Women in Japanese companies

Where’s the pipeline? Tokyo Prime-listed companies goal of 30% female board members

The Japanese government has set a goal for Prime-listed companies on the Tokyo Stock Exchange of each having at least one female board member by 2025. The aim is to have at least 30 percent of board members be women by 2030. By the end of July 2022, only 11.4% of all companies listed on the Prime List of the Tokyo Stock Exchange had women on their boards compared to 45% of equivalent companies in France and 31% in the United States.

This has prompted an outbreak of appointments of women to company boards during this summer’s shareholder meetings, mostly to non-executive directorships. Many of the new women board members do not have direct corporate line management experience, and are lawyers, accountants, academics and journalists. Even then, the scarcity of suitable women has meant a far higher proportion of the women have multiple non-executive directorships, compared to male board directors. Japan’s Financial Services Authority has pointed out that the goal of 30% by 2030 is not to have 30% of board members as external female directors, rather that Japanese companies should be planning now on how to have a pipeline by 2030 of suitable internal female candidates.

Japanese companies are going to struggle with this. One Japanese local bank stated that while 45% of its new graduate entry hires were female, only 6% of its managers were female. Another Japanese business organisation head said “there are no [suitable female] candidates” for the board. But as the Nikkei pointed out, the question is whether there really are none, or that women employees are just not being groomed for the board.

The motivation to change should not just be about caving into government pressure. According to JP Morgan Securities, their stock index compiled of companies with a high proportion of female executives started to outperform the TOPIX 500 in 2020, when the COVID pandemic started. Nishihara Rie, chief equity strategist at JPMorgan Securities, said, “During a crisis like the COVID, investors look more closely at the quality of management and the board of directors. Having women on the management team was seen as a factor in positively evaluating the board.”

Having people without mainstream corporate line management experience on the board is of course itself a sign of diversity and inclusion, and brings a fresh perspective to Japanese companies with long traditions of life time employment and seniority based promotion. But of course if only women from outside the company are appointed to the board, then there is a lack of role models for women employees in the company. Also, women from outside the company will not have the power base and influence within the company that internally appointed men have. I’m not sure 7 years is long enough for Japanese companies to fix this.

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Which companies pay women the best in Japan?

I thought the top companies paying 30 year old women the most in Japan would be mainly foreign companies, but actually over two thirds of the top 30 companies are Japanese, according to OpenWork – and in sectors that are traditionally male dominated such as IT, finance, pharmaceuticals and automotive. In the past, ambitious Japanese women generally preferred to join foreign companies as the perception was they would be treated more fairly, and remunerated on the same terms as the men, for performance rather than seniority.

The highest paying Japanese company is the misleadingly named Nomura Research Institute, which is affiliated with Nomura Securities, but is actually a management consulting and IT services company. Women there are earning around US$65K at the age of 30, and can expect to earn around US$87K by the time they are 40. None of the other big Japanese ICT companies appear in the Top 30 apart from NTT Data (19) and NTT Docomo (25). Whereas foreign companies Oracle, Salesforce and IBM are all in the top 30.

The second highest paying is the advertising and marketing giant Dentsu. I hope this is not related to them continuing to overwork their young female graduate recruits to the point where they take their own lives, as in the past. One Dentsu respondent to the OpenWork survey says “The rank determined at the annual evaluation meeting is reflected in the base salary. Bonuses are basically linked to performance. A few years ago, a new evaluation system was introduced, and some young people have become managers.”

P&G Japan is third, then PwC is fourth and Deloitte fifth, with other foreign professional services companies such as EY (10th) and Accenture (12th) also in the top 30, but no sign of KPMG. Nomura Securities are 7th and other Japanese financial services companies such as MUFJ Trust and Banking, Daiwa Securities and SMBC Nikko Securities are all in the top 30. Also surprising to me is that pharmaceutical companies Astellas and Eisai are ranked 8th and 9th. My impression had been that Japanese pharmaceutical companies were very traditional, hierarchical, male dominated organisations, and many Japanese women therefore joined Pfizer, Johnson & Johnson (who are ranked 17th) or GSK in Japan instead.

