LAST NIGHT WE HELD OUR FIRST SEMINAR TO DISCUSS FACTORS BEHIND JAPAN’S #1 RANKING AS THE WORLD’S MOST DIFFICULT MARKET TO RECRUIT IN.
Given the bilingual audience we presented in English and the content was well received. Most attendee’s in fact were seeking exactly the kind of data points we shared in order to explain the Japan challenge to their regional and global peers.
Let me share some of the data points here:
Registrations included mainly C-level business leaders and HR Directors, as well as Talent Acquisition leaders, mainly from large global companies but also several startups. Most cited that they were seeking valuable information to share with their regional and global peers to help explain their hiring challenges in Japan, and the feedback on content was overwhelmingly positive.
Last year Japan had it’s highest (worst) ever rating with 86% of companies citing hiring difficulty here. The difference between Japan and China is incomparable, and while other countries have challenges, no country is as difficult as Japan.
Since April 2016 the Jobs to Applicant ratio in Tokyo has been over 2 jobs per person. If we consider some of the following data points we suspect the reality is far more severe for highly sought after young, bilingual, and high skill talent.
While LinkedIn is only one source, it is the de facto standard within the industry and this image serves as a good illustration to show how hard recruiters have it here. So much talent is simply not to be found on LinkedIn.
We often have hiring managers demanding highly fluent spoken English yet only 10.7% of TOEIC test takers achieve that level in the spoken test. While 1 in 3 people can read and write English with perfect fluency we need to ask whether so many employees really need to have “conference call” level spoken English. This will of course depend on the job.
Japan has a median age of 46.9 years, which is only surpassed by Monaco – a retirement home for Europe’s elite. It goes without saying that the more mature an industry is, the older it’s workforce and outside of IT and Healthcare the workforce in all industry sectors have an average age over 45 years. Sub-sectors also differ greatly and as examples, if we compare the semiconductor market, enterprise technology market and digital/online market that saw peak expansion in the 1990’s, 2000’s and this decade, we suspect their median ages are more likely to be 50, 40 and early 30’s, respectively. Large clients hire new graduates to solve this problem but for startups the problem is serious. They need to manage their brand in the marketplace in order to compete.
While this data is from the IT industry, ITSS measures a wide range of skills including marketing, channel management, solution selling, consulting, customer service and more. This data is likely therefore quite relevant to other industries. The easy way to understand this slide is that no client will pay an agent to introduce someone to the left of the red line. Clients all seek high-class through to world-class skills and that leaves just 26% of the workforce. By hiring younger, less skilled people that show “potential”, the emphasis should be put on providing excellent training and development to ensure their growth. For disruptive startups this is even more important given the lack of local skill and experience during their market-creation phase. Bringing skill from regional or global offices to Japan for an extended period or sending Japanese staff abroad to up-skill, have been seen to work for some clients.
With Japan’s tradition of “lifetime employment” in the post-war period we have an average length of service 3 times longer than the US. Almost half the workforce is locked up and unavailable, while just 1 in 12 people (8%) actually changed jobs in the year previous. Again this contrasts to the US labour market by a factor of 3 times. All companies – domestic and global – are fighting for this 8% and the employer brand is critical to even get the conversation started.