Japanese Companies Open Their Doors

When Toshiba held a welcome ceremony for 35 recruits recently, the incoming employees listened to speeches and sang the company song.

The event mirrored ceremonies held at other Japanese companies, but with one crucial difference — the recruits were foreigners who spoke little Japanese.

Businesspeople seated side by side
John Cumming | Digital Vision | Getty Images
Businesspeople seated side by side

Toshiba is among a growing group of Japanese companies that are opening their doors to foreign employees to globalize their operations.

Japanese groups, with their closed corporate culture, rigid labor practices, and reliance on Japanese-speaking staff, have traditionally been wary of hiring foreigners, except at overseas subsidiaries.

That is changing, however, as a stagnant home market forces them to look overseas to boost revenues.

“We are promoting diversity within Toshiba, because there is a sense of crisis that unless we employ a diverse range of people, including women, we will not be able to grow,” says Seiichiro Suzuki, the head of the group’s recruiting center.

Toshiba employs tens of thousands of non-Japanese workers at its 315 local subsidiaries worldwide. It set up a global recruiting program in 2006 aimed at hiring engineers from south-east Asia to work for the Japanese parent company. Only 250 of the 35,000 employees working for the parent group are not Japanese. In the next few years, it aims to hire about 100 foreigners a year.

Many Japanese retailers are hurrying to build a non-Japanese employee base as they seek to expand overseas. Lawson, a convenience store operator, plans to hire 20 foreigners next year as candidates for management positions as it expands in Asian markets.

Don Quixote, a discount store group, is hiring 50 Chinese graduates, or just more than a third of the 130 recruits it will take in next spring. Rakuten, which operates Japan’s largest online shopping mall, has gone a step further by enforcing English as the official language for management meetings and press conferences.

Both Lawson and Don Quixote are mainly hiring Asian nationals who are studying in Japan, have a good command of Japanese and are familiar with the culture.

However, the aim of these companies is not just to nurture managers who can help build their operations overseas. They also want to create a culture of diversity to stimulate new ideas and a fresh perspective on how they do business.

“Having different people from different backgrounds makes you aware of such different perspectives,” says Lawson.

The importance of employing staff who can think outside the box was brought home to Lawson management when, a few years ago, foreign customers asked why they provided chopsticks to eat miso soup, rather than a spoon.

Japanese use chopsticks to eat any solid ingredients and drink the soup directly from the container. Until then, it had not occurred to Lawson managers that foreigners might find it more natural to eat miso soup with a spoon.

Japanese companies are also finding that the self-confidence and aggressiveness of foreign recruits can have a stimulating effect on Japanese staff.

One foreign recruit at Don Quixote was unhappy about the cleanliness of the lavatory at a store and went and cleaned it himself, while another chastised the clerks at the check-out counter when he noticed that they were not smiling.

Kaori Ejima, manager of Don Quixote’s China recruitment project, says it is difficult for Japanese staff, especially recent recruits, to take this kind of initiative because of the hierarchical culture of domestic companies. Japanese recruits would hesitate to do the same for fear of embarrassing the shop manager.

Both Lawson and Don Quixote have also found, to their surprise, that foreign graduates often have a better grasp of the Japanese language than Japanese recruits. The foreign hires tend to have graduated from the top universities in their countries, while Japanese recruits are less likely to have graduated from better Japanese universities.

While more Japanese companies aim to increase their recruitment of foreigners, the hurdles remain high for companies and candidates alike.

Even though Toshiba does not require foreign management-track employees to speak Japanese, it has been unable to meet its goal of hiring 100 foreign engineers a year, largely because of a lack of qualified candidates.

Another difficulty is finding foreigners who are willing to work for many years in Japan on the same terms as Japanese staff, says Mr Suzuki. Many foreigners would prefer to return to their home country after a few years.

Most Japanese companies are still hesitant about hiring foreigners, which means only a fraction of the thousands of foreign students in Japan find full-time employment there.

Meanwhile, Fast Retailing, which is rapidly expanding its Uniqlo shops overseas, expects foreigners to exceed Japanese staff within 10 years.