Similarly, Nissan (at #30 with average pay of US$47K at age 30 rising to $64K by 40) and Toyota also appear in the top 30 – although Honda does not.

The data that is lacking from this ranking, which could possibly explain more, is what the proportion of women in the workforce is for each of the companies – perhaps the high remuneration reflects a very small number of women, who are outstanding enough to succeed in very male dominated sectors. It would also be interesting to see to what extent there is a gender pay gap.

Has the time come for Japan’s Nadeshiko Brand to include overseas female employees?

The Japanese Ministry of Economy, Trade and Industry announced in October last year that they are revamping their their Nadeshiko* Brand – the annual selection of Japanese companies that are outstanding in their encouragement of the success of women in the workplace. As well as quantitative questions, this time they are asking more qualitative questions, on areas such as “whether the systems and measures to promote [women’s success in the workplace] are linked to management strategies.” The aim is to evaluate “whether each company has visualized a consistent story whether they are conveying information effectively throughout Japan and overseas”. The background to this change seems to be the increasing pressure on Japanese and other multinationals to be more transparent – for example making more disclosures of information such as the gender pay gap reporting requirement in the UK.

I am wondering whether this evaluation will cover more than the communication of initiatives overseas. Will they also be including their overseas employees in their quantitative questions, and also in the systems and measures? It has been a longstanding bugbear of mine that many Japanese companies publish plenty of information about the diversity of their Japanese workforce, but very little detail about their overseas employees. In the case of Japanese trading companies, they do not publish any figures on the numbers of people that are working at their overseas subsidiaries. It would seem they literally do not count.

When I last took a look at the boards of the largest Japanese companies in the UK, in 2016, it was clear there were fewer women on the boards of Japanese companies in the UK than there were even in Japan. I also found differences in the degree of national diversity – some boards in the UK were all Japanese (and almost all men), and some hardly had any Japanese on the board.

Seven years on, there has undoubtedly been progress, of sorts. The pressures that I pointed to in 2016, such as the stricter demands from UK and other financial regulatory authorities on Japanese financial services companies to have more diverse boards or for Japanese companies who are public sector suppliers (Hitachi, Fujitsu) to be more diverse have worked.

Fujitsu UK proudly points out on its website that it was one of the first companies to report on its gender pay gap, in 2017, since when, there has been a 44% reduction in the median gap to 10% and a 43% reduction in the mean to 9.6%. They have also published their first ever ethnicity pay gap, even though this is not a government mandated requirement. They also have a female Managing Director for the UK, a first I believe. She and the former UK MD and the head of Global Legal (both male) are the three board members – there are no Japanese board directors. In 2016 there were 6 people on the board, all male, one of whom was Japanese. The board in Japan has also undergone an overhaul, as have many Japanese boards, with the governance laws mandating them to appoint external directors. Fujitsu Japan has only two representative directors, both Japanese males, and 6 external directors, two of whom are female and one is an American male (albeit a fluent Japanese speaker and permanent resident in Japan). Fujitsu was a Nadeshiko brand in 2016, but not since.

Daiwa Capital Markets Europe also recently appointed its first ever female CEO – who is dual nationality British/South African. There are nine members of the DCME board in the UK, five of whom are non executive directors and the majority of whom are not Japanese. Of the non-executive directors, 3 are female non-Japanese, 2 are male Japanese. The other three members of the board besides the CEO are one Japanese male in the UK, 1 Japanese male in Japan and one South African/British male in the UK, who is the Chair. The holding company for Daiwa Capital Markets Europe, Daiwa Securities, has been a Nadeshiko brand every year since 2013. Its gender pay gap in the UK is nonetheless quite high for 2021, above the financial institutions average of 32% for the mean, at 38.8% mean, 37.9% median. Perhaps this will change with the new CEO in place.

The services sector has rather different challenges to the automotive manufacturing sector both in Japan and in the UK. In Japan, only Toyota group member Aisin is a Nadeshiko brand in the transportation equipment category. Nissan points out that 92% of its 7,342 employees, across manufacturing, design, parts and sales and marketing in the UK are male. Looking at their gender pay gap numbers, it’s clear that there is a higher proportion of women in bonus attracting, presumably white collar jobs and middle management, and a higher percentage of men than women are in lower paid blue collar jobs. Nonetheless, a gender pay gap of 6.4% median and 8.7% mean was identified. The UK boards of both the manufacturing and the sales and marketing side are 100% non-Japanese in composition, but no female representation. Nissan was named as a Nadeshiko brand in 2017 but not since.

