Episode #70: Retain Staff Or Perish

We are in a temporary lull in the war for talent, thanks to Covid -19. In short order, things will be back to normal though with all of us facing a shortage of suitable young people to hire. Are we ready to the resumption of hostilities?

They are just not making enough future workers here in Japan. The required birthrate for stopping population decline is 2.1 but currently Japan is only at 1.36 Much more effort needed here obviously, but the prospects for a baby boom do not look promising. Couples are marrying less and those who do are marrying older. They are having fewer kids as a result. Fewer young people coming into the workforce is naturally going to make hiring youth talent so much harder.

Who do we want to hire? Young Japanese who can speak English well. If we take into consideration the large decline in young Japanese studying overseas, then the future talent pool of fluent English speakers also shrinks. Japan is actually going backwards in terms of globalization of its workforce. Fast Retailing boss Tadashi Yanai picked up on this trend a few years ago when he complained that, “young people are comfortable with life in Japan. We promote things they despise – going global and studying English”. Our pool of the most attractive educated youth talent in Japan is drying up.

Before Covid, foreign companies here told us that even getting job applications from graduating students was proving more and more difficult. Covid has temporarily made getting a job more difficult for young graduates, but pretty soon it will be back to normal. That means students getting multiple offers again. So even at the job offer stage, the competition to actually get them on board will be fierce. I have interviewed young graduates with almost zero experience and average English, despite studying overseas and have been amazed at the number of offers they have received and the amount of money they are being paid.

Our troubles don’t end there though. When things get back to normal we also know that 30%-40% of new entrants will be ditching their employer after three or four years and heading for greener pastures. So getting them and keeping them is only going to grow in importance.

Companies who invest in continually training these young people and their middle managers will do better in this talent war. The young demand it and their supervisors need it. How is your succession planning coming along? If you haven’t confronted this issue yet, trust me, you soon will.

Action Steps

1. Prepare for the talent war right now
2. Provide quality training to the new entrants to keep them engaged with your organization
3. Train supervisors about their role in retaining their staff