Women in Japanese companies Archives

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.

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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.”

Most popular employers for graduate men in Japan are companies that would make their mum proud

It’s probably a legacy from the good old sexist days in Japan when men and women followed very different corporate entry paths that Toyo Keizai chooses to split its graduate employer popularity ranking between males and females. Back in the day, men tended to be graduates of 4 year universities and follow the management track, whereas many of the women went to 2 year junior colleges and entered the administrative track.

It’s intriguing nonetheless to speculate why men in particular choose the companies they do, compared to the most popular choices for men and women combined.

Top choice for men for the second year running is the Japanese trading company Itochu. Known to be more maverick than its rather more staid rivals Mitsubishi Corp and Mitsui & Co, it has been beating them on net income in recent years too. And it pays well. It tops the combined male/female chart too. Mitsubishi Corp has regained some ground, however, and is at number 3 for men, up from 14 the previous year, but is clearly less popular with women, as the combined ranking is 8th. Mitsui is #30 for men, up from #43 a year ago and also less popular with women as the combined rank is #36. Sumitomo Corporation is at #38, down from #31 a year ago.

6 out of the top 10 choices for men are financial services companies – Nippon Life Insurance at #2 this year, up from #7 the previous year, Daiwa Securities at #4 (#3 the previous year), SMBC Nikko at #7 (down from #2), Mizuho Securities at #8 (down from #6), Mizuho Financial Group at #9, same rank as the previous year, Sumitomo Mitsui Trust and Banking at #10 up from #19.

SMBC had a big jump to #11 from #28 and MUFG is at #21 up from #29. However Nomura has significantly lost popularity, down to #27 from #17 and fares even worse in the combined male/female rankings, at #39.

Manufacturers are doing well – Sony up to #20 from #35, Toyota at #29 up from #49, Suntory up to #28 from #62. Panasonic is only at #67, but that’s a big improvement on #115 of a year ago.

The only non-Japanese employer for men in the top 100 is Accenture at #33, up one place from #34.

Overall, Japanese 21 year old men seem to have a preference for established Japanese companies that are performing well, pay well, and would make your mum proud.

“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.

Trends in Japanese company expatriation to Europe – or why are there so many Japanese women in Malta?

Despite a small decrease over the past three years, the UK continues to be the favourite destination in Europe for intra-company transferees – 8,684 as of October 2017 according to Japan’s Ministry of Foreign Affairs, compared to 8,518 in Germany. Japanese company sponsored expats in Germany and the UK make up about 58% of all Japanese corporate expats (around 30,000) in the EU/EEA.

If you add in their dependents, it comes to over 50,000 Japanese living in Europe, at the behest of their employer. This compares to over 250,000 in Asia and just under 120,000 in North America, out of 463,000 Japanese intra company transferees and their families in globally.

Of course the number of company transferees in a country is not purely a function of the market size. We crunched the numbers against population size and this interesting map showed up. The tiny dark spot is Luxembourg, where the population is only just over half a million and there are 175 Japanese intra company transferees resident. The UK has the next highest density, then Belgium, the Netherlands, Germany, Switzerland, France. The highest density in Eastern Europe is in the Czech Republic.

The Ministry of Foreign Affairs sticks to the old fashioned breakdown of male/female employees and Luxembourg is also an outlier there, with 41% of transferred employees being female, only surpassed by Ireland (46% 95/205 transferees), Malta (90% 19/21) and Cyprus (50% 2/4 transferees). There are very low numbers of Japanese female employees in Eastern European countries, and also Belgium. Maybe this has something to do with Toyota’s regional headquarters being in Brussels.

The average overall of female employees transferred to Europe is 25% of the total, and there has not been much movement in this over the past three years. The reason there are far more females proportionately in some countries than others has the same root cause as why there are more dense groups of Japanese in some countries than others – it depends on the industrial sector and the nature of the operation – whether it is manufacturing or services, or a regional headquarters.

The UK has a high density of Japanese company expatriates partly because of the three large Japanese automotive production sites there, but also because of the high density of financial services and holding companies in London and the South East. Japanese banks, trading companies and insurance companies send a lot of Japanese expats to their regional HQs, which are usually in the UK, including trainees on short term secondment, many of whom are female. Technology companies such as Sony, Ricoh and Canon also have large regional HQs in the UK and a high number of expats. Similarly Ireland has a lot of financial services companies, particularly aircraft leasing. Luxembourg does have a couple of large manufacturers headquartered there – FANUC and TMD Friction – however, as you might expect, most of the other companies are financial services related.

There also tend to be large numbers of expats every time production sites are set up – engineers on short term projects, involved in technology transfer. Double digit increases have occurred over the past three years in Japanese expats being sent to Poland, Sweden, Hungary and Slovakia following investments there.

But the biggest increases numerically have been 602 more expats in Germany (up 8% over three years), 359 more in the Netherlands (up 23% over 3 years) and 252 more in France (up 7%) compared to drop of 62 (1%) in the UK.

The Netherlands has been the choice of quite a few Japanese financial services companies, along with Luxembourg and Germany, for strengthening EU presence post Brexit, as well as a stronghold for logistics companies. Its tax regime has also been attractive for holding companies – more brass plate up till now, but it would seem, now with actual physical presence too.

So why are there proportionately so many Japanese women employees transferred to Malta? Maybe they’re working at Konica Minolta‘s service operation there for 35 countries in the region*. A lot of smaller countries, with English and other language speaking graduate populations – such as Portugal – are becoming popular bases for outsourced support.

