A temblor, a tsunami, and a stressed-out generation of first-time job seekers.
By Hitoshi Suzuki
If Japan’s college seniors in 2010 felt the job market was bad (only 62.5 percent had job offers as of October 2010, 7.4 percent fewer than the previous year), this year’s crop is sure to be feeling the pinch. In fact, both Japanese college seniors and employers are facing difficult choices in this recruiting season.
As we all know, on March 11, 2011, Japan was hit by a magnitude-9 earthquake, one of the largest earthquakes ever recorded, followed by a monster tsunami that ravaged the towns and nuclear plants of the country’s northeast coast. The victims of the tragedy are still being rocked by aftershocks and trying to come to terms with the uncertainty precipitated by the Fukushima nuclear crisis. The sequence of tragic events has had a great impact on the economy and companies nationwide across many industries: Reduced production from the parts manufacturers in the affected areas is causing parts shortages not only in Japan, but worldwide, and rolling blackouts have interfered with the production of goods and services.
How are these circumstances affecting students and recruiting activities? Leggenda’s survey of student sentiment shows that 70 percent of college seniors are anxious about a “decrease in the number of jobs” and a “delay in employers’ selection processes,” thus potentially impacting their prospects of finding jobs that would commence April 1, 2012. (April 1 is the day the vast majority of new college graduates traditionally start their working careers every year.) Many also say that they are worried about the difficulty of remaining positive and are concerned that their schoolwork will be affected. Indeed their worries are well founded: Companies are already delaying their selection processes, which means that the already lengthy recruiting process might be prolonged.
Why would a couple of months delay have such a big impact on college students in this market? As regular HRO Today readers are already well aware, recruiting processes vary considerably from country to country, and Japan has one of the most unusual processes. An especially rare college recruiting practice, among others, is called “Shinsotsu Ikkatsu Saiyo” or “simultaneous recruiting of new graduates,” which is only seen in a few countries, such as Japan and Korea. This practice has its origin in 19th-century Japan and became a generally accepted practice in the post-war period due to the “bulk” hiring that companies did during Japan’s miracle post-war economic growth. In addition to other characteristic employment systems such as “Nenko Joretsu” (seniority wage system) and “Shushin Koyo” (lifetime employment system), the nation’s university system and schedule also play an important role in defining this practice. The academic year in Japan runs from April to March; with few exceptions, Japanese students enter university in April, graduate in March, and enter a company very shortly afterwards on April 1. This lengthy process is fraught with complications.
Here’s how the student recruiting cycle plays out:
October of junior year:
• Companies start accepting job applications.
• Students start applying for jobs and registering with job boards.
October through March of junior year:
• Students go through an unofficial (or official for some
companies) selection process, including attending a “job search seminar” for each company that they have applied to, where companies provide information about themselves to applicants and collect information from, and even test, applicants.
• According to a Leggenda survey, students apply to 100 jobs on
average during this job search period, and spend a vast majority of their time in the search.
April 1 (very first day) of senior year:
• Companies officially start interviewing.
April through May of senior year:
• Companies issue “Nainaitei” (informal job offers with one-week
to one-month expiration dates) to top candidates.
• Many companies do a second or third round if targeted
headcounts are not reached.
• Once students accept a job offer, they shift their focus back to
school work, including (but not limited to) conducting research, writing a graduation thesis, and attending academic conferences.
The primary check on this recruiting schedule is restraint on early recruiting addressed in “Rinri Kensho” (ethical charter) set by “Nippon Keidanren” (The Japan Business Federation). This charter was created at universities’ request to set standards for, and restraints on, early recruiting—so as not to interfere with students’ schoolwork.
Old Rules, New Rules
The main rules are as follows:
• Companies shall not engage in any selection process until
April 1 of senior year; and
• Offers should not be made until October 1 of senior year.
Hence, oddities such as “job search seminars” and “informal offers” exist to bend the rules. That is to say that not all companies in Japan obey or are compelled to obey the charter; many companies start the selection process and make offers while students are in their junior year, but most major Japanese companies follow the charter. In any event, amendments and additions to the charter for April 2013 hires are under discussion.
Getting back to the college seniors currently being affected by 3/11, they were supposed to have been deeply involved in the selection process; by now, they would have attended a number of seminars in March, interviewed, and started receiving informal offers in April. However, due to events on 3/11, many companies including major players decided to suspend their selection processes to provide fair job search opportunities to all students and to let those affected focus on recovery. Many announced their processes would not resume until May or later or June or later, as the situation remained unpredictable. Both Toyota and Panasonic, for example, announced they would put on hold all their recruiting activities until June or later. While these measures appear compassionate (perhaps even detrimental to these large companies) and oriented toward giving affected students equal opportunities and time to focus on their lives, the majority of students are much more worried than in years past. Compounding the vagueness of the company announcements, and notwithstanding the turmoil and stress that the incident has caused, not only do they worry that companies will freeze their recruiting activities or decrease hiring targets, but also they worry that they have to choose between school work and a job search that could be in tatters.
A Global Issue
Non-Japanese companies that are hiring new graduates in Japan are equally affected, even if they have not postponed new graduate recruiting. The uncertainty will make it harder in some cases than usual to retain candidates or to get a firm commitment from candidates.
Let’s say you are an employer looking to hire new graduates in Japan. Normally, your company’s recruiting competitors make offers at around the same time in April or May as you do, thus your candidates have all the other offers on the table, along with yours. They can effectively compare offers, and in a short period of time you can know whether or not they have accepted your offer. Forecasting headcount can be done.
However, this year will be a different story. Even if you make offers in April, many of your competitors for new graduates have postponed their selection process until June, so, if you are not the clear first choice in the minds of candidates, chances are that they might reject your offer and stay in the market until their first choices restart their recruiting activities. Yet, you might benefit from the situation if candidates adopt a bird-in-hand-is-worth-two-in-the-bush strategy, decide not to wait until June or later, amid all the uncertainty, and end their job search by accepting your offer. On the other hand, for those companies that postpone their search, opportunities to obtain the best talent could be lost— candidates might take the early offers.
It’s hard to say what’s right: to be cautious and suspend recruiting or go full steam ahead under such circumstances, but one thing we can say is that at the very least it is imperative that more sensitivity in communication needs to be brought to bear on each student’s situation, including but not limited to awareness of their fears and concerns, the condition of their hometown, companies of choice, and academic schedules and aspirations.
Hitoshi Suzuki is an associate manager for recruiting specialist Leggenda Corporation in Japan.