How to set salary levels when hiring in Japan is a question many foreign companies struggle with. Applying headquarters' pay table as-is can leave pay out of line with the Japanese market, so applications do not come in or offers are declined.
- It is unclear whether headquarters' pay table can be applied to Japan as-is
- It is unclear what to rely on to check going rates for pay in Japan
- Terms differ by candidate, and there is worry about maintaining fairness internally
- There is not enough material to explain the pay to headquarters for approval
This article explains how foreign companies can decide salary levels when hiring in Japan.
Why Headquarters' Pay Table May Not Fit
Salary levels differ greatly by country or region, industry, and company size. It is not unusual for headquarters' pay table to be out of line with levels for the same role in Japan.
In Japan, terms also tend to be considered as a total that includes bonuses, various allowances, and benefits in addition to monthly pay. The way pay is presented needs to be designed as well.
What to Weigh When Setting Salary Levels
Salary levels are judged by combining several kinds of information like the following.
| Perspective | What to Check |
|---|---|
| Market level | Information on pay levels in Japan for the same role, industry, and years of experience |
| Candidate's experience and role | The scope of responsibility of the role and a position that fits the candidate's experience |
| Internal fairness | Balance with existing members and consistency with grades and the evaluation system |
| Composition of pay | How monthly pay, bonuses, allowances, and benefits are presented as a total |
| Headquarters' budget and approval | The range of headquarters' budget and the material needed to gain approval |
Running the Levels You Set
Designing salary ranges and grades in advance reduces the time spent agonizing over each hire. Recording the basis for the ranges also helps when explaining to headquarters and checking internal fairness.
Review salary levels as the market changes. Check them regularly while looking at how hiring is going and the reasons offers are accepted or declined.
Summary
- Headquarters' pay table may not match market levels in Japan
- Combine market levels, the candidate's experience, internal fairness, the composition of pay, and headquarters' budget
- Design salary ranges and grades in advance and record the basis
- Review levels regularly while watching how hiring is going
Contact
JBN supports foreign companies in hiring in Japan, from organizing salary levels through to hiring execution.
To discuss designing your salary levels, please contact us.