The JGM BitBlog: Welcome, But Not Really - SIEs and the Traditional Japanese HR System
Chie Yorozu, School of Business, Aoyama Gakuin University, Japan
Have Japanese HRM practices been internationalised or not, in order to welcome more self-initiated expatriates (SIEs)? This is currently a very relevant question for both existing foreign staff and newcomers. If practices have not yet changed, how can they be adjusted so that Japanese ways of working can better suit SIEs? The number of SIEs has rapidly increased since around 2016, and the government passed a law in 2019 to allow more foreign workers to work in Japan. Japan has an urgent problem due to a lack of domestic labour and the number of bankruptcies due to the labour shortage has increased. This has led to that Japanese firms/organisations are extending their retirement age; for example, Honda Motor, YKK AP and AEON CO., have already changed the age to 65. However, there are issues with SIEs, who are expected to compensate for the labour shortage, working under the existing Japanese HR system. If current norms and rules in the labour environment do not fit well with SIEs, there are room for changes to allow a smoother working relationship with new labour from other countries.
The Japanese traditional HRM practice has gained a reputation as unique and very different from the rest of the world, in that it has a strong focus on the long-term development of workers within one company. It is challenging for foreigners to get used to working under this system of lifetime employment with a seniority-based pay system, which still dominates Japanese organisational practices, though there have been some reforms in relatively younger and more internationalised firms. This traditional Japanese system has conventions that are hard for foreign nationals to come to terms with: employees are expected to work until retirement age at a firm, and while they can enjoy much benefit from lifetime security, there are no opportunities for fast promotion. Japanese firms are happy to offer their employees constant training opportunities over time to grow their abilities.
In spite of the cultural expectation for employees to stay with one firm for life, it seems that SIEs often move to other Japanese firms after a few years in Japan. This research collected interview data from both Japanese local staff, including HR staff, and SIEs from China and Vietnam. Workers from these two countries account for half of all foreign workers in Japan. The data from 16 Japanese staff and 40 SIEs indicate that the Japanese traditional HR system pushes SIEs to leave Japanese firms and, eventually, Japan. This means they stay for much less time than Japanese firms expect, as can be imagined based on the Japanese norms explained above. This expectation gap regarding concerns about whether Japanese firms reduce hiring SIEs or whether they are reluctant to come to Japan, suggests the need to adjust the existing system in order for the two sides to work comfortably with each other.
It is important to know why SIEs tend to leave a firm sooner than expected and the findings expressed in the article could lead to ways to reduce the expectation gap.
To read the full article, please see the Journal of Global Mobility publication:
Yorozu, C. (2020), "How do self-initiated expatriates fit into the Japanese traditional HR system? A call for institutional change to achieve mutual understanding", Journal of Global Mobility, Vol. 8 No. 3/4, pp. 291-307. https://doi.org/10.1108/JGM-03-2020-0018