees people never hired in a fulltime capacity.

Unions in Japan need to be far more militant in pushing for changes but at the same time there seems to be a disconnect in the legal system that prevents people from taking legitimate strike action. Recently employees from the Japan Construction and Transport Solidarity Union – Kansai Ready Mix Concrete Branch were arrested for taking part in a strike for better pay and conditions.

The government can't on one hand call for reform and then allow people to be arrested on the other hand for pushing for that same reform.

10 ( +11 / -1 )

Paying just 850 yen per hour and asking the elders to work?? More over the power harassment ... It is not going to work in Japan.....

7 ( +7 / -0 )

In a company, not everyone is a cleanup hitter. We need to make sure that those who may not stand out but still contribute to the company are rewarded with pay rises,

There is historic tightness in the labour market. This is not the time to be protecting the less capable.

It should be remembered that all you have to do to become less capable is join a company that does not suit you. In Japan, there is a high chance you will be stuck there for life.

2 ( +2 / -0 )

How about ending the nonsense of paying new hires a lower "training" rate of payment, even when they aren't new graduates or new to the field? I've sat at conference tables with Sr. Vp's of HR and CEOs of Japanese companies while they tell me how my 15 years of professional experience would be a vital asset to their company...and then proceed to tell me I need to work for the first 3 months at ¥1200/hour, or ALL new hires have to start at the same salary, even we are doing different jobs and have different levels/years of experience. NONSENSE.

9 ( +9 / -0 )

Japan is finally beginning to rescind feudalism.

-2 ( +1 / -3 )

 I need to work for the first 3 months at ¥1200/hour, or ALL new hires have to start at the same salary, even we are doing different jobs and have different levels/years of experience. NONSENSE.

Yeah the concept that if you move to or start at a new company that you must then start from the bottom is absurd. Again you can't hope to compete on a world stage nor breed innovation with that kind of system.

Motohiro Morishima, professor at Gakushuin University, noting that the younger people tend to place more emphasis on work-life balance than older generations.

I love it how the older generations claim young people put more emphasis on work life balance. I think it would be more realistic to say that more women are entering the workforce and more men want to actually spend time raising their children and letting their wives have meaningful work lives as well compared to the previous generation that expected all child rearing to be done by the female.

Its not selfish to demand reasonable work hours and pay based on the work you do.

6 ( +6 / -0 )

Maybe it's all about pink slip workers and hire cheap "tourist" workers from other countries..

2 ( +2 / -0 )

If Japan wants real talent it will need to pay... the usual 10,000 yen x age = monthly salary isn't going to cut it anymore.

4 ( +4 / -0 )

As stated above, the majority of workers are on semi-permanent or part time contracts with low salaries, minimal benefits and zero job security with constantly working under threat of being fired for things like, getting sick or pregnant or, having some kind of life outside the workplace. My Mrs was on one of these yearly evaluated semi-permanent contracts when we lived in Japan. Her base salary was ¥250,000 per month, which included up to 40 hours per month of overtime. They had a company meeting once a week that was held after hours and not during normal working time. These semi-permanent contracts only last 3-5 years depending on the contract. After that period the employer must put them on full time or give them the flick. Over 80% are fired at the end of their term. It’s bloody criminal that they can get away with this sham!

Now, we live in Australia. The minimum wage is $19.50 per hour, which is nearly double that of Japan’s ¥930 per hour. However, the cost of living in Australia is not double that of Japan, which means people are not being enslaved by unscrupulous employers. Japanese work ethics are a sham and nothing short of slavery

10 ( +11 / -1 )

Make your bed you sleep in it! Japan INC created this system with the belief that it would support the country for like forever.

.

3 ( +4 / -1 )

But many major Japanese companies have begun to question...

As with everything in Japan, too little too late. The future is not bright for companies or employees in Japan and they only have themselves to blame.

3 ( +4 / -1 )

I agree with the other posters that most of these "reforms" are made for the benefit of the corporations and government and not for the workers themselves.

People mock the old-fashioned seniority-based system that allows less-competent veterans to continue to make money, but I think it's better than what we seem to be moving towards: wages lowering everywhere except for the top 1-5%, no more job security, unrelenting pressure on employees to "improve" or face pay cuts. Everybody seems to be implementing more frequent and more extensive employee evaluation systems nowadays, and building long overtime hours right into the company rules.

Things are getting worse for workers, not better. Every time I see a report about "reform" for the labor system, I just assume that something sneaky will be put in that makes things worse for the salarymen living under it.

3 ( +3 / -0 )

YubaruToday  09:09 am JST

Make your bed you sleep in it! Japan INC created this system with the belief that it would support the country for like forever.

Too right! The trouble at the heart of this (and the reason why they'll never be able to change, or will change to slowly as to never be competitive) is culture. I don't believe the culture will ever change enough to help them escape these hazing, slavery business practices.

