Episode #549: Leading Japan's Most Difficult Generation Of Workers

Leading Japan’s Most Difficult Generation Of Workers
Leaders now face a pivotal moment in business in Japan. Do they continue to cling to the past? Do they replay what they went through when they were younger and lead as they were taught by their seniors or do they change the angle of approach?

Japan rebuilt itself after the devastation of the war. The workers slaved away, adding a notch to their collective belts as they slowly overtook the GNP levels of leading European countries. I remember how proud some Japanese company employees were when they overtook the UK. They were winning the post-war economic battle after having lost the wartime military struggle. Getting to global number two status was built on the 6 days a week working dedication of today’s retired great grandparents.

Not only six days a week, but incredibly long hours and long commutes. Sundays were spent playing golf with clients. Company holidays were shared with colleagues, as well as beers after hours. In a nutshell, men worked at the same company until retirement and married women had to quit their jobs to raise the kids. For the men, there was not much family time, and the women were basically raising the kids on their own, like single mothers, but with more stable incomes.

When I arrived here on April 1st, 1979, it was still like that. School and work were six days a week endeavours. There were few women in business after marriage and usually only one breadwinner in the household. While I was studying at university, I used to teach English at companies at night. Sure enough, they were still there, the salarymen reading the sports newspaper at their desk, wasting their time waiting for the boss to leave, so they could go home.

Even when I came back for the third time to work in 1992, when interviewing sales staff for jobs, often they would tell me they quit their company because the long hours made them exhausted and ill. When I heard that same story repeatedly, I connected it back to my earlier experiences of the 1970s and 1980s and knew they were telling me the truth.
These are the people who have been doling out the OJT - On-The-Job Training - to each succeeding generation. What about today, though, when there are many more job openings than enough people to fill them? The drop off in overseas study has made the competent English-speaking Japanese staff member a rare bird, compared to a few decades ago. This young generation of Japanese staff holds the whip hand in the current employment configuration between boss and workers.

Are companies doing anything about this, other than whining about how hard it is to hire people? From what I can see, they are focused on whining rather than taking the right actions. OJT has been a smokescreen for doing very little for a long time. The spread of the personal computer drove a stake through the heart of OJT. Let me explain why. Bosses now had to do their own typing, rather than having female secretaries do it for them.

I am going to digress and tell an interesting story about how much things have moved on. The average age of my fellow Rotarians in my Tokyo Rotary Club is 70. It is changing now, but twenty years ago, it was not uncommon for these gentlemen (and until very recently they were all men) to give me their business card, but sans an email address. Why? They were captains of industry, but not computer literate. They depended on their secretaries to take care of all their correspondence, including this newfangled thing called email on a computer, involving something called the internet.

Their Middle Managers were also under attack. Their time was increasingly being consumed with emails and meetings. In this messy mix of modernity and technology, time became tighter, and that meant the coaching component of OJT was truncated down to the bare minimum. Over the last twenty years, the number of young Japanese has halved. That process has been gradual, like a creeping demographic rust in the corporate machine. Now the Middle Manager class is waking up and discovering that there is a shortage of young people.
OJT hasn’t properly trained them in leadership and here they are, facing a dilemma which has never been confronted before in the post-war period. This generation are the first free agents in the Japan working world, able to pack their stuff up and jump ship without stigma, hesitation or remorse.

Until Yamaichi Securities went under in 1997 and put a lot of hard-working people on the street, there was a reluctance, a taint, to hiring people mid-career. That event changed the stigma, as those staff were picked up by other companies in the finance sector. The Lehman Shock on September 15, 2008, was another dam burst of good people losing their jobs in a bad economy and having to join companies as mid-career hires.

Today’s younger generation have grown up in a completely different world and have no problem with changing companies after a few years. The Dai Ni Shin Sotsu or second graduation generation has seen 30% of the three-to-four-year new entry staff quit. This was unthinkable in the past and that number will just continue to grow.

Are today’s Middle Managers in their thirties and forties able to handle this major change in work culture and rise of free-agentism? Are companies giving them training to deal with this changed reality? My observation is “not yet”. Clever companies will dump relying solely on OJT and provide the required training. They will be able to harvest a wave of available, mobile talent by creating environments attractive to these in-demand young people. This war for talent is real. It is a zero-sum game in Japan of winners who can recruit and, importantly, retain key staff, and the losers who will become the training grounds for the staff who simply move to the winners.