The third major topic related to the foreign workforce is career and career advancement. Many Japanese companies do not advertise their positions with a dedicated job description. This is visible externally; hiring is often related to join a company in general instead of joining a company because of the offered job profile. But internally as well, the positions within an enterprise are often not defined. 

Career Advancement

Japanese corporate culture is renowned for its seniority structure, which consumes everyday life. From simple acts such as the formality of the elevator to the system in which communication occurs within the workplace. It is a system that is both difficult to ignore and difficult to go against. However, that same structure allows for a sense of security within employment due to the traditional “employment for life” scheme.

The list items in the “Things to Avoid to Keep and Retain Foreign Staff, is from an internal guide of a Japanese HR publication advising staff on how to manage foreign staff.  The proposed suggestions above highlight the importance of using the diversity and resources presented rather than hoping that the system will naturally change with the influx of an international workforce. A global business projection makes the company more attractive to work alongside on international discussions and establishes that the company is open to innovation, modern, and forward-thinking. This, however, cannot be achieved if high potential bilingual staff are submitted to administrative work.

Career Progression of Foreign Employees in Japan

In this section, we outline some of the viewpoints Japanese companies have about foreign employees in Japan. One of the classical reasons for Japanese companies’ hesitation to promote foreigners is the perception that they will leave Japan at some point. They often leave Japan for other countries and also for other companies. They are thought of as transient and/or expendable.

Japanese companies tend to have an unwritten rule of assessing people based on whether they fit the existing organizational culture rather than evaluating the qualifications or the changes they could bring.

The language barrier, communication issues, and lack of experience with foreigners at the head office in Japan are often the major drivers why Japanese companies dominantly have Japanese ex-pat presidents at their overseas branches, which clearly creates a glass ceiling for local staff career progression. This situation is not unique in Japan. European companies and American companies also have the same practice regarding sending ex-pat leaders from home countries to overseas branches. Sometimes Japanese subsidiaries have alternating executives, for example, a foreign president who gets replaced by a Japanese because he or she does not understand the Japanese business. The Japanese president then gets replaced by a foreign because of frictions in global alignments and so forth. It seems more difficult in Japanese companies for foreigners to have a decent career. Why?

It is because of the traditional Japanese career model, which consists of lifetime employment and constant job rotations. And regular job rotations are one-sidedly dictated by HR, and individuals have no say in it.

But now, it is getting difficult for most Japanese companies to secure lifetime employment. However, they continue with job rotations one-sidedly decided by the company without considering individual life or career aspirations.

A healthy promotion happens when a senior position opens up, and a junior person is ready to fill your current situation. However, now at many organizations, senior positions are totally occupied with so many older people who have no willingness to go anywhere else for a long time. So it isn’t easy to show/see any career path moving upward.

One of the main reasons for senior people’s tree-hugging is that the Japanese compensation curve is designed to overpay senior people and underpay younger people. So it is a delayed compensation model. Older people are now collecting their deferred compensation by being overpaid to compensate for their earlier underpaid period. Younger people are currently underpaid based on this traditional practice, but they can no longer expect the same treatment of overpayment in the future. That’s why young people are quitting.

Japan’s delayed compensation model is a “psychological magic/poison” that is preventing older people from moving on and clogging career paths for young people.

Many Japanese companies are now trying to change the model by implementing pay for performance and job descriptions. So in 5 years, the situation may be significantly different from today. Ex-pat staff may never be considered for permanent/management roles.

Employee Experience in Japanese Enterprises

Positive employee experience is important to attract foreign workforce, and the topic has increasing significance for hiring local talents. How Japanese companies could give better employee experience is, therefore, one of the priorities of executives.

Still, the concept of “gaman”(self-suppression) is powerful in Japan. The voice for a better employee experience has to come from the top. The bottom-up is difficult. The ambiguity of leadership in Japanese companies makes it difficult to initiate change. Companies leaders send out correct messages but are often not following their own messages.

Japanese companies prioritize uniformity and treat everybody the same. With limited flexibility, it isn’t easy to provide a great employee experience. The companies’ lovely “face” to their clients and the “face” they offer to their employees are so different. This internal face for employees is often not written, defined and not explained. Still, many Japanese companies are not providing job descriptions.