Presumably, as in previous years, the announcement of the FY2022 Nadeshiko brands will be made in March 2023. It will be interesting to see what has changed.

* Nadeshiko is a Japanese flower that is also native to northern Europe – “pink”, of course.

Top Japanese companies for improvement in women in management

Toyo Keizai has taken a look at which Japanese companies have most improved the percentage of women in management over the past ten years. Unsurprisingly, those companies who had the best existing pipeline of women – in life insurance and retail – have been able to make the biggest strides.

Life insurance companies in Japan traditionally employed women as salespeople, who were allowed into offices and left fliers, business cards and sweets on your desk if you were absent. Meiji Yasuda, Asahi, Daiichi, and Nippon have all increased the proportion of women in management from only a few percent in 2011 to between a fifth and a third of managers in 2021.

Other financial services companies such as Resona, the smaller regional banks, Sumitomo Mitsui Trust, Mitsubishi HC Capital, Daiwa Securities, Sumitomo Mitsui Financial Group and MUFG are also in the 50 most improved. Non-financial companies in the top 50 include Astellas Pharmaceuticals, Sony and Bandai Namco.

Appearing in the bottom of the top 50 only requires a 10% improvement over the past 10 years, and 20 out of the top 50 most improved companies still have only 10-20% of managers who are female. The pipeline contains only a trickle for many.

I decided to stop talking about diversity in Japan – Professor Christina Ahmadjian

The new corporate governance code in Japan puts further pressure on Japanese companies to have external, independent directors on their boards. For those companies wanting to be on the new prime market, the code stipulates that a third of directors should be external. Companies are now facing a severe shortage of candidates deemed suitable to fill these roles particularly if companies are also trying try to be as diverse as possible in who is appointed.

The same faces keep popping up, including people such as Professor Christina Ahmadjian of Hitotsubashi University who is currently an external director for four Japanese companies; Japan Exchange Group (the Tokyo and Osaka stock exchanges), Sumitomo Electric Industries, Asahi Group Holdings and NEC . She was also an external director at Mitsubishi Heavy Industries until June of this year.

Her remedy for this shortage of suitable candidates, which she outlined in a recent interview with Nikkei Business, is to hire people from a wider variety of backgrounds. Not just university professors like her, but Japanese women who are working outside Japan, or even having a quota for people under 30 years of age. In her view, even a third may not be enough, because it would mean that the majority are still “salarymen” who have worked their way up the same company all their careers. “The director’s most important role is to appoint and dismiss the CEO. Previously, when I asked a Japanese company what is the difference between the board positions of a managing director (known as joumu in Japan) and a senior managing director (known as senmu), I was told, when a managing director gets older, he becomes a senior managing director. Such a board of directors will not be able to make the top management quit.”

You need people who don’t read the air

External directors need to be able to reject management policies in board discussions. They must also have the mindset that they can quit themselves at any time. You need people who don’t “read the air” the way salarymen directors do.

“Two years ago I decided to stop talking about diversity. I will not give a speech on it and I refuse to be interviewed on it. It doesn’t change no matter how strongly I put the case. If I give a lecture on diversity, people will listen hard and then say “OK, that was good.” I felt it was just entertainment. Japan’s gender diversity is certainly more advanced than before. More companies are introducing maternity leave systems. But why is it so slow. I think “just do it!””

As for diversity in terms of nationality, there are many students who love Japan and want to come to Japan to study and work for a Japanese company. However, after graduating, if they get a job at a Japanese company, after about five years they quit, as they have realised that they can’t sse a future, and their friends at other companies are being promoted faster and have higher salaries. So ofthen they choose to work for a foreign owned company while living in Japan.

