FIRSTPOINT JAPAN™ : FOR JAPAN HIRING MANAGERS
Japan Economic Overview
Despite constant and sensational news reports to the contrary, Japan remains the third largest economy in the world just recently and barely being overtaken by China (which has 10 times the population). As an affluent and dynamic economy, Japan offers lucrative opportunities in many markets such as high-end fashion goods, electronics, mobile communications and health care. In addition, for many industries Japan remains a top or very key producer such as consumer electronics, automotive and various industrial products. |
In what is often surprising to outsiders, Japan has maintained an extremely solid business and social foundation and with some simple tune-ups, many of which are now coming, the Japanese economy will certainly become even more dynamic and responsive.
Japan Talent Overview
Japan's market supply for bilingual (and bi-cultural) candidates has been and is highly limited and constrained for a number of reasons. This is expected to continue as Japanese industry begins to organically invigorate itself and once again make forays into overseas markets, directly, or through joint-ventures and M&A.
Japan's market supply for bilingual (and bi-cultural) candidates has been and is highly limited and constrained for a number of reasons. This is expected to continue as Japanese industry begins to organically invigorate itself and once again make forays into overseas markets, directly, or through joint-ventures and M&A.
Japan Recruitment Overview
Japan's many unique cultural and societal conventions have made some aspects of recruiting in Japan far more different and difficult than what is found in North America or other industrialized markets. For instance, not only is the supply of bilingual candidates highly constrained in Japan, but the behavior of Japanese candidates is far more passive in both their career movements, job searches and job search methodologies compared to the candidates in both North America and other industrialized nations.
In Japan this has been changing quite rapidly since the 2008 "financial crisis" with Japanese candidates becoming more active, however, it is still nowhere near what we find in other markets.
As a result of all the confluence of these facts, this has traditionally lead to recruiting fees in Japan that are often far higher than seen in other markets.
For instance, during the 2006 to 2007 time period, the "average" fee in high-tech recruiting and many other fields was 35% OTE (On-target Earnings).
In some cases, we saw clients offering fees of 40% to even 50% OTE. Some of this cooled off during 2008 (pre-year end implosion) with rates hovering around 30% to 35% OTE.
Japan's many unique cultural and societal conventions have made some aspects of recruiting in Japan far more different and difficult than what is found in North America or other industrialized markets. For instance, not only is the supply of bilingual candidates highly constrained in Japan, but the behavior of Japanese candidates is far more passive in both their career movements, job searches and job search methodologies compared to the candidates in both North America and other industrialized nations.
In Japan this has been changing quite rapidly since the 2008 "financial crisis" with Japanese candidates becoming more active, however, it is still nowhere near what we find in other markets.
As a result of all the confluence of these facts, this has traditionally lead to recruiting fees in Japan that are often far higher than seen in other markets.
For instance, during the 2006 to 2007 time period, the "average" fee in high-tech recruiting and many other fields was 35% OTE (On-target Earnings).
In some cases, we saw clients offering fees of 40% to even 50% OTE. Some of this cooled off during 2008 (pre-year end implosion) with rates hovering around 30% to 35% OTE.
Japan Recruitment Overview (continued)
Since then, fees have continued downward, in some case they stand at 25% or 30% base, other times it is calculated on OTE (base + incentive). It really depends on many factors which we will discuss in more detail later.
The point is, even at the lower rate, the rates in Japan are far higher than North American (as a comparison point) and, thus, serve as a pricing signal to drive new recruiting firm competitors into the market -- and what we have found is that many of these new competitors and boutiques have been started by former agency-side recruiting consultants who were good at what they did (recruiting) but who had been treated extremely poorly, were not paid out according to their employment contracts or through egregious mismanagement were not able to fully monetize their skill sets and abilities (it should clearly be noted here regarding the bilingual recruiting firms in Japan, the vast majority of active firms are owned by foreigners and are not owned Japanese nationals).
Existing Japan Search Firms are now facing these up and coming and hungry boutique search firms who are headed up by some very savvy and competent business-minded individuals who also have hands-on recruiting experience and know the Japanese market.
