"We post job openings but get few applications." "We meet a great candidate, only to have them decline our offer." Many foreign companies struggle with hiring in the Japanese market. Behind this are several structural factors, including a limited understanding of the Japanese labor market and candidate psychology.
- The company uses job boards and recruiting agencies, but struggles to build a strong applicant pool
- Candidates progress through selection, only to decline at the final interview or after an offer
- Candidates are being taken by other companies, especially large domestic firms
- It is unclear whether hiring requirements and compensation match the market rate
This article explains why foreign companies struggle to hire top talent in Japan, and how to improve the situation.
The Structural Factors Behind "We Can't Hire"
In the Japanese labor market, a certain share of candidates place strong weight on a company's brand recognition and stability, which tends to put foreign companies with low awareness in Japan at a disadvantage when building an applicant pool. In addition, the speed of the selection process and the timing of the offer strongly influence a candidate's decision, so companies whose overseas headquarters take time to approve hiring decisions can lose candidates to other companies that move faster.
Common Factors and How to Address Them
There are several reasons hiring does not go well; the most common ones, along with directions for improvement, are as follows.
| Factor | How to Improve It |
|---|---|
| Limited brand awareness and trust | Build employer branding (EVP) that communicates the company's appeal, such as its growth potential and the scope of responsibility it offers |
| Slow selection speed | Clarify in advance which decisions require headquarters approval, and design a selection process that can be completed locally |
| Compensation out of step with the market | Set salary ranges and grades based on Japanese market rates |
| Mismatched recruitment channels | Choose media and recruiting agencies suited to the talent pool for the target position |
Practical Steps for Improvement
The first step is to identify where the bottleneck lies in the hiring process. The right measures differ depending on whether the problem is in building the applicant pool, the selection process, or the offer stage.
For foreign companies in particular, candidate enthusiasm often cools while waiting for a headquarters decision, so allowing part of the selection process to be completed under the Japan entity's own authority is an effective way to strengthen hiring capability.
Summary
- Hiring difficulty in the Japanese market results from several factors working together — brand awareness, selection speed, compensation benchmarks, and recruitment channels
- Build employer branding (EVP) that communicates the company's appeal to offset limited awareness
- Clarify which decisions require headquarters approval and build a process that increases selection speed
- Set salary ranges and grades based on Japanese market rates
- Identify where the bottleneck lies in the hiring process and prioritize improvements accordingly
Contact
JBN provides one-stop support for hiring strategy tailored to Japan-specific hiring trends and compensation levels, through to recruiting specialized talent.
To discuss your hiring challenges, please contact us.