1980s uncle management

“Japanese companies are more concerned with their internal talent management than with diversity. So why not hire in Indians and Russians with the necessary IT skills?” Ahmadjian is concerned that what she callls “uncle (ojisan) management” from the 1980s means Japan will not be able to compete globally.

Ahmadjian has lived in Japan for over 20 years, and was herself an office lady at Mitsubishi Electric in the early 1980s. She served tea and wore a uniform. “I really enjoyed it then, but it was a world of old uncles.” “When I asked the top management of a company what is the definition of young, I was told 55 years old. I got them to lower the definition to 50 years’ old.” Japanese-style management may have worked well as a system in the postwar context, but I think it is time to reconsider.”

“Why is our Japan sales team so useless?”

I am asked a variant of this question, several times a year, by Western companies with sales subsidiaries in Japan. They may not say “useless” as such, rather complain about the passivity, and lack of interest in trying something new in their Japanese team.

The Western managers feel obliged to visit Japan once or twice a year. They make visits to the same prospects, where they present their thoughts on what is going on in the industry and new offerings from their company. They are listened to politely but no business results from it. Or they explain the marketing strategy and new approaches to the Japan sales team and there is no engagement at all. Instead they receive a list of what seem like trivial customer complaints.

Of course if you talk to the Japan sales team, they have their own frustrations about the lack of understanding on the Western side about how sales and marketing works in Japan.

So here are the 3 issues that face sales and marketing teams of Western companies in Japan and what to do about it:

1 – They’re not as elite as their customers

Unless it’s a very well known company like an American tech company or one of the big consultants, a Western company in Japan is unlikely to be able to attract people who have graduated from Japan’s top universities. This means their employees cannot access an old boys’ network to open doors. And even if they do manage to get in front of a potential blue chip client, they are probably already feeling pretty intimidated, added to which, in Japan, the customer is not just king, but god.

2 – The dead hand of eigyō

Eigyō is the term used to describe the sales function in Japan, but it tends to be more about relationship building with existing customers – which means regular visits to customers for no particular reason, passive and predictable “order taking” and a lot of hospitality. It’s difficult to acquire new customers, as most established companies are in long term supplier relationships. A top salesperson in Japan is traditionally considered to be the person who is out of the office all day, doorstepping and cold calling, no matter how hopeless the situation, leaving their business card and brochures with icy receptionists in the hope that one day, maybe, they’ll be invited in.

So there is nothing very strategic behind targeting and acquiring new customers other than dogged persistence. This means that many marketing concepts that are commonly used in the West are not common knowledge in Japan, such as value proposition, USP or the 5Ps.

3 – Over-servicing

Japanese customers would expect a Western company to be sticklers for sticking to the contract, and delivering only what is paid for. There’s also a nervousness that if things go wrong, a Western supplier will sue, or disappear. Japanese suppliers are meant to stick with their customers through thick and thin, customising when asked, continuing with products and services that are unprofitable because the customer wants them and over-servicing in the hope that the cost can be recouped, some time in the far distant future.

So what can Western companies do about this?

Hire the rebels and treat them as equals

Many Japanese women are attracted to working in foreign companies because they assume they will be treated more fairly, and indeed many have reached senior positions in foreign companies such as Microsoft, Boston Consulting Group and Accenture. Unfortunately Japanese companies have woken up to this and are now trying to lure them back. But Japanese women will be well aware of the barriers they will face to being treated as equals to lifetime employees in such companies. So making sure that your Western company is as inclusive of them as possible in terms of career development, including international postings and training (particularly in marketing), and ensuring their voice is heard at top level meetings, will be key to retaining them and reminding them of what attracted them to a foreign company in the first palce.

And this goes for the older male employees too. They may have been lifetime employees at a big name company and were hired by a Western company for their connections and industry knowledge. They were probably frustrated in their careers at their Japanese company and saw joining a foreign company as a risk, but a chance to start again. You may discover there were some valid reasons why they were not successful in their careers in their Japanese company, but there will still be a value in their knowledge and experience, and their rebellious mindset might offer some creative solutions.