Companies need to provide an employee value proposition and explain clearly what’s in it for employees. When do we say the company should give employees a better experience? Who is the company?

Often Japanese executives also see themselves as employees who climbed up with “Gaman” and expect employees to endure the same. Companies leaders must provide a “safe environment” for employees to speak up, take risks, do new things or without this new culture they will have no better employee experience.

Foreign Professionals as Local Hires & Expats

What motivates foreign professionals to come to Japan, work in Japan and stay in Japan?

Expat foreigners and locally hired foreigners are treated so differently. Also, there are non-Japanese speaking foreigners and Japanese-speaking foreigners treated so differently. The latter ones are treated much more like the Japanese staff.

Globally operating Japanese companies have two different types of the workforce: domestic workforce for domestic Japanese clients & international workforce for international business. But some domestic Japanese clients also want international service and experience, so the Japanese management has to adjust and change. It is very challenging to change most Japanese adults who went through the Japanese education system where they were trained to excel in learning one-sidedly, to become more innovative and creative with critical thinking skills.

For foreigners, it seems it is double the work/half the reward here in Japan. There is a huge expectation gap. Foreigners are expecting to be rewarded for high-performance and results while many Japanese managers are expecting something else, such as becoming a better team player.

Foreign leaders are often brought into the Japanese organization as a change agent and they were told to transform the company. But when they try to do their job, often there is not enough support and commitment from the top management. Many foreigners end up having a feeling of “Broken Promise” and leaving Japan.

Japanese companies are now talking about introducing job descriptions. It is a good thing also for the Japanese to be assigned for a specific job as a professional rather than being a loyal company soldier as a generalist. But there is also a concern that some Japanese may do just what’s written on the job descriptions and nothing else, making them even less proactive and less committed.

When a foreign leader is brought to Japan as a change agent, it is often the case that the company does not make any further investment in this person’s project and does not even announce or explain properly why this foreigner is here and that people should follow and support this leader. As a result, it is very difficult for foreigners to get support from the Japanese.

Besides personal motivation like a certain affinity towards Japan and its culture, there are numerous reasons to work in Japan – in particular as an ex-pat. Japanese business operations are often highly reliable and consistent. Compensation is satisfactory as ex-pats hired from abroad have many advantages like housing allowances, transportation allowances including home flights. The expectations from management are often lighter than Japanese colleagues as it is not expected that ex-pats can deliver with full performance within the Japanese environment.

There are also a number of challenges that lead to situations that non-Japanese professionals leave their companies or even return to their home countries. This includes that training overlooked by management and cultural considerations missing from plans. When ex-pats get localized, they lose the ex-pat status and will be treated EXACTLY like Japanese employees. This often applies also to domestic hires of foreign employees. Transferring to different locations with no consideration for family or no consideration of cost-intensive international education of children. Their past professional career trajectory and skill-sets are also often overlooked by management.

Broken Promise & “Psychological Contract”

A ‘psychological contract’ covers the expected relationship between employees and employers beyond the legal written contract. It is build-up upon a conversation with management company culture, non-written agreements and so forth. While a psychological contract is not legally binding, it strongly influences motivation and the working environment. Companies often underestimate a psychological contract, but people definitely have it. Communication about expectations is not happening enough between companies and employees.

Many Japanese people still know only one company and have no reference point to assess their situations. Companies should hire external consultants who can bring in a different mindset and advise objectively based on the current market practices. In Japan, the employment contract is often very thin while it is so thick as a book in the US. There are a lot of grey areas in Japan because many things are not clearly written. And this grey area is often taken advantage of in Japan.

Psychological contracts exist not only in the field of employment but also in the field of customer relationships. People expect certain things from each other based on the wishful mutual understanding as those things are not clearly written anywhere.

Japanese were historically following the natural order without having to have many written orders. However, in today’s global business world, Japanese companies should more explicitly write down issues and document the orders/policies, etc., so that there will be no expectation gap. What sometimes happens to some ex-pats in Japanese companies is that companies try to keep ex-pats by letting them work on some creative and transformational topics without any intention to use their work. It surely makes foreign staff feel “tricked or deceived”.