Establishing an Image of Stability and Commitment To Attract Talent

Last week a report was published in the U.S. stating that 73% of new graduates ranked job stability as their top priority when choosing an employer. Among the leading factors for this are the current inflation and rising living costs, as well as the widespread belief that a recession is on the horizon.

People are not merely looking at whatever job might be on offer right now. Rather, they wish to see how their career will develop and grow internally over a 5-to-10-year timeframe.

In Japan, this prioritization of stability is nothing new. The country’s belief system still promotes the notion of lifetime employment. Also, social status is often linked to the prestige of your company’s name, much more than your job title or income.

To illustrate the importance of social status, some time ago one of our clients shared an interesting story. They were hiring a young, talented business developer from one of Japan’s most prestigious employers – a top-tier trading house. The new company offered the man a more senior position and a higher salary.

In the end, the young candidate accepted the offer. However, he did ask to delay the start date because he was due to wed soon. At the time of the ceremony, his family wanted to claim the boasting rights associated with employment at a top trading house.

For multinational companies hiring in Japan, understanding these cultural nuances is critical. In today’s volatile market, with a fast-changing energy landscape and global economic uncertainty, demonstrating a stability within your firm, and your brand’s commitment to the Japan market is paramount. Let us dig into some specifics.

GK vs KK

A corporate entity in Japan can be set up as either a GK (Godo Gaisha) or KK (Kabushiki Kaisha). Both are limited liability companies and a suitable option to establish a local subsidiary. A GK is typically easier to set up with lower reporting requirements, has a cheaper registration and less requirements for shareholder meetings, reporting, and etc.

From a Japanese perspective though, a GK is seen as a lesser form of commitment. Having a KK in Japan is a clear demonstration of taking one’s business seriously and planning to be here for the long term.

Shared office vs own space

We can argue that Covid-19 has changed the landscape on this issue. However, traditionally an office in a shared space such as Regus or WeWork was seen as a temporary measure. Hence, an indication that a foreign business was only planning a

temporary sojourn in Japan. Long-term office space, rental contracts and build outs are expensive here. However, making such investments is also seen as a statement of intent.

Attitude to local partnerships

Newer, less known names in the conservative energy industry can gain brand recognition by association. Secure a partnership with a Mitsubishi or Itochu, not to mention financing from a major Japanese bank, and your credibility will soar.

On the other hand, if you come to Japan demonstrating an attitude that your technology, business plan, track record, etc. are superior to local options, or demand that you sell your tech without a local partnership, you’ll be met with high levels of doubt from potential employees. Building credibility will be an uphill battle.

Local hire vs expat leadership

This is the toughest! Japanese employees (and business partners) disdain those global firms that enter the market with an expatriate leader whose only mandate is to copy the blueprint of [insert country here] locally. Therefore, our firm often advocates choosing a Japanese person to be the country manager.

This demonstrates not only a commitment to Japan, but it’s also a clear sign of trust that the local talent pool can deliver, which in turn attracts more talent in the mid- lower levels. You can certainly hire a non-Japanese, or expatriate for this role. However, in that case, selecting someone who brings industry connections, and most importantly cultural understanding and sensitivity, can make or break your other talent attraction efforts.

Examples in the offshore wind industry:

Here are some examples that best illustrate the points made above.

Earlier this year, our firm helped one Japanese professional, a man in his mid 30s at a major oil and gas firm, to change career for the first time. He was interested in offshore wind, and so he met with a handful of companies. He received a lot of interest, but his final choice was not the biggest of the firms in contention. His new employer, however, had the following:

  • A Japanese country leader from a top trading house, plus a well-connected Japanese advisor who could leverage his network of partners and financiers – akin to the value of a board member;
  • A strong, multi-project partnership with a major Japanese energy conglomerate over multiple bidding rounds;
  • Their own office space, set up as a KK;
  • A previous track record of hiring from major Japanese utilities, the EPCOs.

Another case was when a European energy giant entered the Japanese offshore wind market quite late, establishing an entity here well after the results of Round 1 auctions came out last December. Though this could be seen as a disadvantage, they made certain strategic decisions that made them a prospective employer of choice for many Japanese professionals

  • Set up a KK and established an office in a prime location, close to important and influential partners, METI etc.;
  • Hired a foreign country manager who has lived in Japan for a long time, traded with Japan for over a decade, speaks decent Japanese, and has excellent local cultural knowledge;
  • Established partnerships with top-level Japanese partners in a respectful manner, bringing humility, technical expertise and options to work on projects also outside Japan.

ndrew Statter is Partner and Head of Greentech at Titan Consulting


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