Economy, Culture in Transition : Job-Jumping Loses Its Stigma for Japanese

Nineteen years ago, when Texas Instruments was forming a Japanese subsidiary, it placed help-wanted ads in the large daily newspapers here, hoping to recruit experienced engineers. It got no takers.

The thudding silence was a shock to the Dallas firm. Texas Instruments was respected, and the working conditions it offered were comparable, even better, and the pay usually higher than at Japanese firms. But TI’s incentives could not loosen the cultural ties that held professionals to their companies--the ideal of lifetime employment and the stigma that fell on a worker who voluntarily switched companies.

It was TI Japan’s first lesson in becoming a Japanese company. It dropped the recruiting effort, hired mostly college graduates and built its staff from the bottom up; only occasionally did it snare a maverick willing to risk a job change.

Byproduct of Globalization

Nowadays, Western companies setting up shop in Japan--and there are plenty--don’t have nearly the problem hiring experienced Japanese workers that Texas Instruments did. Job-jumping is becoming more acceptable, if not commonplace--a byproduct of the globalization of Japan’s economy and one aspect of the changing face of its labor force.

Japanese workers are beginning to have, and exercise, more freedom in determining their own career paths. The big corporations are making adjustments in their personnel practices and management techniques. The underpinnings--a hard-working, dedicated work force that applied the elbow grease in Japan’s postwar economic “miracle” and became the envy of the world--are being loosened.

The changes may look slow and subtle to Western eyes, but to the Japanese, they are dramatic.

“Japan’s industrial structure has changed, and this is leading to changes in the employment structure. Now those changes are coming at a drastically rapid pace,” said Makiyo Mizobuchi, executive vice president and director of Recruit Jinzai Center, Japan’s largest recruitment agency for job-changers.

Effect of Other Cultures

Some of the sociological and economic changes that have been ricocheting through Japan’s employment practices in the past decade have been accidental--the result of other cultures rubbing up against and leaving their impressions on the surface of Japan’s.

Some of the changes have been forced: By reaching deeper into Western markets, Japanese industries also have had to come to grips with the ups and downs of the worldwide economy.

The ideals of lifetime employment and near-zero unemployment are fading. Japan’s declining industries, such as steel, shipbuilding and heavy chemicals, are laying off or forcing into early retirement thousands of employees who thought they were secure for life. Other workers are being pushed into jobs 180 degrees away from what they have done for years or into new spinoff ventures.

From steel-making to paper, there is “massive redundancy” in employment, a government official recently warned. Companies in Japan’s declining industries “have 353,000 employees with nothing to do,” he said.

More women are entering the work force and staying there longer. Japan’s population is aging, and that poses a challenge to the traditional seniority system, in which promotions are based primarily on length of service. As the baby-boomers approach middle age, they are bunching up at the narrow doors to middle management; there often just aren’t enough executive-level jobs for all the people who can lay claim to them by virtue of seniority.

Employee recruiting is moving into high gear as Tokyo emerges as one of the world’s top financial services centers, drawing a huge influx of Western companies. Those companies can offer Japanese locals two and three times the normal pay scale and still find it cheaper than bringing in their own employees.

There is another reason Western companies hire local Japanese employees. Even though Japan is lowering the official barriers to foreign interests, many of the cultural barriers are still there, or are perceived to be there.

Securities and banking firms setting up shop in Tokyo want to hire Japanese who not only have the right business skills, but who also know the environment and culture. So do the marketing and advertising companies, and especially the high-technology companies that for so long have sought access to Japan’s ravenous markets.

Leading the Trend

Those companies have been at the forefront of the recruiting boom, experts say, and the practice is spilling into Japanese companies.

“Because of the recent internationalization of Tokyo’s financial markets,” said Mizobuchi, “even such conservative companies like Mitsui Bank and Mitsubishi Bank have started to recruit experienced workers, not only new college graduates.”

All these events have not gone unnoticed by younger generations of Japanese workers, who are expressing the new attitudes about lifetime employment in the purest fashion: They’re changing jobs even when they don’t have to. These younger people, often called shinjinrui (which translates as “the new human beings” or “the new species”) by their elders, are willing to trade security for jobs they feel are more suited to their talents and ambitions, say managers at many of Japan’s leading companies.