Be innovative

About the only acceptable reason in Japan for taking on a new supplier, especially a foreign one, is that they offered something that existing Japanese suppliers did not – Salesforce.com is an example of this. Being radically cheaper, like Amazon Web Services, can also work, but is not an avenue open to all companies. Japanese companies are very risk averse, so will assume the cheapness comes with a price in terms of quality.

But this still requires putting the effort in – such as the seemingly pointless regular visits to Japan give your sales team a reason to set up a meeting with potential clients, on the promise of a new perspective or innovative offering.

Break the rules

You can also use the ugly foreigner technique. Japan has a long history of letting the foreigner say the thing that everyone knew, but didn’t want to say out loud for fear of upsetting the rest of the group. Foreigners also get a certain number of get out of jail free passes for ignoring local protocols, so long as it was done from open hearted enthusiasm rather than malign intent.

One British Japan market entry expert told me he spotted a prospective customer from the signs on the office building his taxi had stopped outside. He persuaded the terrified Japanese sales person he was in the taxi with to accompany him into the building, and made his pitch in good Japanese to the receptionist, who was sufficiently impressed that she contacted the person in charge, and a few meetings later they had a new customer.

Japanese companies such as Fujitsu are also losing patience with the old eigyō, over-servicing ways. Fujitsu has renamed employees in eigyō “business producers” and are encouraging them to take a more consultancy based approached, banning them from taking systems engineers with them to client meetings. “Business producer” may not be a common term in Western sales but Fujitsu has chosen to render it as “Bijinesu purodyu-sa-” ビジネスプロデューサー in katakana, which is the alphabet reserved for borrowed foreign words. The foreign-ness presumably makes it seem like a necessary break from the past.

Myth 1. Young Japanese aren’t loyal to their employers

“They just use the company as a stepping stone”

Japanese companies have been worrying for a while now that young people are job hopping far more than previous generations. A Mynavi survey shows that only 22% of graduate recruits starting work in 2019 said they would be interested in staying at their company until retirement, 8% for over 10 years, 10% 6 to 10 years, 15% 4-5 years, 22% up to 3 years and 24% were “not sure”.

According to Nikkei Business, in their special feature on the myths of why young people quit, the reality is that because young Japanese people like the company they chose, they can’t bear to watch it decline. The Nikkei gives an example of an anonymous new graduate recruit who left her company after 3 years. She had studied abroad, had good language and communication skills and a strong interest in human resources. She thought working for a Japanese manufacturer had a romantic appeal, and the HR department wooed her heavily. Her reasons for quitting were that the general manager level was resistant to change, and when a new President took over, the direction of the company turned 180 degrees, making her worry about the lack of corporate governance.

Myth 2 Young Japanese lack perseverance

“They immediately complain when work gets tough”

The Nikkei points to a survey of managers of people in their 20s and early 30s which discovered that most managers thought that a much higher proportion of their team were proactive and willing to take up challenges than were not.

If anything, it’s the bosses who do not persevere, says Nikkei Business. They cite a young employee who quit a major insurance company in 2019 after 4 years who said that he was was highly motivated by tough challenges. He had looked forward to putting his energies into sales, but was repelled by how his boss – who took no responsibility and only thought about promotion – was so well evaluated.

Myth 3 Young Japanese quit because their pay is too low

“They prioritise pay because they are worried about their future”

A survey by Japan Net Bank in 2017 showed that 21% of 18-25 year olds did not expect to earn more than their parents over their lifetime, and 43% thought it was unlikely that they would do so.

Nikkei Business comments that the key concern of young Japanese employees is whether their job has meaning, and is of value. It quotes a young bank employee who thought that by working for a regional bank, he could support local businesses. However he did not see the point of the products he was selling and his request to transfer to a different department was refused. So he quit after 7 years.

Myth 4 Young Japanese quit out of youthful impetuosity

“They don’t have any responsibilities, so they quit on impulse”

It is true that Japanese are marrying later than before (75% of men are unmarried at 29, over 60% of women), so family responsibilities do not weigh so heavily on people in their 20s. “If I think about my future, I care more about how I am valued outside of the company than inside” says one high flier who quit a very prestigious trading company job. He had hoped to use his corporate finance and accounting skills and venture capital experience to help people in emerging markets. However he was placed in a division which did not make use of his expertise and was unexpectedly asked to transfer to another area.