3 ( +3 / -0 )

It's about WAY time! However, as like many have mentioned here on this blog, companies have to look at the cost of living and factor in and increase the minimum wage to support employees here. At the moment, minimum wage here is hardly enough to live on, more less to reinvest in the Japanese economy. There are other things that Japan needs to move forward with, like English Education, Women's rights to pursue their lives and career for themselves, rather than to mooch on their hubby's success. These things and other things will take a long time if Japan's society continues to act this way. Time to move forward, Japan and Japan Inc.

1 ( +2 / -1 )

"The economic growth in the postwar period was spurred along by mass-production of mostly copied technologies for the international market."

Correctissimo.

They used to copy everything form Australia, that industrial and technological powerhouse.

Santa ignorancia.

-3 ( +1 / -4 )

My son worked part-time at 7/11 and I thought his getting 1000 yen/hour was pretty generous considering I flipped burgers at Burger King in high school for 2.25 dollars/hour. In any case, he didn't like it, especially rude customers and having to show up early for unpaid preparation. He then taught at a juku for like triple that amount and I strongly suggest that he become a professional or start his own business.

1 ( +1 / -0 )

My son worked part-time at 7/11 and I thought his getting 1000 yen/hour was pretty generous considering I flipped burgers at Burger King in high school for 2.25 dollars/hour. In any case, he didn't like it, especially rude customers and having to show up early for unpaid preparation. He then taught at a juku for like triple that amount and I strongly suggest that he become a professional or start his own business.

Doing math using assumptions, I'm guessing you were in high school around 1975. With inflation, that 2.25 is a little over 11.00/hour in today's money.

7 ( +7 / -0 )

"In a company, not everyone is a cleanup hitter. We need to make sure that those who may not stand out but still contribute to the company are rewarded with pay rises," said an executive at the Japanese Electrical Electronic & Information Union, who asked not to be named.

That sure sounds like the old way of thinking.

calling for efforts to tackle what it considers the more urgent issue of resolving the wage disparity between regular and nonregular workers

Agree, but this demands simply labour law reform. Abolish the systems that create two classes of worker. Put all workers on a level playing field, and let the labour market set wages accordingly.

This has the potential to help boost Japan's economic growth too, through creating the right incentives for workers. Being able to slack off and never be fired for that, doesn't.

as well as between small and large firms.

That's silly. Individual companies should be free to pay whatever they like, or fail to attract labour and suffer for it. Letting crap companies flounder and die is the way to go.

0 ( +0 / -0 )

The Japanese old school business "model" has to change if it wants to effectively function competitively in the world market. I'll never forget how Japan's military industry lost out on a deal of selling equipment to France because of pointless meetings amongst themselves while France upon deciding it was taking too long went elsewhere.

3 ( +3 / -0 )

changing verrrry slowly. These companies think giving someone a 3000 yen per month raise every year actually means something.

1 ( +1 / -0 )

Some commenters here need to consider that Japan is culturally very diiferent. Things done within the country are not even comparable with ‘international’ interpretations. As an example, meetings held within companies are not opportunities for employees to give their opinions on topics raised. Instead, it is an occasion in which employees listen to those above them tell them their directives. Employees attending these regular meetings are expected to be quiet. So, workers in society in Japan are very much put in their place, and hierarchical systems continue to be the controlling structures within Japanese companies.

1 ( +1 / -0 )

I started my IT career as a software dev in a japanase company, after 2 and a half years my monthly salary had raised 10,000 yens....I switched company and nearly doubled my salary...

I told my superiors, beforehand, that a software dev with 2+ years experience is worth more on the market than an antry level + 10,000 yens. But I just get the usual "shouganai", that's the company policy, blabla. Yeah well shouganai for you because you lost an employee.

7 ( +7 / -0 )

FendyToday  03:29 pm JST

Some commenters here need to consider that Japan is culturally very diiferent. Things done within the country are not even comparable with ‘international’ interpretations. As an example, meetings held within companies are not opportunities for employees to give their opinions on topics raised. Instead, it is an occasion in which employees listen to those above them tell them their directives. Employees attending these regular meetings are expected to be quiet. So, workers in society in Japan are very much put in their place, and hierarchical systems continue to be the controlling structures within Japanese companies.

Spot on and one of the central reasons Japan can never improve from their current situation.

3 ( +3 / -0 )

Before I left Japan after the earthquake, I was an HR consultant specializing in innovation and Executive Search.

I net with executive leadership and sold them in the idea of performance based pay and did 3-5 day trainings where I implemented innovation training exercises designed to get team members to think outside the box. These were customized for each company, so that any truly exceptional ideas could active implemented by the companies. I encouraged leadership to reward the innovative teams with bonuses and raises for their exceptional effort.

Working with these different companies gave me insight into whether they were truly committed to reform or just playing along. By giving these workshops, I got to meet many very talented professionals and, in turn, if their companies didn’t reward their brilliance, I was able to find them opportunities at other more progressive firms. It was a quite lucrative and rewarding run. I miss my time in Japan and it looks like things are getting ripe for a systematic change.

1 ( +1 / -0 )

This is all Rubbish, Japan has quickly adopted the disposable Employee culture of the West. The problem is, that Universities, and Japanese Pre-University Schooling, has not caught up with this change.

0 ( +0 / -0 )

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