What’s in Store in 2021 for Japan’s Recruitment and TA Market
By Yan Sen Lu | Managing Director, Makana Partners
A global pandemic, social unrest, political and economic turbulence – many label 2020 as the ‘lost’ year. It was also a year no one saw coming. As we turn the page to 2021, the year of the mighty ox, we look into our crystal ball to try and get a better picture of what lies ahead.

New Suga Government
Yoshihide Suga was elected as Prime Minister of Japan on September 2020 following Shinzo Abe’s sudden resignation. His campaign platform focused on continuing with Abe’s ‘Abenomics’ and foreign policies, consolidating regional banks and lowering mobile costs, and wheeling in the pandemics.
Although he had exceptionally high approval rating when taking office, at 74%, by December 2020, it dropped significantly to 42%. Many disapproved of his handling of COVID-19, and he was forced to suspend the ‘Go To Campaign’ designed to revitalize the domestic food and travel industries. At the time of writing, Japan had just recorded a record 6,001 cases and the government is due to announce a second state of emergency for Tokyo and the surrounding prefectures. As Suga is seen to prioritize the economy, we predict that he’ll continue to deliver stimulus packages and wage subsidies. However, due to his falling approval rating, his ability to secure a second term in the September 2021 elections is questionable.
Resilient Unemployment Rate
Japan’s unemployment rate unexpectedly dropped to 2.9% in November 2020, the lowest in five months. At the same time, the job-applicant ratio (number of jobs per applicant) climbed to 1.06, the highest in four months.
On the surface, this looks rosy but we have to remember these numbers are released with a two-month delay and considering the pause on the ‘Go To Campaign’ and the spike in COVID-19 cases, unemployment numbers are sure to increase again. Having said that, the majority of these positions are affecting the hospitality, service, restaurant and retail industries. We foresee that the demand, as well as the challenges in attracting bilingual professional, will remain, particularly in the technology, renewable energy and healthcare industries.
From the candidate’s perspective, we have what we call in the recruitment industry ‘last-in, first-out’ phobia. Due to the historic life time employment system, Japanese companies in particular will refrain from restructuring at all cost and the Japanese government’s wage subsidies are helping them do so. Employees earn ‘loyalty credits’ the longer they’ve been with the company and so if restructuring does need to happen, those that have the shortest tenure are the first to be let go. Because of this and the perceived uncertainty around the economy, individuals often prefer to stay with their employer rather than look for external opportunities, making finding bilingual talent difficult.
Polls conducted in September 2020 showing the hiring and job search status of our network.
In addition;
WFH Side-Effects
In 2020, the physical location of an employee mattered less. As companies implement work from home to combat the pandemic, organizations are seeing an increase in output while employees enjoyed increase efficiency as they avoid 60-plus minute to commutes to the office. After a slow start, Japan Inc. including Hitachi, Fujitsu and Calbee has implemented telework allowing their employees to work from home while slashing office space and its associated costs.
On the flip side, WHF has resulted in less employee engagement and sometimes even overwork. Many have found themselves with full schedules with their peers and superiors are sending meeting invites without consideration for breaks. In addition to the added distractions of SNS, Netflix, balancing work and life is seen to be as challenging as ever. As such, poll after poll has suggested that workers prefer a hybrid model of being able to work at the office or at home. How to successfully make that work is another question. One thing is for sure – companies that don’t offer work from home will have a tough time competing with companies that do.
Along with the inception of working from home, companies now also need to recruit, on-board and manage their employees virtually. HR along with the internal IT departments have been particularly busy implementing new systems and processes to accommodate this. We expect this trend to continue with more prevalence. In addition, expect to see new technologies trying to recreate the lost ’watercooler culture’ ubiquitous in the traditional office.
Thank you to Yan Sen Lu for this contribution, we hoped you found it insightful. (And if you liked this article, don`t forget to Follow Us on LinkedIn. Thanks in advance!)
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