Thursday 3 July 2014

Life Employment in Japan - A Personal View

"What we can't understand about you, Villiers-san, is how rootless your life seems to be. You came here from Hongkong, and before the law you were in logistics, and before that we don't even know - London was it?..." said Tanaka-san, my boss, during coffee break one day.
 
From a Japanese perspective I understood exactly what he meant. This was the 1990s and I was in Tokyo working in the legal department of a big Japanese company, Mitsui OSK, the shipping arm of the Mitsui group. Although technically split up by General MacArthur during the Occupation of Japan after the Second World War, Japanese corporate life was still dominated by these conglomerates. Mitsubishi had a bank, a trading company, the world's largest shipping company and so on, and Mitsui was much the same.
 
Apart from me, everybody (the men anyway) in the legal department was there for life; or, at least they were in the company for life, possibly changing department from time to time.
 
What did this mean? It meant that all my Japanese colleagues (and that was 99 % of the total in our building of 1000 odd staff) had been employed directly from university and would stay with Mitsui until retirement (this had been age 55, but shortly before had been increased to 60). University courses were 4 years and ended in March. All 'new faces' - whether they were starting with Mitsui, Toyota, Toshiba or other large company, started work on 1 April, when they were all 22. Mitsui OSK took 80 such young men (and 60 girls as 'office ladies) the year I was there. Accommodation for single 'salarymen' (and increasingly for office ladies too) was offered; I recall our personnel manager telling me that with people marrying later these 'dormitories' were being used for longer and longer. He also said that the company had had to revise their requirements for female staff. Instead of working from 22 to 25 (when they married and left) as before, ladies were staying on to nearer 28, so he needed to recruit only half.
 
 In return for a guaranteed job they (from our western viewpoint) gave up an awful lot for the company. For instance they would take virtually no holidays, apparently considering that it would be unfair on their colleagues if they were away. They also worked very long hours. Time in the office seemed to bear little relationship to how busy they were. My time there coincided with the start of the 20 year relative decline in the Japanese economy, so rather than working all the salarymen spent their evenings ringing their hands about the company's uncertain future prospects. I went home, or to the gym.
 
In Mitsui the first significant date after entry into the company was after 15 years and 3 months. At that precise point (1 July in the relevant year) all these (by then) 37 year olds got an inkling as to their future. Some were really promoted to assistant manager - like my friend Mr Tanaka - while others were slightly sidelined, very possibly being assigned to the famous 'seat by the window', i.e. without much future prospect. Amazingly though, according to Mr Tanaka, who was about 38 at the time of our little chat, his less successful colleagues were compensated by getting a larger pay rise than he did to make up for their loss of face. They still didn't take the hint and leave.
 
Although the life employment system seems to be somewhat rigid and inefficient, and in any event is slowly disappearing as Japan continues its long depression, one can say it has certain plus points. Firstly of course company loyalty, and secondly an ability for a company to use the skills of its younger staff. Older managers who can't handle computers do not fear being fired or being overtaken by younger whizz-kids, while the whizz-kids, are not afraid of making suggestions for improvements.
 
On a final note, I'm sure stress levels are reduced under a life-employment system - and perhaps this is one reason (apart from diet) for Japanese longevity. It's a pity it's on the way out!

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