Hiring in Japan: Not Easy for Outsiders

Expanding a business and/or hiring talent in a new country even generally has its challenges, but hiring in Japan takes it to a new level. This vibrant nation offers a wealth of opportunities, but it also presents unique hurdles, especially when it comes to hiring talent. For businesses new to Japan, understanding the cultural, legal, and economic factors that shape the hiring landscape is crucial. In this blog post, we will explore the complexities of hiring in Japan and shed light on why it can be a daunting task for foreign companies.

Here are some of the key factors that make hiring in Japan tricky for outsiders:

1. Cultural Nuances

Japan has a deeply ingrained native culture that greatly influences business practices in the country, including hiring. The concept of “lifetime employment” has been prevalent in Japanese companies, where employees are expected to remain loyal to their employers throughout their careers. This tradition creates a sense of stability and commitment but may make it difficult for new businesses to attract skilled employees looking for new job opportunities.

2. Language Barrier

The primary language used in business interactions and communications in Japan is Japanese. While English proficiency is increasing, especially among younger generations, many business transactions and official documents are still conducted exclusively in Japanese. For foreign companies, overcoming this language barrier can be a significant challenge when searching for suitable candidates and navigating the hiring process.

3. Complex Labor Laws

Japan’s labor laws are highly detailed and rigid, which can be overwhelming for companies unfamiliar with the Japanese legal system. From employment contracts to working hours, termination procedures, and benefits, adhering to these regulations requires meticulous attention to detail. Even a minor oversight can lead to legal disputes and damage a company’s reputation.

4. Hierarchy and Company Image

Japanese society places great emphasis on hierarchy and respect for authority. For new businesses, establishing a positive reputation and corporate image can be an uphill battle. Building trust with potential employees and customers may take time and effort, as they may prefer established local companies with a proven track record.

5. Recruitment Practices

The recruitment process in Japan is unique and can be vastly different from what new businesses are accustomed to. Japanese companies often prefer hiring through job fairs, referrals, or recruitment agencies. Networking and personal connections play a crucial role in landing positions, making it challenging for foreign companies to tap into these channels initially.

6. Candidates’ Evaluation of A New Employer

Japan’s employment market in general places high importance on brands and recognition in both directions. Japanese employers place high importance on academic achievements and brand recognition of universities, and conversely, the candidates place high importance on a prospective employer’s brand recognition. This latter factor can pose hiring difficulties for new businesses that may not be well-known or established in Japan.

7. High Fees of Recruiters in Japan

Last but not the least, recruiters in Japan charge much higher fees than the rest of the globe. Their fees tend to be a high as 40-50% of candidates’ annual compensation whether the candidates are at a senior level or not – this is due to many of the factors mentioned above and always gives a “sticker shock” to outsiders. Its rather rare to find a recruiter in Japan will charge less than the above fees, but we at Tarmack are happy to be one such platform 🙂

Conclusion

Expanding into Japan can be a rewarding opportunity for businesses seeking to tap into its thriving economy and skilled workforce. However, the path to successful hiring is paved with unique challenges. Understanding and navigating the cultural, legal, and business landscape is crucial for new companies aiming to establish themselves and build a strong team in Japan. With careful planning, adaptability, and a willingness to embrace cultural differences, businesses can overcome these difficulties and flourish in the Land of the Rising Sun.