Energy Jobs in Japan: Plug & Play, or Invest in Potential?

Solar power plant

Client: “We want young, ambitious, bilingual talent with a mix of technical skills as well as solid commercial acumen, who has worked for years with our direct competitor; will match with our culture and is motivated to work for us.”

Agent: “Yep, I’m sure you do. The only issue is that so do all of your competitors.”

I’m slightly exaggerating, but there has been a shift in certain areas of the energy talent ecosystem. Today, there’s a recently developed pool of talent that has led to an attitude shift among hiring companies to consider poaching from competitors first, rather than hire the high potential talent who doesn’t yet have the optimal resume. Offshore wind, energy storage, corporate PPAs, carbon accounting, and various front and mid office roles in power markets are those in which this trend is now prevalent.

Poaching is certainly possible, and successful cases are increasing. Competition though is fierce, and demand outweighs supply, which can inflate prices and give suboptimal offers to acceptance results. Let’s look at whether poaching is the ideal approach – How to do it well, and investigate the alternative approach of hiring for talent rather than direct experience.

The price of talent in Japan has increased


As has been well publicized in recent months, the age of deflation in Japan is finally at its end. Real estate prices have been steadily increasing for the better part of a decade now, peaking with a 30% increase across the Tokyo metropolitan area in 2023. Salaries have lagged behind, but are now moving, with a 3.8% average increase across all TYSE listed firms in 2023, and similar predictions for 2024. Tax incentives are in place for large firms offering 7% or greater wage hikes, and 4% or greater for SMEs, both of which are occurring at rates not seen since the bubble era in 1980s to early 1990s.

These statistics are aligned with Titan’s internal data, where we track talent that we’ve supported to change companies at 1, 2 and 3-year intervals and have seen an average wage increase of 3% over the past 3 years (not including promotions).

The real cost is compounded by the strong performance and record profits from a number of trading houses, energy majors and oil & gas firms, resulting in actual bonus payouts exceeding the theoretical amount, with many cases in the range of 1.5 ~ 2x of target.

Based upon a healthy annual wage increase, coupled with a 1.5x payout of a typical variable bonus of 25% of base salary, the cost of the same talent increased >20% over the past 3 years.

Paying the poaching premium


Talent working for a direct competitor has the strongest appeal for hiring firms. Their knowledge of the market or technology, connections with clients / vendors and up to date regulatory knowledge are all desirable. Their ability to plug into the role with minimal time loss and investment in training and development is also appealing, and can lower both opportunity and T&D costs. Most hiring companies recognise this, and build in a premium rate to attract such talent. Historically, this has hovered around 10%, with 5% variability either side.

Poaching passive talent from competitors comes with the added challenge for the hiring company to offer professionals something they do not already have in their current firm. In some cases, it can be the chance to work on a new technology, or a project that has been recently won. Without this, the candidate is more than likely to demand a step up: a shift to management, a promotion to Director level, etc.

With an increasingly diverse set of players in today’s energy market, illustrated by continued new market entry of foreign players, more aggressive investment by Japanese industry and a slowly growing start-up innovation ecosystem, competition for talent has increased. This compounds the challenge of meeting the candidate’s demands with the need to win a bidding war to secure the services.

As an illustration of this trend, the most recent four changes that Titan has facilitated to direct competitors, with competition for the talent in question, have resulted in total package increases of 18%, 33%, 50% and 21%.

Clear and hidden benefits of investing in potential


In 2011, domestic renewable energy was virtually non-existent. The earthquake and then tsunami striking Fukushima Dai-ichi and the subsequent shutdown of all nuclear plants changed this. With around 24% of generating capacity knocked out overnight, Japan set about promoting renewable energy growth with one of the most lucrative Feed-in-Tariff systems globally.

Both domestic and international investors and developers raced to get a piece of the market, even though there was close to zero experienced talent to hire. Those early years of the solar boom saw developers hiring from module makers, real estate brokerages, ski resort developers, general contractors and even ramen and chocolate entrepreneurs (true story…). Everyone learned the business from scratch, with varying levels of success, of course. However, the moral of the story remains. If you have an attractive business, people will invest their time to jump in, learn and can become industry leaders.

As the primary motivation of this talent pool is to shift into your company and / or industry sector rather than primarily financial, they typically have a mindset to invest in themselves and demand a lower increase, or in some cases can be hired for the same or less as their previous incomes. Depending on the demand for their transferable skills in both your competing industry and the wider market, you may also avoid the bidding war inflation effect as well.

On one hand, this talent will take a bigger front-end investment from the employer to train and develop, however you have the benefit to mold them to fit your business and avoid any undesirable habits. Breaking negative habits and ingrained methods of working can often take longer than the training and formation of new skills.

Employee referrals reduce cost of hire and lower risk


What percentage of your hires annually come via employee referrals? We have seen attractive energy tech start-ups adding upward of 50% of their workforce from internal referrals, to global giants struggling to get into double figures.

When you consider the cost of an internal talent acquisition team, plus all overheads, social insurances etc. or paying Japan level agency fees (typically 35 ~ 40% for expert service), the savings from promoting an employee referral program are significant.

Other benefits include:

  • Hire a known quantity; your employees won’t bring in the ‘problem child’ from their prior organizations.
  • Cultural integration; the new hire already has a buddy in your firm.
  • Less competition; with a 15~18% market penetration across LinkedIn and major Japanese job boards combined, your employee referral has a >80% chance to not be interviewing all over town.
  • Financial gain is not the key motivator to move, reducing the premium.
Internal equity dilemma, bring your crew along


As an agency, we have cases at offer negotiation time where the current and expected package cost of the candidate that our client wants to hire becomes an internal equity issue. How can the company justify paying the new, unproven hire more than the loyal employee who has been performing well for a number of years?

Fair question. Let’s revisit one of the first points in this column – Japan is not in deflation anymore, and salaries are increasing. Did you increase across your team in the last few years? Your competition most likely did. This not only will cause headaches for both the business and HR departments at the offer stage around internal equity, it also leaves you wide open for attack from competitors who realize you are a great place to find a bargain….

Review your team and wider market trends regularly, benchmark against competitors and ensure that you are in a position to be competitive to hire and protect yourself from guys like us (sorry!).


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