This post is also available in: Japanese
The two newest entrants in the rankings that my company compiles of the biggest Japanese employers in the UK are both recruitment agencies – Trust Tech and Outsourcing. Both companies have acquired several recruitment agencies in the UK – as well as in Germany, Netherlands and Poland – over the past 4 years.
This is bringing back memories for me of 13 years’ ago when I acted as consultant to another Japanese recruitment agency, who had acquired several companies in the UK and Eastern Europe. They asked me to find ways in which these companies could cooperate and collaborate with each other, to enable a more integrated structure and strategy in Europe.
I quickly found, however, that each recruitment market in Europe was very local, with their own customs, laws and regulations. The Japanese company ultimately withdrew from Europe, as it had itself been acquired by a bigger Japanese recruitment company and its strategic focus became much more domestic oriented.
It is not clear what the strategic intention of the Japanese recruitment companies in expanding in Europe is this time, beyond growth in turnover. They mention providing manufacturing and IT staff to Japanese customers who have operations overseas, but I’m guessing this is more likely to be in Asia than Europe.
Japanese manufacturing in Europe is moving eastwards, so having a presence in Poland, Czech Republic or Slovakia may well be useful in assisting Japanese companies there.
As for the UK, there is a shortage of people with engineering and IT skills and this looks set to worsen, thanks to Brexit potentially restricting rights of EU citizens to live and work in the UK. The number of people coming to the UK from the EU has already fallen dramatically, causing labour shortages in healthcare, construction and food processing sectors.
Apart from the impact of Brexit, the main change in the UK recruitment sector in the past decade is the increase in regulation and compliance. The reason that Japanese recruitment companies suddenly find themselves amongst the biggest Japanese employers in the UK is that temporary workers are now considered under law as employees of the staffing agency, and have rights accordingly to pensions and other benefits. Staffing agencies must therefore comply with UK legislation such as reporting on the gender pay gap and complying with the EU’s General Data Protection Regulation.
Industry experts say that recruitment in Europe is no longer about just sourcing candidates and placing them. Labour shortages and pressures to hire people with more diverse backgrounds mean that recruiters have to be more innovative and better at gaining insights from data, to help their customers revise job roles, benefits and salaries to make themselves more attractive.
This means being as close as possible to the customer and the local pool of potential recruits. I am not sure therefore, how Japanese companies can add value to this sector in Europe, or indeed learn from it. So maybe their acquisitions are just about growing revenue, after all.
The original version of this article was published in Japanese in the Teikoku Databank News and can be found in “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” available as a paperback and Kindle ebook on Amazon.
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