Recruitment & HR Development

Reasons Why Global Companies May Fail to Hire Local Staff

Hiring local staff is essential in order for Japanese companies to succeed as global companies in the Asian region. It is not only Japanese companies, but also various foreign companies that are advancing into the Asian region, and it is becoming an intense competition for excellent white-collar personnel. Japanese companies are struggling to hire local staff and we will proceed to explain the reasons for this.

It is not Japan’s style to hire ready-trained workers, which is common in overseasHiring for immediate use overseas largely does not fit Japan’s style

The purpose of Japanese companies advancing into the Asian region in the first place was to reduce labor costs. Japanese car manufacturers and consumer electronics manufacturers set up factories in the Asian region and hired a large number of employees at low cost, and achieved great success. At that time, their approach of hiring and training even young people without skills was novel in the Asian region. However, because Japanese hiring methods and hiring standards have not changed even where Asian countries have achieved economic development, Japanese companies ended up falling behind.

“Hiring for immediate use” is the main way that foreign companies hire in the Asian region. The era where labor was cheap has gone, the pay level in the Asian region has been steadily rising. Japanese companies’ previous strategy of hiring inexperienced people at a low cost no longer applies.

The salary offered by Japanese companies is not proportional to the development of Asian countries

The main motivation of employees in the Asian region when choosing an employer is “pay level”. Even when changing job, “pay increase” is the number one reason for moving. In such a hiring market, it is important to know what pay level rival companies are offering.

The belief that Japanese companies offer competitive salaries no longer holds true in the Asian region. In fact, not only the wages of Japanese companies that are lower than those of foreign companies but in other aspects such as welfare programmes, Japanese companies also end up falling short and being deselected in the early stages of hiring.

The hiring process is lengthy if conducted in the Japanese style 

Long selection time when hiring local staff is another reason why Japanese companies fail to successfully hire locals. When hiring in the Asian region, it is typical for the interview to be done once, and the results of selection to be made on the same day or the next day.

In Japanese companies, however, like when hiring within Japan, interviews are done multiple times, and the announcing of selection results used to take as much as one week, so personnel in the Asian region end up accepting positions with other companies.

Foreign companies are quick to hire because they are hiring for immediate use for the desired position. In other words, because the skill standards for the desired personnel are decided, when a person who satisfies those skills comes for the interview, their hiring is decided immediately.

The hiring process in Japanese companies favours having 1-to-1 sessions with multiple candidates in case there are better people for the role, and this can take a lot of time. It is because of this that they end up getting a late start in acquiring excellent personnel in the fierce battleground of hiring. When hiring in the Asian region, speed is the key to success.

Many people value family rather than work

A company looking to hire in the Asian region must consider the difference in the ways of thinking towards companies and the countries’ social security. What is peculiar to Japanese people is the belief that “if I find a job in the company it will protect me” or “I have the country’s social security after retiring”. People in the Asian region do not have this way of thinking.

Also, among employees in Asia, there are many people who put family before work, and in case a company imposes long working hours at the expense of time with family, there is a need to consider offering increased pay or fast-track promotion as compensation when hiring.

What is necessary to hire excellent local staff?

In order for global companies to hire excellent local staff, it is first necessary to remain abreast of the pay level of the local talent market. As well as conducting selections speedily, it is important to consider the local culture when offering roles and compensation. 
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