Jan 3, 2018
Dealing With Companies’ “Senior Problem” In Japan
A senior problem in the past meant having a “senior moment”, where you forgot something and this lapse hinted at oncoming dementia. Today in Japan it has an entirely different meaning and refers to the demographic problems Japan is facing. Japan is aging rapidly and there is a lot of discussion about the impact that will have on the welfare, health and pension systems. What is not being discussed much as yet is what to do with all of these “young” oldies?
They are reaching 60, which is retirement age, yet they will have many decades of life ahead of them. They are healthy, active, relatively digital, have large networks and considerable experience. They all know the Government pension system will breakdown under the weight of their cohort’s numbers impacting on the cost of the system. They are not confident about having enough money to last their lifespan, so they want to keep working.
Japan’s working population of those aged 15-64 will decline from 65.77 million in 2013 to 37.95 million by 2060, that represents a 42% drop. The ratio of job offers to job seekers in November 2017 hit 1.56, the highest since 1974. Here we have the issue, there are not enough younger workers available to match the corporate demand. Yet at the same time, the population itself is getting older. Bringing in foreigners to make up the difference isn’t an option as yet. The Abe Cabinet has made it clear their stance is they will never adopt an immigration policy to make up for the labor shortage.
At the lower skill levels, the so called trainee system is a disguised immigration activity bringing in cheap workers from Asia to do factory level work. They can be easily repatriated however, so the system has considerable flexibility, even as it is being attacked for the exploitation of some trainee workers taking place.
The Labor Standards Inspection Office in 2016 found 70.6% of workplaces hiring foreign trainees were violating Japan’s labor laws. The Government make tweek the system to iron out some of the worst aspects, but it will always be a temporary approach. These trainees will have to go home at some point. I doubt they will ever be allowed to settle here permanently. Japan values it social harmony very highly and having to tolerate a bunch of foreigners with different languages, ethics, morals, social values and ideas isn’t attractive at all.
What about at the higher end of the skill set scale? This is the issue facing companies. How to keep employed those who would normally be retiring. The current system is that your salary drops to half once you get to 60 and still keep working. That is a simple fixed costs adjustment strategy on the part of companies that will work for the moment. That thinking may change though once the bite of not enough skilled staff is felt more powerfully.
Japan is planning to get around the immigration option with technology. Big Data, Artificial Intelligence, Robotics, on-line services, automation are the preferred way forward. We see it starting now with places like the retail banks. Tokyo Mitsubishi UFJ Bank has seen the number of visitors to its branches drop by 40% over the last ten years and so 6000 positions or 15% of the workforce are being eliminated over the next 5 years. In my own case, I probably get to a bank branch once every two years at the absolute maximum. Overall the number of retail customers using the bank’s services via mobile devices or PCs has increased more than 40% over the last five years. We have moved our service consumption on-line.
Those older workers with skill sets the companies want to keep are being required to move into new fields. Bankers, for example, who were used to commanding teams and being the big boss of their sections are being asked to go on to commission sales arrangements, where they are paid according to their productivity. They are still young at 60 and can work for another 10-15 years if they can make the leap across to a different role.
This is the issue for the leaders in companies. How to migrate these older workers internally, retaining their networks and experience, but having them become more productive in terms of personal output. They need them to vacate their current leadership roles to make way for the younger generation coming through, but they don’t want to lose them at the same time.
They will need training in modern sales for these new commercial roles they are being asked to play. They will need support also to make the adjustment to go from being the boss – a big shot – to just being one of the troops. That, in a formal hierarchical society like Japan will be a hard transition. This means they need some work on shifting their mindsets as well. That type of training is the most difficult given their age and stage but it can be done. I know that is possible because we have been doing it for our clients. Those tasked with leading this group will also have to display really excellent people skills. The leader will need some retraining on how to lead their sempai or seniors, a very uncommon requirement in Japan, where age is so closely tied to power and authority.
The new constellations in the workforce will be challenging everyone. It will become a zero sum game of those who get it and those who don’t. Recruit and retain are the bywords of current and future business success in Japan. If you haven’t put together your strategy on how to motivate your seniors to want to play a more personally productive role in the company, now would be a really good time to start.
Engaged employees are self-motivated. The self-motivated are inspired. Inspired staff grow your business but are you inspiring them? We teach leaders and organisations how to inspire their people. Want to know how we do that? Contact me at greg.story@dalecarnegie.com
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About The Author
Dr. Greg Story: President, Dale Carnegie Training Japan
In the course of his career Dr. Greg Story has moved from the academic world, to consulting, investments, trade representation, international diplomacy, retail banking and people development. Growing up in Brisbane, Australia he never imagined he would have a Ph.D. in Japanese decision-making and become a 30 year veteran of Japan.
A committed lifelong learner, through his published articles in the American, British and European Chamber journals, his videos and podcasts “THE Leadership Japan Series”, "THE Sales Japan series", THE Presentations Japan Series", he is a thought leader in the four critical areas for business people: leadership, communication, sales and presentations. Dr. Story is a popular keynote speaker, executive coach and trainer.
Since 1971, he has been a disciple of traditional Shitoryu Karate and is currently a 6th Dan. Bunbu Ryodo (文武両道-both pen & sword) is his mantra and he applies martial art philosophies and strategies to business.