“Work or job is not a duty any more to younger people. It is ‘performance’ for them,” said Keisuke Arima, a job-changer himself who left the banking industry to become an executive at Recruit Jinzai. “They are not eager to change, but rather they don’t find any big obstacles to change jobs.”

When they’re ready to switch, they often find new jobs through Recruit Jinzai and the 80 or so other recruiting agencies working in Japan. Ironically, one of Recruit Jinzai’s competitors is a subsidiary of Mitsubishi, which began its lifetime employment practice around the turn of the century.

Lifetime Employment Common

It wasn’t until the post-World War II economic boom that lifetime employment became widespread, and today only about 30% of Japanese workers are covered by such policies. Even without such guarantees, however, most Japanese workers join a company with the intention of remaining with it for the duration of their careers. The tradition of lifelong careers with one company has been most prevalent among professionals, in government and academia, and at executive levels of major firms.

Companies like Recruit Jinzai’s parent, the Recruit Group, have long helped Japan’s business community recruit new college graduates, in what has become a spring ritual of mass hiring. But it was only 20 years ago that Japan changed its labor laws to legalize employment recruiting agencies, and few recruiting companies even existed until 10 years ago. The growth in this business--still small by American standards--has come primarily in the past two or three years.

Even now, though, there are only a few exclusively executive-search firms in Tokyo--what would be called “head-hunting” in the United States--and the vast majority of their clients are multinational firms. Japanese companies, say recruiting executives, have not yet fully accepted the concept of head-hunting.

Korn/Ferry International, the largest executive-search firm in the world, opened its Tokyo office in 1972. Business dragged for the first decade. Morgan H. Harris Jr., managing partner in charge of Korn/Ferry’s Pacific Basin division, said: “Our art of search ran counter to the culture. . . . All we do is against tradition.”

Attitudes Changing

“But since 1983 or 1984, and particularly in the last year, Japan and Japanese employees have changed their attitudes,” Harris added. “The things that have been holding the Japanese executive in the lifetime employment structure have been cultural. But now when their jobs are threatened, they’ve got to listen to offers from outside companies.”

Although Japanese companies in Europe and the United States use Korn/Ferry and other search firms to fill positions for their subsidiaries there, Korn/Ferry’s Tokyo office has yet to enlist a Japanese company as a client. “A couple of years ago, I said it would take maybe a decade before we got a Japanese company,” Harris said. “But things have been changing so fast, now I’d say maybe three to five years.”

Recruit Jinzai does have Japanese clients, but the jobs it fills are often at a much lower level than the ones Korn/Ferry handles. Recruit Jinzai and most of its Japanese counterparts rely heavily on matching jobs with job-seekers, rather than aggressive recruiting.

In 1978, Recruit Jinzai’s first year in business, it placed 104 job-jumpers. Last year, it filled 2,306 jobs. It estimates that its nearest competitor filled 500 or 600 jobs in the same time period.

Fewer Than in U.S.

Korn/Ferry, which deals in positions paying $100,000 a year and up, made about 50 placements in Japan last year, Harris estimated, in contrast with the 1,000 or so executive-level positions it filled in the United States.

In addition to the financial, advertising and marketing businesses, high-technology has spurred job-jumping as engineers switch from one high-technology company to another, especially between Japanese subsidiaries of American firms.

“The rapid development of the electronics industry” has helped fuel the increase in job-jumping, said Mizobuchi. “The engineers with the new technologies, new information and new skills are very much in demand by high-technology companies, and those skills are more often possessed by younger people.”

“About 75% of the people who come to us are in the 25-35 age bracket,” he said.

Younger Japanese, who often are exposed to Western thoughts and methods earlier and more fully than their parents were, and especially those who have lived abroad, are the ones most likely to reject the idea that changing companies is a black mark on their record.

Masahiro Miki, a marketing and public relations official for Texas Instruments Japan, is a case in point. When he finished studies in the United States several years ago, he first accepted a job at an American company, Monsanto, then switched to Texas Instruments in Dallas before joining its Japan subsidiary.

Differ From Parents

“My friends and I,” he said, “don’t think of it in the same way our parents did. It used to be that people would look down on you if you changed jobs.”

Recruit Jinzai’s Mizobuchi said: “Changing jobs used to have a very negative connotation. People who changed jobs were regarded as dropouts or seemed unable to cooperate with others, or sometimes people thought (the job-jumper) was not patient enough to stick with one company.