Myth 5 Young Japanese quit because of too much overtime

“They want to have an easy life and hate overtime”

“I’m happy to do overtime, if I feel it’s adding value to the world” says a young Japanese rising star who quit her company after 2 years. She thought the company seemed very diverse and liked the way board level directors were involved in recruitment. However after an exhausting worklife, she felt she would be better in a job where she really felt she was contributing to society.

It’s hard to see any major cultural difference or something uniquely Japanese about this mismatch. I have vague memories of similar frustrations and worries when I was a young person thinking about joining a big multinational organisation after university 30+ years’ ago.

The dangers of going for the obvious solutions

The second part of this feature goes on to look at what Japanese companies could do to improve retention, and points out that the tactics that are usually proposed may be mistaken.

For example, thinking that there should be more 1:1 meetings between younger staff and their bosses could just increase frustration, if nothing is done as a result of the meetings. Having a system whereby young staff can request transfers is also pointless if the transfer is not approved, and often the dissatisfactions continue even in the new role. Internal commendations can also feel hollow, mentors often fail to turn up for mentoring meetings and simple pay rises don’t address key concerns about personal development either. Talking up the bright future of the company can also seem like just so much hot air.

More innovative approaches to retention

Nikkei Business recommends more innovative approaches, to address the fundamental reasons young people leave their companies. They point out that even good contributors, or employees who were reasonably happy in their work quit their employers, for reasons which are more to do with wanting to expand horizons, develop specialist knowledge or skills, or to have a job which better fits their lifestyle.

One recommended approach is to transfer young people abroad, or to more challenging environments. I would add a note of caution here, which is that I have often seen young people enjoying the freedom and challenge of living abroad, and then not wanting to return to their traditional Japan HQ, and quitting. Nikkei Business also suggests an “intermediate” mentor – closer to the junior employee in age and seniority, who acts as a go-between with the more senior mentor. Finally they recommend using AI to understand the motivations and fit of the person with various job roles.

I would add to this that Japanese companies might need to consider setting up continuing professional development associations similar to the ones we have in the UK – whereby members advance through a professional hierarchy through self study and examinations, in professions such as HR, accounting, finance, IT etc. Then, even if the company cannot offer them roles which have an instant career development impact, young employees can gain satisfaction from developing their knowledge and skills, supported by their employer.

How to hire and retain top staff in Japan – send them abroad

The most frequent complaint I hear from British and other multinationals with subsidiaries in Japan is around staffing. They can’t get the staff they want and they are not sure the employees they have are really the best for the job. This complaint is particularly focused on sales, as most “gaishi” (foreign multinationals) in Japan are primarily sales focused.

Many suspect that this is a cultural issue and contact me because they want to understand how sales and marketing work in Japan. They are aware that customer relationships are all important, and far more long term and personal rather than transactional. So expecting an instant result from a sales call to a new prospect is unrealistic. Incentivising aggressive sales behaviour with bonuses does not seem to work either.

I confirm that sales and marketing are different in Japan but I also explain that it is going to be tough for them to hire the “elite” from Japan’s top universities, who might have the necessary status and connections to approach blue chip Japanese prospects. This elite usually want to join Japanese blue chip companies, and view gaishi as high risk, low status employers.

Good staff can be found amongst those alienated by traditional Japanese companies

Good staff can be found amongst the groups that feel rejected or alienated by the Japanese blue chip companies – the salaryman who has worked in a Japanese company for 25 years and now finds himself being given a madogiwazoku (window gazing) job or young female graduates who understandably feel that a foreign owned company is more likely to reward them and promote them on merit rather than on how much overtime or drinking with the boss and customers they do.

Another promising group are those Japanese who have been educated outside of Japan. A recent survey by DISCO – a Japanese recruitment company – of most popular choices for Japanese graduate recruits shows the clear contrast in mindset between the top 10 for graduates of Japanese domestic universities and those who graduated from an overseas university.

