Confronted with a rapid appreciation of the yen, low birth rate and the ageing of Japan’s labour pool, Japanese manufacturers began moving production offshore in the mid-1980s, to take advantage of the availability of low-cost labour. But now, according to Nikkei Business (7 September), their far-flung factories are having difficulty recruiting and retaining workers on a global basis.
Earlier this year, Japanese auto and parts manufacturers based in Mie and Gunma prefectures began circulating what it described as “peculiar” position-wanted ads. What made the ads receive this description was their targeting of foreign workers who had come to Japan in search of manufacturing jobs. The place of employment, for those who qualified, was to be in Mexico, a country in which four Japanese firms—Honda Motor Company, Mazda Motor Corporation, Nissan Motor Co., Ltd. and Toyota Motor Corporation—are confronting an acute shortage of capable staff.
Thanks to the North American Free Trade Agreement, Mexico—with a population that this year is predicted to reach an estimated 120mn—has become the base for 12 foreign manufacturers that are competing for skilled workers and supervisors. US and European manufacturers have been luring away experienced local staff.
Japanese firms are experiencing a similar situation in Vietnam. In one business, two 10-year veteran workers resigned from their Japanese employer in the same month. While neither gave a reason for leaving, it was subsequently learned that they had been hired by South Korea’s Samsung Electronics Co., Ltd. In 2014, Samsung began shifting its production of smartphones from China to Vietnam, where it employs more than 100,000 workers at two plants. Another South Korean manufacturer, LG Corporation, has also made heavy investments in Vietnam, with plans to employ 20,000 staff.
A comparison of remuneration in six Asian nations found that, in virtually all cases, Japanese firms paid lower wages than other multinationals. In addition, Nikkei Business warned of three irritants that repel skilled workers: Japanese employers being perceived as having a patronising or condescending attitude towards new economies; having discriminatory hiring practices; and attempting to impose the “Japanese way of doing things”.
The problem of recruiting and retaining workers extends to the construction business, another field in which Japanese contractors are feeling the pinch. Newjec Inc., a 52-year-old construction consulting firm—affiliated with Kansai Electric Power Co., Inc., which has operated an office in Jakarta, Indonesia, since 1973—has been involved in five major projects as part of an ambitious infrastructural plan to boost the country’s economy.
Due to a lack of project managers who can oversee operations and manage budgets, Yusaburo Kuwano, aged 80, was brought out of retirement to fill the position, which involves expansion of the power grid in East Java and Bali. By the time the project has been completed, Kuwano will be 84.
This example may set a pattern for the future. “In worldwide terms, many emerging economies with growing populations will continue increasing their overall labour force”, said Kenichi Fujiki, chief operating officer of PT Reeracoen Indonesia, a South East Asia job placement speciality firm. “But I suppose that ‘usable human resources’ may actually decline in the future”.
According to a survey undertaken by ManpowerGroup, a temporary staffing firm, 66% of the responding firms said that although they received a sufficient number of applicants, they were unsuitable. Reasons cited include a lack of specialists with hard skills and experience, as well as unprofessional attitudes, dissatisfaction over offered wages, displeasure with job location, the perceived poor reputation of the employer, and unwillingness to be transferred.