There has been a decrease of 14 per cent in the number of people actively seeking a new placement in Japan, according to Morgan McKinley’s 2019 Salary Guide for Japan.
The guide showed that the lack of candidates and competition resulted in hiring managers taking a pragmatic approach to find the best talent by relaxing industry experience requirements and speeding up recruitment process. This has been done by using online technical aptitude tests and video conferencing for interviews and looking at “non-traditional” profiles. Professionals in finance and IT often had multiple interviews and were able to leverage this to demand higher salaries.
This shortage of talented professionals available in the Japanese workplace has contributed to an increase in hiring non-Japanese nationals in 2018 of which the majority were professionals with at least a business level of Japanese language skills. Another trend was the growing number of companies asking for business-level English proficiency.
However, the guide showed increased hiring of 12 per cent across areas including asset management roles, HR, IT, Finance, Accounting, Professional Services, Sales, Risk, Operations and Middle office. This has resulted in an increased choice over where they work and more competition to secure the best talent causing salaries to rise. Organisations are doing their utmost to hold onto employees in an attempt to stabilise the workforce.
“With the ongoing saga of Brexit and US/China trade tensions, you would be forgiven for thinking that some organisations may have tapered their hiring plans” commented Lionel Kaidatzis, managing director, Morgan McKinley Japan. “In actual fact, the early indications for 2019 would suggest that job volume is holding up well. If anything, it is surprisingly strong considering that it is normally a quieter time of year as organisations work through their hiring requirements for the year ahead. In support of this positive sentiment, a resounding 87 per cent of our client organisations felt that their hiring demands stayed the same or increased over the last six months.”
The emphasis on improving work/life balance in Japanese organisations is popular for working professionals, especially the ability to work from home and flexible working hours. The government passed a work reform bill which will come into effect in April 2019 aimed to introduce a limit to working hours capping them at 100 hours of overtime per month. However, a significant proportion of workers will be exempt from this cap and it is unlikely to have any impact on most working professionals.
A survey by Morgan McKinley showed that half of organisations that responded have a diversity strategy in place for recruitment processes. The ‘Big 4’ firms have hired more consultants to meet client demand due to the restricted working hours for junior staff and flexible working practices. However, many companies that do have a strategy in place, struggle to keep a gender balance particularly when it comes to placing women in leadership positions.
Lionel Kaidatzis, managing director, Morgan McKinley Japan continued, “For job seekers market conditions were favourable, especially for those with language skills and experience in financial services. Most professionals did not see large salary increases, but had the advantage of being able to choose from an array of jobs. Organisations need to be flexible to accommodate candidates’ needs and drive processes with a sense of urgency. Flex-time and work-from-home policies are becoming the norm and organisations should advertise their flexible working practices. If you don’t have it in place, we highly recommend looking at your workplace strategy.”
The most significant industry trend to impact the industry remains the development of new technologies, most notably Artificial Intelligence. With organisations doing their best to become more efficient while reducing cost and maximising profits, many companies are analysing how these new technologies can be best deployed. With the profit margins in the industry being squeezed, banks continue to look for ways to reduce costs, and the gains of utilising new technologies. Employees can remain more focused on value-add activities, such as partnering more closely with the revenue generation functions of their businesses.
