Japanese Culture and its Impact on Japan HR Practices: An Overview

As a company exposed to global, regional, and local markets on a daily basis, ChapmanCG has a unique position in the market to facilitate harmonisation across these three levels of business management. The following article focuses on a local market that can often be in dissonance to regional and global HR philosophies: Japan.


What You See Sometimes Isn’t What You Get

Having lived and worked in Japan for almost a decade, I’m now married to a Japanese, have learned enough Japanese to read a newspaper, and yet still feel that I've grasped just the tip of the iceberg in terms of understanding Japanese culture. As a case in point, I want to share a story about one of my ex-coworkers, and a good friend for whom I had a lot of respect. This colleague was dedicated, always hungry to improve himself professionally, and extremely well organised. He was one of those people who had a place for everything, and everything was in its place, and his workspace contained only necessary items, or those designed to maximise efficiency. He was also well presented, dressed neatly and held himself out with quiet dignity — I referred to him as the modern day samurai at the office.

Throughout the years of our working relationship, we seldom spoke to each other until one day, having joined the same team, we ended up occasionally going out for drinks. I didn't notice on the first few occasions, but after many such evenings we began talking about deeper issues involving family and work, and I got to hear the full extent of his disappointments, insecurities, and dissatisfactions. It was at this point I realised that I was experiencing what they call tatemae and honne, the difference between someone’s outward appearance/face and their internal true motivations, thoughts and emotions. We sometimes see this in Western culture, but it's never as extreme as you find in Japan, and almost never takes this long to ‘crack the nut’.


C&B in Japan



From this basis of understanding, we can dig deeper and explore how this relates to other HR matters. From a C&B perspective, traditional Japanese companies still largely operate in a seniority model where wages and benefits increase proportionately with age and length of service. Managers and their subordinates often go drinking and attend each other's weddings - the subordinate’s loyalty is gained, and in return they feel ‘protected’ by their superior. We also see this trickle into other tangible benefits, such as housing allowances that come as standard and are unrelated to performance. Due to the recent financial distress of major Japanese electronic companies like Sony, Panasonic, NEC, and Sharp, these organisations have had to offer severance packages of up to two years’ full time salary. Japanese labour law heavily protects the employee from termination, so this is the only way that traditional Japanese companies can restructure and downsize. Although the concept of lifetime employment is passing, the compensation systems are reminiscent of the past. This trend is less pronounced in multinational companies operating in Japan. However, it’s still the case that employees are much more protected, both by the law and by cultural norms, and severance packages can still be very large compared to other markets around the world.



Recruitment in Japan



The notion of lifetime employment was always something reserved for white collar workers. Blue-collar workers could often jump from company to company for nominal pay increases. White collar recruiting on the other hand was always traditionally done at the new graduate level, with selection solely based on education. A degree from one of the top three universities - Keio, Waseda, and University of Tokyo - would guarantee life-long employment at the company of your choice. A degree from the second tier MARCH universities - Meiji, Aoyama Gakuin, Rikkyo, Chuo, and Hosei - was good enough to have second pick. Mid-career recruitment is a relatively new concept in Japan, and as such we have seen a much slower development in modern recruitment methods such as direct sourcing and social media usage in Japan.



We often get asked by overseas decision-makers, Why is the talent pool is so small in Japan? With the population of 130 million people, surely you can find someone for my team this week. Well, for one, there's a language barrier. According the EF EPI (English Proficiency Index) Japan is ranked behind smaller nations such as Singapore and Malaysia. This can give the wrong impression. In truth, reading and writing scores are high, but Japanese professionals are extremely hesitant to speak in English. The education system in Japan adds an extra barrier to this language barrier. There's a concept of ‘wa’ (harmony) throughout Japanese culture, and as such the curriculum at public schools can often progress only as fast as the slowest learner. Furthermore, there isn’t a culture of developing opinions, questioning the status quo, or debating an argument. With these language skills and communication skills in top demand at multinational companies, the local talent pool is often found lacking.



Talent Management in Japan



There's a Japanese term tateshakai, which literally translates to ‘vertical society’. In relation, the words senpai (one's superior or senior), kouhai (one's junior or subordinate), and doukyusei (someone of the same age) are used on a daily basis and exhibit that age and seniority are still very important. In fact, there's a completely different set of verbs and conjugations that one must use, depending on how your status relates to the listener’s. It's a very difficult environment to develop talent, as it can be seen as anti-competitive, and there's no room to grow unless your superior leaves for another role. Over time, we see this become de-motivating, and leading to employees living paycheck to paycheck trying to earn overtime along the way, instead of pursuing their dreams. In spite of this dissatisfaction, it is still seen as honourable to allay one's personal desires for the wellbeing of one’s direct manager.



To end on a note of encouragement, not all Japanese organisations are still like this. Many recognise that the values that have helped Japan in the past are now no longer competitive in a global context. Hideki Naoi from Japan's top education company, Benesse Holdings, states, “Some Japanese company Talent Management practices are great. In one Japanese automotive company, they have a few veteran HR employees that do not come from HR but rather sales, manufacturing, or other back office functions with a diverse background to engage with the employees, identify top talent, and monitor their growth. This has helped to elevate the awareness of these modern HR practices.” It will be exciting if more Japanese organisations transition into this hybrid model.



In Summary



The culture in Japan has been shaped for thousands of years to be based on deference to seniority, conformity and, in more recent times, lifetime employment. The world is changing fast, and Japan’s business environment is changing accordingly, but it will take time. Regional and global decision-makers should be prepared for cultural sensitivities and other hurdles to stand in the way of the speed of reform.