The Japan Business Federation (Keidanren), the alliance representing big business in Japan, has reached an agreement with the country’s universities to expand recruitment of new university graduates to a year-round hiring system. This agreement marks a major shift from the traditional schedule that relied on a strict, single mass recruitment schedule. Amid a growing emphasis on skills-based hiring, starting in 2022, companies represented by Keidanren will be shifting to a multi-track approach and hiring schedule.
The Nikkei reports that the Japan Business Federation and representatives of Japanese universities will meet at an employment roundtable conference on April 22nd at which they will finalize a report setting forth a policy that will promote year-round recruitment. The recommendations in this report are expected to be reflected in the discussions at the Future Investment Conference, where the government is discussing how to better develop the country’s human resources. Actual implementation will begin with spring 2022 corporate recruitment, with year-round recruitment being expanded from that point on.
This shift will likely have a significant impact on other traditional Japanese-style employment practices, as well, such as seniority-based hiring and promotion.
Observers also point out that the move away from a single mass hiring schedule will benefit foreign students studying in Japan and Japanese students studying abroad who are often shut out of corporate recruitment if they are not in Japan during the hiring season.
Shift to diversifying corporate recruitment
The current recruiting system
In the current recruitment schedule, by mutual agreement companies are prohibited from holding interviews or company information sessions for third-year university students; this is to prevent them from jumping the line by making early offers to the most desirable candidates. Students then start their fourth year in April (the start of the academic and work year for many Japanese companies), but companies are still prohibited from holding interviews as late as June. After that time, they can start recruiting and interviewing seniors. Unofficial job offers are usually made as early as October. Students graduate in March of the following calendar year and start work in April.
The proposal that Keidanren and the country’s universities are putting forth will have the traditional recruitment path stay in place, while also allowing for two new hiring schedules. These are:
Interviewing after graduation
The first new recruitment schedule would allow students to start interviewing with companies after graduating in April. They would then start work sometime after receiving an offer in April or even later.
This recruitment schedule would benefit students studying abroad, for example, or foreign students studying in Japan who might otherwise miss the traditional interview season that takes place during the fourth-year of university. Companies seeking students who have overseas study and work experience and companies looking for foreign students with Japanese language skills currently in Japan would be able to use this recruitment process to find more suitable candidates.
Emphasizing work experience in hiring
The second new recruitment process would place a heavy emphasis on actual work experience. In this hiring process, companies would offer internships to current university students. They would start working as full-time employees immediately after graduation, without having to go through a formal interview process.
Drawbacks of the current system: Mismatch in hiring
With globalization and digitization of the economy, companies in Japan are increasingly trying to remain competitive by hiring employees who have a strong background in information technology, as well as foreign cultures and languages. Currently, more and more companies are finding that there can a mismatch between their needs and what students (and future employees) actually want to do because students have to accept or reject job offers in such a limited time (usually in the spring when formal offers are made).
Companies have a growing need to select students who want to put to use what they’ve learned through study abroad or internships, and this can only happen if they are able to interview and hire students throughout the year.
The report that will be presented at the roundtable is said to propose a multi-track approach to hiring (described in the section above) that emphasizes IT and other specialized skills and will also consider what a future employee actually wants to do at the company.
Companies represented by Keidanren would like to increase the opportunity to hire people to work in jobs that require advanced technology and marketing knowledge, such as AI (Artificial Intelligence) and FinTech.
A multi-track approach to recruitment will also mean that there will be more companies hiring at any one time, as they are able to choose from a more diverse pool of applicants: not just fourth-year university students, but also recent graduates with study-abroad experience and students who have done long-term internships.
Keidanren has said that the rule prohibiting the interviewing of third-year students in March and fourth-year students as late as June of their senior year has been a non-binding rule, but was always observed by companies as a part of the collective hiring process. However, the organization officially abolished the rule in October 2018. Still, the government plans to continue with this formerly unofficial rule through the spring 2021 recruiting class.
Even with the introduction of multi-track recruitment, observers point out that there are still many companies that would prefer to and will still hire most new employees in one-go during the traditional spring hiring season.
Impact on academic performance
Universities have expressed their concerns about the impact of the this new multi-track recruitment approach on students’ academic performance, as some students may neglect their studies in order to focus on internships, for example.
In reply to this, the report jointly prepared by Keidanren and university representatives calls for strict graduation requirements and emphasizes that overall academic performance, including research and the graduation thesis, should be important considerations in the recruitment process.
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Lead photo: Company Information Session in Japan via Wikimedia (Flickr user Dick Thomas Johnson)
Source: Nikkei Shinbun, April 19, 2019