“That’s changing because of the American influence. Younger people have begun to think it’s not so bad.”

But still, for many, job-jumping is an undesirable risk, regardless of how attractive an outside offer may be.

William G. Ouchi, a professor of business management at UCLA who has studied and written about Japanese corporations, believes that recruiters are overstating the changes in the Japanese labor force, which he describes as being “in evolution.”

“It still isn’t easy for an American company seeking a seasoned Japanese,” he said.

Did Not Consider Leaving

Seiji Igarashi, manager of public relations for NEC Corp., a giant electronics firm, twice has been offered higher-paying jobs with other companies. Though he listened to the pitches over the telephone, he did not seriously consider either.

“It just makes no sense for me to think of leaving,” he said. “I have lifetime employment here and a good position.”

It is easier for companies to hire younger workers, because of the tradition of promoting based on seniority. Many companies, though willing to employ experienced workers, find it difficult to bring them in at the equivalent salary or management level. In part it’s a financial issue, and in part it’s because it causes friction with other employees who expect that higher-level jobs will be awarded on seniority basis.

The Hayashibara Group, a family-owned concern based in the Okayama prefecture that has biotechnology, chemical, food and real estate operations, has grappled with that issue. It hired senior-level managers from outside when it began diversifying from its food and confectionery businesses into biotech.

“Sure there was some resistance from the other workers when I first came in here,” said one manager who was hired from outside and placed above longtime Hayashibara employees. “They saw that opening as the only chance they would have to be promoted. But we made it clear that I would be in the department for a few years, and then move elsewhere. And we are all working cooperatively now.”

Freedom to Choose

Hayashibara is one of the Japanese companies making adjustments in its hiring and labor practices, including using a combination of contract hiring and lifetime employment--and giving its employees the freedom to choose. The parent company, Hayashibara Group, is making it clear that no longer will promotions be awarded solely on the basis of seniority, thus paving the way for what it hopes are more ambitious, innovative approaches to the job.

Japan needs such creative approaches to hiring, many Japanese executives contend, to help it cope with the changing cultural values and dynamics of global markets. “Japan must take it for granted that a certain amount of unemployment will continue and that the lifetime employment (policy) must undergo a significant change,” said an official of a governmental agency charged with helping employees make the transition from declining to rising industries.

New business sectors, like biotechnology, are not only helping absorb displaced workers but also are playing a major role in supporting changes in the employment structure.

“It has been only 20 years since supermarket chains were introduced in Japan,” Mizobuchi said. “They have been very successful, largely because they recruited lots of people from department stores” who had retailing experience.

Helped Sony’s Success

Sony Corp., one of Japan’s favorite success stories, was not a part of the established group of large diversified firms when it began its push into consumer electronics, and had to reach out into the labor pool for experienced workers. “The success of Sony depended upon recruiting experienced workers,” Mizobuchi said. Sony is one of Recruit Jinzai’s biggest clients.

Some of Japan’s leading sociologists believe relaxing the rigid employment structure could eventually contribute to other positive changes, perhaps even extending to the education system and traditional approaches to leisure.

If it becomes increasingly possible for employees to work their way up corporate ladders by changing companies, then the immense emphasis now placed on getting that first job will be reduced. Few except the top graduates from the best universities are recruited by the leading companies, and the pressures on students to achieve a high standing begins early. This system, many complain, turns Japan’s youngsters into rote-learning machines and weakens the national university system.

Affects Leisure Habits

Changes in the employment structure also may affect the rigid leisure habits of Japanese. The older, and still prevailing attitude that the company comes first is a factor in discouraging workers from taking full advantage of vacations and holidays. Many skip them completely--a habit that, while a boon to productivity, also dulls creativity, observers in and outside the country contend.

Traditionally, all Japanese take vacation at the same time: during the “Golden Week” celebration and national holidays in late April and early May. Some companies, including the Hayashibara Group, are encouraging individualized vacation and holiday schedules. Most of Hayashibara’s employees still take holidays during Golden Week, though.

Though such traditions die hard, recruiting firms are finding signs that resistance to change is breaking down.

“It takes about three times as much effort to complete an (executive search) assignment in Japan as it does in the United States,” said Korn/Ferry’s Harris. “It’s so difficult to get people to talk about change. But a few years ago, it was 10 times as difficult.”