The trend of demand for temporary staff is different from that during the Lehman shock
The initial expectation was that the market would follow a similar pattern to what we experienced around the time of the Lehman shock when many FTE requirements were canceled and replaced with requests for temporary staff. The reality was quite different. Temp and contract Job order numbers fell to 65% and 41% of levels in April and May in comparison to 2019. Companies also examined outgoing expenditure and took the approach to reduce the wage bill as quickly as possible resulting in temporary staff being cut, due to the unpredictability of the market. Contracts were not necessarily being canceled mid-contract but were not being extended. For any extensions, there has been a more stringent approach to gaining approval which in many cases required global approval rather than simply a local one. However, this phenomenon was limited mainly to resources performing administrative functions.
A new era has arrived where flexible working styles are required regardless of COVID-19
No one can dismiss the damaging effects the pandemic has had and the uncertainties it has brought with regards to the outlook on the global economy. Coming into December, there appear to be a handful of companies who have developed a vaccine with distribution expected shortly. With this positive news, we are expecting a cautiously optimistic attitude and appetite towards temporary staffing entering the new year especially for critical projects which need to be rolled out. Japan was arguably one of the more successful countries when it came to controlling the spread of COVID-19 and considering years of extremely rigid work practices at most companies, we overall saw companies action the need to work remotely in an effective and time-efficient manner.
The option to work remotely was offered to most of our contract staff, demonstrating how companies had overcome challenges, in a very short space of time, related to building infrastructure to support remote work, IT & information security, and remote work policy creation. Japan still has a tremendous amount of work to do when it comes to digital transformation and ridding itself of antiquated processes such as using traditional style stamps for authorization purposes.
We are in a new norm now which, regardless of a pandemic or not, demands flexible working arrangements. From a professional contractor and staffing perspective, we already see job seekers far more inclined to take on an assignment at companies that are proactively transforming their working style and making the necessary investment in technology to enable both FTEs and temporary staff to enjoy a productive working experience.
Increasing demand for high-level temporary staff for organizational change projects
COVID-19 pandemic has accelerated the need for companies to address matters such as efficient work practices, resource management, cost management, firm-wide technology, and training. Whether it is for fixed-term projects or mid to long-term strategic temp assignments there has been a growing demand for professional contractors with global exposure, high-level projects, proficiency in both English and Japanese, and possess a strategic mindset.
Japan is experiencing upgrades to telecommunication networks/5G technology, upgrades to secure remote infrastructure, market demand for better e-commerce platforms, and business-critical needs for cost reduction. This in turn has resulted in high demand for Project Managers, IT security specialists, business analysts, BCP (Business Continuity Planning) specialists, and Procurement specialists. Adapting to the new norm in 2021 we are already seeing a demand for high-level specialists to contribute to projects looking to address the need for organizational transformation. This could take the form of people with a background in HR management who can contribute to business needs to transform the culture, L&D, or companywide structure of a company. IT could also take the form of governance specialists to ensure corporate transparency, communication, and maintenance of company policies.
Close collaboration with recruitment professionals is an important investment for successful recruitment
A quick decision is required to hire high skill contractors
Companies which are successful when recruiting contractors, work closely with recruitment professionals such as recruitment consultants. Such professionals play a key role in presenting potential talents with a clear picture of the environment and culture a client has to offer. Therefore, working with them to make sure they understand both the role and the culture of the company is a worthwhile investment that pays off by significantly reducing the chance of a mismatch.
It is important also to appreciate that the window to hire top-level performers in the contract market closes quickly. Therefore, a nimble approach is essential when it comes to recruiting good contractors. Good contractors will usually only be on the market towards the end of a project and in the space of a couple of weeks to confirm their next project assignment. Recruiting contractors requires the client to act speedily when it comes to deciding on whether to onboard staff. On the other hand, companies that require multiple talents to be screened and require a further week until deciding typically lose the potential applicants. Finally, we cannot ignore the fact that having a competitive budget for a contractor will increase the chance, not only of onboarding a staff but onboarding a top-level talent who in the long term will save time and money.
Survey of professional contract employees
Contract Professionals Division