Market conditions in Japan have continued to improve since hitting a low point in March 2011, following the Great East Japan Earthquake. On the back of greater confidence and improving economic conditions, recruitment activity picked up significantly throughout 2013.
Overall, Japan’s employment market continues to be one in which demand outstrips supply, and employers are increasingly competing for the best talent.
Recruitment activity for global organisations is largely determined by macroeconomic conditions worldwide. As Japan is the world’s third-largest economy, the country continues to offer growth opportunities for multinational firms across a range of business sectors.
In contrast, local firms’ hiring plans are far more driven by domestic economic conditions. Thus, Abenomics has begun to have a positive impact, generating greater levels of confidence.
While this has not yet translated into a significant increase in recruitment, the situation is predicted to change in 2014.
Over the coming 12 months, healthy hiring activity is expected, with an anticipated improvement on 2013 levels, according to the views of employers surveyed for the 2014 Michael Page Japan Salary & Employment Forecast.
Sharing their expectations regarding the recruitment outlook for the coming year, nearly half of the 755 employers that responded to the survey stated that they consider the current employment market to be steady compared with that over the past 12 months.
A further 39% of the respondents are more confident about recruiting in 2014, with nearly half of this group indicating the employment market is now stronger.
In particular, the robust demand for talent in the technology sector is probably due to rapid changes in technology platforms and a shortage of professionals with relevant skills, specifically those of software engineers and business analysts.
The banking and financial services hiring market has staged a noticeable recovery, although business remains down from its peak, and this is expected to continue.
We expect increased demand in support industries, such as legal and professional services.
On the commercial side, all industries are buoyant. In particular, healthcare, life sciences and technology are performing well, in terms of recruitment for technology-related and functional roles, as well as for sales, marketing, HR and finance jobs.
Firms are also making a stronger digital push. This includes digital marketing within e-commerce businesses, as well as the activities of firms in traditional business sectors, such as retail, that are establishing their own digital platforms.
The digital sector is expected to grow overall. Consequently, demand in this area will be firm for skilled candidates, such as recruits familiar with search engine optimisation.
This growth is being driven by global pressure on firms to establish or increase their online presence, a trend that is particularly notable in Japan.
From a company perspective, working with online platforms has a number of benefits, including cost effectiveness, easier measurement of return on investment, and the ability to tailor content and target advertising to specific segments.
However, the Japanese remain active consumers, many of whom prefer to interact with physical items in-store and experience the customer service that retail offers. Thus, while the digital arena is expanding, strong demand remains for employees in more traditional retail roles.
In addition, temporary positions are expected to increase. Currently, an estimated one-third of the Japanese workforce are in temporary roles, and employers are continuing to hire professionals on a project basis.
With the employment market expected to remain positive, 46% of respondents anticipate a shortage in professional skills over the coming year.
The key challenge for employers in multinationals and domestic firms will continue to be finding talented professionals with desired skill sets.
The abilities in demand include technical- or language-related skills, or a combination of the two. Many roles require recruits to be bilingual, but only an estimated 4% or 5% of the population speak English, and few foreigners speak Japanese.
While the impact of a skills shortage on business is translating into an increased need for more targeted attraction strategies, 41% of the respondents (46% of the employers that participated in the survey) believed this factor is not likely to impact salary levels.
For the full 2014 Michael Page Japan Salary & Employment Forecast, visit www.michaelpage.co.jp/en/ContentArticle/page/8150.html.
The report can be viewed online; a video offers a summary of the key findings.