Japanese graduates of foreign universities prefer to work for foreign companies

The top 7 choices for Japanese graduates of foreign universities are Deloitte Tohmatsu, PwC, Amazon, Google, Goldman Sachs and McKinsey. Mitsubishi Corporation and All Nippon Airlines are the only Japanese companies in the top 10, at number 8 and number 9, with KPMG bringing up the rear at number 10.

Mitsubishi Corporation and All Nippon Airlines are also in the top 10 choices for Japanese graduates of domestic Japanese universities – at number three for Mitsubishi Corp after fellow trading company Itochu at #1 and Toyota at #2 and at #6 for All Nippon Airlines. All the other Top 10 choices are Japanese too – Suntory, MUFG (financial services), Shiseido, JTB (travel), Japan Airines and Tokio Marine and Fire Insurance.

My old employee Mitsubishi Corporation made a conscious effort to target Japanese graduates of foreign universities and schools more than 20 years’ ago. In fact I was asked to help interview such graduates – whether to make them feel more at ease or to show that Mitsubishi Corp really was global in mindset, I’m not sure.

Twenty years’ on, many Japanese companies are scrabbling to recruit “global human resources”, but as the DISCO survey points out, Japanese graduates of foreign universities have very different ideas of what they are looking for in a career, compared to domestic graduates.

Japanese graduates of foreign universities want a job which helps realise their dreams and pays well, over stability and long term employment

When asked whether they felt a job should be a way to realise your dreams or a way to make sure you have a secure lifestyle, 40% of graduates of foreign universities chose the former with a further 25% saying they had some preference for the former, whereas for the domestic graduates, nearly 60% said they preferred the secure lifestyle.

As for wanting high pay versus wanting a secure lifestyle regardless of high pay, nearly 80% of foreign graduates strongly or somewhat preferred high pay, compared to under 60% of domestic graduates. Only 40% or so of foreign graduates wanted to work for one company for a long time, compared to 70% of graduates of Japanese universities.

Foreign companies in Japan need to offer overseas opportunities to Japanese graduates

And as Japanese companies have long suspected, most Japanese graduates of Japanese universities prefer to work in Japan rather than overseas. Whereas 70% of the graduates of foreign universities want to work outside Japan.

So for foreign companies in Japan, as well as offering higher pay and work which is more engaging, offering a chance to transfer to an operation outside Japan may also be needed to attract and retain foreign university graduates. That is the card which Mitsubishi Corporation and other trading companies have been playing for decades now and it has paid off for them.

It’s no longer just about “fixing the women” – in Japan or Europe

According to Nikkei Woman magazine, the clear message from this year’s annual best places to work for women survey is that companies must have an “all inclusive” approach to diversity, not just focus on initiatives for women.

The survey was sent out to 4347 listed Japanese companies with more than 100 employees. The responses were scored on 4 factors – 2 for engagement (how many women were in management and progress on promoting women) and 2 for working practices (degree of work life balance, degree of diversity)

The companies in the rankings are not so different from previous years and other similar rankings – a mix of non-Japanese companies (Johnson & Johnson at #1, IBM, Accenture), life insurance (Mitsui Sumitomo Life, Daiichi, Nissay, Sompo all in the top 20), health and beauty (Kao, Shiseido), recruitment agencies, retail and travel companies. Non-life insurance financial services companies also make an appearance – the biggest riser being Sumitomo Mitsui Banking Corporation, up from #26 to #19.

The kind of initiatives Nikkei Business (reporting on the survey in its sister publication) highlights that are more widely inclusive include J&J’s Open&Out, a LGBT network, unconscious bias training for male employees and having agile workplaces – where place and time of work are not restricted.

The four “do’s and don’ts” the Nikkei Business proposes for a wider diversity and inclusion strategy are:

Don’t think of better utilisation of women as just for women’s benefit, see it as an important management strategy
Don’t think of shorter hours as just for women who need to look after children, but have everyone working productively and efficiently
Don’t have management development sessions for women only, add awareness raising sessions for male managers
Don’t see childcare and elderly care as for women only, include men as carers

All pretty obvious really, and not necessarily practiced wholeheartedly in Europe either, but good to see it spelt out in a mainstream business magazine. The message that this is about improving the work life of all employees is likely to resonate well with traditional Japanese companies, sometimes termed the “last functioning socialist organisations”.

