Recruitment Trends in Japan

Abstract

This paper examines recent recruitment practices in large Japanese companies. It was found that many large companies have adapted recruitment practices in varying degrees to deal with the changing economic environment. These changes include increasing the number of hires, diversifying hiring conditions, extending the recruitment schedule, and dealing with labor turnover issues. The implications of these changes and the impact on companies and university students are then discussed.

Keywords: Recruitment, Personnel Management, Japanese-Style Management

Introduction

Over the past decade, Japanese companies had to adapt their management practices to deal with the changing economic environment. Recently, in many companies, a large number of older workers were starting to retire just as sales and profits were improving. Also, an increasing number of young employees have been quitting their jobs within a few years of being hired. The issue of employee-company mismatch has become a serious concern for many companies. These factors have led many companies to reassess their various management practices such as recruitment.

This paper focused on recent recruitment practices in large Japanese companies. Although it is only one part of the personnel management system, recruitment provides insight into understanding the overall management system, and in particular, issues Japanese companies are facing and the amount of change taking place. Compared with other personnel practices in Japanese companies, information relating to recruitment tends to be more openly available from companies and in the media. Information was obtained using company data, newspaper articles, company surveys, and government related data such as white papers.

This paper examined recent recruitment practices taking place in large traditional companies. These large companies tend to be the trend setters in terms of personnel practices in Japan. Small and medium-size companies in Japan tend to emulate theselarge company management practices. Practices in foreign companies and newer information technology companies although informative may not be as representative of the majority of Japanese company practices.

This research concentrated on the recruitment of university graduates. University graduates have been regarded as the core company employees and future company managers. One trend beginning in the 1990s was the hiring of more non-core employees such as part time, contract and workers from temp service agencies and reducing the number of full-time employees. in recent years, there has also been an increase in the number of mid-career and foreign workers being hired by Japanese companies.

Traditional Japanese Recruitment Practices

The recruitment practices used in Japanese companies in the 1970s and 1980s was viewed as having some unique characteristics. Recruitment in large Japanese companies was systematic and based on a specific year long schedule. This early recruitment process is often referred to as 'aotagai' (buying rice before it is harvested since students were recruited far in advance of graduation. Recruitment was seen as the beginning of a long-term relationship between the company and individual.

University graduates were hired as core employees. Preference was given by companies to students from prestigious universities. Companies tended to place emphasis on personality,motivation and communication skills as selection criteria. in the social science area,little emphasis was placed on what was studied in university or on the specific skills or experiences of the candidate.in the natural sciences, in particular, students were often recommended to companies by their professors.

The recruitment season usually began in April when a student entered fourth year. The applicant would have to pass a number of written tests and interviews. The interviews were regarded as the most important part of the selection process. During this process, students were given little input with regard To their future job or work location.

After this process was completed, an advance agreement of employment was reached with the applicants. This advance agreement of employment with applicants is still used by companies today. These students would then all start together the following year in April. Recruits would join a company without knowing which position or department they would be joining.

During the 1990s, the Japanese economy went into a prolonged recession and this impacted the recruitment practices in many companies. To deal with the recession, companies were forced to cut labor costs. One way this was done was to hire more part-time workers and reduce the number of full-time employees. This was a big change from recruitment practices in the 1980s when companies actively increased the number of full-time employees.

Recent Recruitment Trends

3.1 Companies Increase Hiring

Over the last five years the overall economy has been recovering and many companies have seen their sales and profits rise. As well, companies have been concerned about the increasing number of retirees. Japanese baby boomers have started to retire in 2007. Companies have been looking for replacements for these employees and also planning for the future. These factors have led companies to increase the number of recruits from universities in 2007. These numbers were similar to the number of new recruits hired in 1990 at the peak of the Economic Bubble.Recruitment had become a sellerrsquo;s market.

Many large companies have been increasing the number of recruits for four consecutive years. In 2007, around 44 percent of the companys surveyed indicated they were going to hire more than the previous year. 47 percent of the companies stated that they would be hiring about the same number as last year. Of

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