employment practices of Japanese companies
Employment practices
Japanese companies have the following unique employment practices.
1. Aggregated new graduate recruitment
2. Job rotation
3. Seniority system
4. Lifetime employment
1. Aggregated new graduate recruitment
Many Japanese companies have a unique system of hiring new employees
direct from universities and vocational schools. This is called “new graduate
recruitment”, as opposed to “mid-career recruitment.” Some major
corporations hire hundreds to thousands of new graduates all at once. In
general, new graduates who join a company together in April and are then
trained together form a close bond. Even after they are assigned to different
departments, they often keep strong connections for many years.
In recruiting new graduates, Japanese firms prioritize individual potential
over skills and experience, because new employees are assigned to each
position after they have actually joined the company. It is common that
major companies offer business training to their employees, and some
training periods last for the whole first month. New graduates don’t need to
have any experience beforehand due to this extensive training, but the on
the job training period may be boring if you are either ambitious or a quick
learner.
2. Job rotation
There is another unique culture to Japanese companies which is the
process called “job rotation” in which regularly companies transfer
employees to different departments every two or three years. For instance,
after being initially assigned to a sales department, they could be
transferred to the product development department, and then to the human
resources department after that.
By experiencing various positions due to the job rotation system, employees
can understand the overall business of a company and also have a stronger
internal network among various departments within the company, making it
easier to work in the future.
On the other hand, in the job rotation system, you may not be able to have
enough time to build your experience in a certain position and it will be
difficult to acquire specific skills and expertise. This means it may put you in
a hard situation to change your career later on if you require specific skills
for a certain position. From the standpoint of corporations, the job rotation
system is for decreasing the rate of turnover of their employees and
increasing the likelihood that the employee will stay at the company for
many years, recouping the investment the company made in training the
employee.
3. Seniority system
In other countries, a merit-based system is common which determines an
employees’ position and a compensation relative to their skills and
experience, regardless of age. On the other hand, Japanese corporations
usually adopt a “seniority system” which evaluates a hierarchy and a
compensation system according to their year of employment in that
company.
Regardless of their abilities and achievements, employees that join a
company at the same time usually receive the same amount of salary.
Although it can lead to a loss in motivation, salaries and titles steadily go up
a rank each year they continue to work for their firm.
However, some firms have abolished the seniority system recently due to
the change of the economic environment, and have switched to a merit-
based system. As a matter of course, there are no such cultures in start-
ups.
4. Lifetime employment / Retirement system
Japanese companies have a custom of a “lifetime employment” where you
are guaranteed a job at a company until retirement age. As it is difficult to
keep elderly employees on due to their reduced work capacity, many firms
have a “retirement system” which sets a retirement age. It is generally at 60
or 65 year old.
Also, it has recently become more common to switch to another company
from the first one. It is now not that rare to find people who have changed
jobs once or twice in their twenties or three times by their thirties. Except in
some of the major corporations, the lifetime employment system is
becoming less and less common in Japan.