And this is just the beginning, as it is going to accelerate (more about this later).
At the same time, Japanese candidates are becoming more savvy and have begun to understand job changes and have often changed companies during their career or at least explored this option by sitting for with various other companies in their career. Feeding into this is the growing usage (and acceptance) of job boards in Japan as well as social media and networking sites (LinkedIn as just one example) where more and more key bilingual talent is becoming easily discoverable.
In fact, most recruiters won't tell you this, but the dirty little secret is that they get the majority of their candidates not from cold calling or headhunting but right off of LinkedIn and other job boards -- the very same sources that you can utilize if you are trained and understand how to properly attract and calibrate with the candidates.
Since then, fees have continued downward, in some case they stand at 25% or 30% base, other times it is calculated on OTE (base + incentive). It really depends on many factors which we will discuss in more detail later.
The point is, even at the lower rate, the rates in Japan are far higher than North American (as a comparison point) and, thus, serve as a pricing signal to drive new recruiting firm competitors into the market -- and what we have found is that many of these new competitors and boutiques have been started by former agency-side recruiting consultants who were good at what they did (recruiting) but who had been treated extremely poorly, were not paid out according to their employment contracts or through egregious mismanagement were not able to fully monetize their skill sets and abilities (it should clearly be noted here regarding the bilingual recruiting firms in Japan, the vast majority of active firms are owned by foreigners and are not owned Japanese nationals).
Existing Japan Search Firms are now facing these up and coming and hungry boutique search firms who are headed up by some very savvy and competent business-minded individuals who also have hands-on recruiting experience and know the Japanese market.
And this is just the beginning, as it is going to accelerate (more about this later).
At the same time, Japanese candidates are becoming more savvy and have begun to understand job changes and have often changed companies during their career or at least explored this option by sitting for with various other companies in their career. Feeding into this is the growing usage (and acceptance) of job boards in Japan as well as social media and networking sites (LinkedIn as just one example) where more and more key bilingual talent is becoming easily discoverable.
In fact, most recruiters won't tell you this, but the dirty little secret is that they get the majority of their candidates not from cold calling or headhunting but right off of LinkedIn and other job boards -- the very same sources that you can utilize if you are trained and understand how to properly attract and calibrate with the candidates.
Japan Recruitment Trends & Opportunities
One of the biggest, if not the biggest complaint we hear from hiring managers and companies is how terribly high these recruiting fees are in Japan even with the downward post-financial crash pressure.
These high fees are due to many of the reasons mentioned above coupled with the fact that the Japan market is very complex. For instance, recruiting in Japan also entails additional social, cultural and linguistic aspects to contend with during the recruiting process.
Given all of this, an opportunity exists for the savvy hiring manager and savvy company to quickly overcome these difficulties and in the process realize better talent faster and/or save a very substantial amount of money in recruiter fees at the same time.
We will share with you how this is done, how to select recruiting firms, how to negotiate the strongest contracts, how to manage your recruiters and recruiting firms as well as how to properly interview and assess candidates and so on. By spending some upfront time on understanding these issues, you will reap huge savings in recruiting fee and in the process acquire much stronger talent and do so more quickly.
One of the biggest, if not the biggest complaint we hear from hiring managers and companies is how terribly high these recruiting fees are in Japan even with the downward post-financial crash pressure.
These high fees are due to many of the reasons mentioned above coupled with the fact that the Japan market is very complex. For instance, recruiting in Japan also entails additional social, cultural and linguistic aspects to contend with during the recruiting process.
Given all of this, an opportunity exists for the savvy hiring manager and savvy company to quickly overcome these difficulties and in the process realize better talent faster and/or save a very substantial amount of money in recruiter fees at the same time.
We will share with you how this is done, how to select recruiting firms, how to negotiate the strongest contracts, how to manage your recruiters and recruiting firms as well as how to properly interview and assess candidates and so on. By spending some upfront time on understanding these issues, you will reap huge savings in recruiting fee and in the process acquire much stronger talent and do so more quickly.