This suggests to us that the UK may be slowly losing its grip on being the preferred base for regional, functional and services headquarters for Japanese companies, and therefore the preferred destination for Japanese expatriates. There is a long way to fall however.

* Andre Spitieri (non resident Ambassador to Japan from Malta) contacted me after I posted this blog to say that there are a lot of Japanese women working in Malta in the tourism industry. According to the Ministry of Foreign Affairs, there is only one Japanese company in Malta, and JETRO says it’s Konica Minolta. It may well be that there are branches of the big Japanese travel agencies in Malta, to which Japanese female employees have been posted, who are counted among the 19 female intra company transferees there.

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%

Nidec – work style reforms are “a bigger revolution than when in the Meiji era everyone changed from wearing kimonos to western clothes”

Shigenobu Nagamori founded electric motor company Nippon Densan in 1973 but it wasn’t until the late 2000s that he started on his overseas M&A buying spree, acquiring the automotive actuators and motors division of French company Valeo.

He began to realise that he would have to change the way Nidec worked in order to succeed overseas. According to a special feature in the Nikkei Business magazine, he was puzzled as to why Western employees worked shorter hours than in Japan and took more holidays, yet their companies’ performance was better than Japanese companies.

Many Japanese companies are looking to change their working patterns, under pressure from the Japanese government for ‘work style reform’ but “merely reducing hours worked will end in failure”. Nagamori was looking for a change of mindset.

Unnecessary meetings

One area Nidec tackled was unnecessary meetings. In just 4 months at one of their subsidiaries, Tosok, the number of types of meetings was reduced from 156 to 89, and their total occurrence was reduced from 716 to 440 a year. The number of hours spent on meetings fell from 533 hours to 240 hours a year.

Meetings that did not have a result were particularly targeted, such as the “related divisions information exchange meetings”. New rules were introduced such as:

Meetings should only take 45 minutes, or 25 minutes for short meetings
Participants should all be told the purpose of the meeting, the schedule and the expected results beforehand
Only the absolutely necessary people should attend
#2 should be reviewed at the beginning of the meeting
1 page per topic, distributed before the meeting
At the end of the meeting, conclusions and homework should be agreed, and who is in charge of each action point
The minutes of the meeting should be written during the meeting and circulated within 24 hours after the meeting

Missed deadlines

Another issue that was raised in the search for changing mindsets and work patterns was the continual missed deadlines for prototypes. Because the automotive industry has become so competitive, car manufacturers were shortening their development cycles. Trying to meet their short deadlines for prototypes was causing much of the overtime at Nidec. There was too much of a gap between the time when Nidec’s engineers discussed with the car manufacturers’ engineers and the order was officially made through the sales people.

So it was decided to make the order official once emails between then engineers reached a point of certainty. This shortened the gap to starting new development work by 3-9 weeks, with a significant reduction in missed deadlines.

The basis for these changes in Nidec’s way of working came from Nagamori’s appointed successor, Yoshimoto, who had become a Master Six Sigma Black Belt when he worked at GE.

Ensuring women are promoted

Initially Nidec hoped to set a target of women comprising 15-20% of managers by 2020, up from the current 2.8% but this has been revised down to 8%. “There is no point in forcing women to be managers if they don’t want to do it” Nagamori states. Reforms have been introduced such as being able to work from home, being able to shift working hours 1 hour either side of the set start and finish times and also being able to take holiday in 1 hour units. These apply to male or female workers, but are intended to make caring for a family easier.

Nidec has also invested in changing work patterns on the factory floor, with robotization and Internet of Things, as well as investing in management development, to empower managers to take decisions and also improve their English ability.

English language and management capability

The feature finishes with an interview with Nagamori, where he asserts that to reduce working hours, you have to improve productivity first. For example, in Japan it is common to make courtesy calls on customers without any real reason. “It’s not a total waste of time, but it is not directly productive.”

“Japanese productivity is about half that of Germany. So we need to double our productivity in order to get to zero overtime. If you just cut overtime to zero, you have to either hire more people or cut salaries. Both would be a mistake.”

If overtime disappears, then juniors will no longer get overtime pay. Nagamori remembers a time when he too mainly used his overtime pay to live off, saving all his bonus and salary. “30, 40 years on, Japanese society has not changed” he points out. He says an employee wrote him a note to say that he had a loan on the basis of him doing 50 hours overtime a month. So if he didn’t get overtime pay on that basis, he would not be able to repay the loan.

So he currently tries to give the overtime pay reduction back half as bonus, and the other half as training subsidy. This is not the same for everyone – those with high productivity get higher bonuses. “It’s a big problem that currently those with low productivity stay late and get overtime pay and those with high productivity leave and have lower pay.”

“About half of overtime is work that doesn’t really need to be done, so that’s easily got rid of, but the other half is necessary work, and reducing that is not so easy.”

“ The biggest revolution is to get people to recognize that overtime should be zero. ‘Look at the West, nobody is doing it’ you have to tell everyone”

“It’s not easy for Japanese companies to switch to Western ways of doing things. It’s a bigger revolution than when in the Meiji era everyone changed from wearing kimonos to western clothes.”

Nagamori says the reason for the lack of productivity in Japan is firstly English language ability. “Phone calls take twice as long and you need to pay for translators for negotiations.”

“Also, managers lack management capability. They don’t question why their team are doing so much overtime. They don’t understand what their team are doing. If they said – ‘do this work and then go home’ then there wouldn’t be so much overtime.”

“In the West there are plenty of positions for specialists, but in Japan there are people who don’t have management ability in line positions.”

Last updated by Pernille Rudlin at 2022-07-12.

Women in Japanese companies

Category: Women in Japanese companies