Gender pay gap in UK’s largest Japanese employers is lower than average

Any company in the UK that employs over 250 people is supposed to have submitted their gender pay gap estimates by 4th April 2018. We ran our Top 30 Japanese companies through the Companies’ House database and found that all have submitted data for those subsidiaries which qualify.

The average pay gap of their 50 subsidiaries is around 15%, slightly lower than the national average of 18.4%. There are some interesting patterns in that there is a gender pay gap in women’s favour in the automotive and tyre businesses – Kwik-Fit and Stapletons (both owned by Itochu) and Micheldever (acquired by Sumitomo Rubber in 2017) and also Toyota Motor Manufacturing and NSG Pilkington Automotive. Looking at the detail, it seems this is to do with there being a lot of men in the lower paid jobs (presumably tyre fitting, shopfloor, delivery) and some well paid women in the higher paid, presumably managerial/executive jobs.

The gender pay gap is particularly bad in finance, although no worse for Japanese banks than for other UK based investment and retail banks.

The wooden spoon goes to Hitachi subsidiary Horizon Nuclear Power with a 41.9% pay gap, closely followed by Fujifilm, with a 41% pay gap.

Top 30 Japanese employers in the UK (April 2018) & gender pay gap
Rank	Company	UK employees 2016-7*	Gender gap
1	Fujitsu Services	9,326	17.9%
2	Nissan	7,755	-11.3%
3	Honda Motor Europe (sales)	6,539	27.1%
	Honda of the UK Manufacturing		4.5%
4	Itochu	6,515
	Kwik-Fit		-15.2%
	Stapleton’s (Tyre Services)		-24.9%
5	Hitachi Hitachi Consulting	3,998	30.3%
	Horizon Nuclear		41.9%
	Hitachi Capital		33.5%
	Hitachi Vantara		27.0%
	Hitachi Rail		-0.9%
6	Mitsubishi Corp Princes Foods	3,532	8.7%
7	Ricoh UK	3,484	17.4%
	Ricoh UK Products		10.4%
	Ricoh Europe		32.2%
8	Sony Europe	3,143	27.2%
	Sony Music		22.7%
	Sony DADC		8.7%
	Sony Interactive		12.8%
9	Toyota Motor Manufacturing	3,098	-6.4%
	Toyota (GB) (sales)		29.7%
9	Marubeni (Agrovista)	2,294	36%
10	Dentsu Aegis London	2,757	14.5%
	Dentsu Aegis Manchester		1.8%
11	Canon	2,693	15.8%
12	SoftBank (ARM)	2,173	15.5%
13	Nomura	2,166	36.9%
14	NSG Pilkington Automotive	2,128	-12.1%
	Pilkington Technology Management		31.7%
	Pilkington UK		8.3%
15	Mitsubishi UFJ Financial Goup	1,987	35.6%
16	Denso Manufacturing	1,897	24.2%
	Denso Marston		6.6%
17	NYK Group (Yusen Logistics)	1,855	4.0%
18	Mitsui Sumitomo & Aioi Nissay Dowa (Insure The Box)	1,809	19.0%
19	Calsonic Kansei UK	1,778	3.6%
	Calsonic Kansei Sunderland		3.6%
20	Konica Minolta	1,572	18.2%
21	Sumitomo Rubber (Micheldever Tyre Services)	1,543	-19.9%
22	Brother Industries (Domino UK)	1,384	15.1%
23	Olympus Keymed	1,348	27.7%
24	Fujifilm UK	1,257	41.0%
	Fujifilm Speciality Ink Systems		8.7%
	Fujifilm Diosynth		16.0%
25	Sumitomo Corporation (Howco Group)	1,249	17.5%
26	Unipres	1,237	3.1%
27	JT Group (Gallaher)	1,086	14.0%
28	Sumitomo Mitsui Banking Corporation	1019	34.9%
29	Toyoda Gosei	1,192	0.9%
30	Mitsubishi Heavy Industries (Primetals)	1,152	38.1%
TOTAL		84,966	15.1%

Last updated by Pernille Rudlin at 2023-10-02.

Category: Women in Japanese companies