Training March 2015

Mysterious millennials

Welcome to the era of the free agent

Japan is entering a scary world of work. The tried and true assimilation methods of the past that injected young talent into firms are starting to falter. Every generation feels a gap with its successor, but the size of the impending chasm in Japan is spawning fresh challenges.

Things started to unravel with the bankruptcy of Yamaichi Securities Co., Ltd. in 1997, which put loyal staff on the street. This was a postwar watershed in the company-staff contractual model widely held in Japan.

Shocking at the time, it was followed by something much worse: the Lehman shock in 2008. The expectation of lifetime employment in return for total devotion was revealed to be a mirage.

Millennials—people born between the early 1980s and the early 2000s—are the first generation to experience two major trends: a decline in the youth population and being fired when one’s company “right sizes”—a modern euphemism for downsizing. The end of the old order has created skepticism among young people about the relevancy of their parents’ experiences for their own employment.

Some 40% of youth today are dai-ni shinsotsu (secondary new graduates), who quit their first job after three or four years and head off to find another workplace more to their liking.

Unthinkable in their parents’ time, this Japanese version of “free agent” worker mentality is a big cost to firms that have invested in training these new entrants, only to see them soon vote with their feet and depart.

Until now, it has been poor pickings for graduates in Japan to find a full-time job. That era is drawing to a close. There are now half the number of 14- to 24-year-olds that there were 20 years ago. Colleges with two-year programmes are no longer as popular, as today’s youth can more easily enter universities offering four-year courses.

These Millennials have choices. You do not have to be a genius to see what is coming around the corner—the war for recruiting and retaining young people in the workplace is going to intensify.

A smaller pool of available hires and a newfound freedom to change employers—without any social stigma—is empowering this generation. Abenomics may be a conjurer’s trick, but it is boosting share prices and improving profits for exporters. Many firms have now stockpiled cash to the point of making bankers wail and weep.

In my own experience, over the last four years I’ve seen the number of resumes for salespeople under 40 years of age drop significantly. Market demand for the young seems to be getting stronger and stronger.

The issue is going to be how to attract these Millennials to your firm and how to keep them happy so they stay. How good are your supervisors at mollycoddling the young? Given that most of today’s managers have worked like dogs and were raised on being yelled at by their bosses, the answer is probably not very promising.

Middle management’s approach is to hand out what they got, but this will not be a very successful training formula for these young individuals.

Thirty human-relations principles are outlined in the book How To Win Friends and Influence People, and they seem tailor-made for dealing with Millennials. Sage advice such as “Don’t criticise, condemn or complain” will perfectly address delicate youth sensitivities.

Communication skills will be a big issue for bosses dealing with the young, and the penalties for managers who fail to understand this will be severe. Remember, employees do not leave companies; they leave bosses. Whining, harping bosses will be seeing new entrants rush for the door.

Firms are well advised to retrain their leaders to deal with this hotly contested youth supply problem. If they do not, they may be unable to engage and retain this generation of workers, which is vital to fulfilling firms’ succession plans.

Long-term planning is a Japanese forte, but it will all be lost if leaders mess it up and lose their successor generation.

On-the-job training will not deliver anything worthwhile in this regard. Mediocre managers passing on a diluted version of what they learnt from their similarly mediocre seniors was always a dubious Japanese training construct. The juice has well and truly been squeezed from the Japanese on-the-job-training stone.

Organisations will also be more successful in recruiting and keeping Millennials if they have more relevant training to offer them. The same tired induction training courses or the functional rotation of positions throughout the firm are not satisfying this generation.

They lack experience, so they want practical information rather than lectures or theory, as well as concrete skills to make them more successful. What is more, they want them now.

Prepare your organisation for this brave new world of Japanese Millennials, or brace yourself for the unfolding nightmare.