“Era of Strategic HR” First installment: How to develop a recruitment strategy for mid-career workers in an era of selective recruitment
End of the seller’s market era and start of the selective recruitment era caused by the Covid-19 crisis
Because of the Covid-19 pandemic, the mid-career recruitment market has become a seller’s market as opposed to a buyer’s market. Since around March 2020, when the number of Covid-19 cases began to increase in Japan, 40% of foreign capital companies and 15% of Japanese companies (*1) implemented hiring freezes, and the number of job openings from foreign capital companies in the second quarter (April–June) fell 15% compared to 2019. The companies that had quickly adapted to remote work-from-home arrangements and online recruitment resumed recruitment activities last summer and fall. However, except for some successful IT and Internet-related industries, the number of job openings decreased in latter half of 2020 compared to the previous year.
The reason for the decrease in the number of job openings for mid-career workers was that many companies cut recruitment budgets due to uncertainty over the economy and their businesses. Because companies had no leeway in recruiting human resources, they only recruited those who could play an important role in the growth and survival of their companies, such as highly skilled human resources needed to solve their challenges and experienced human resources needed to develop business strategies in the new normal era. As companies became more eager to hire more highly qualified human resources for the limited number of positions available, they imposed more rigorous requirements on job seekers. This is reflected in the 24% increase in the number of workers with a yearly income of 20 million yen or more who changed jobs compared to the previous year despite the decrease in the total number of workers who changed jobs.
Companies will continue selective recruitment until we can foresee an convergence of the Covid-19 pandemic. In fact, companies that introduced work-from-home policies face a new challenge: onboarding (first day of work retention) in a remote environment. Companies cannot easily overcome these challenges and tell which newly recruited human resources will perform well. Thus, recruitment strategies are becoming more important in order to hire workers with as few mismatches as possible.
How to develop a mid-career worker recruitment strategy
Recruitment strategies allow companies to hire the human resources they need to grow. Because organizations are made up of people, recruitment strategies are considered an important challenge in their business plans. The most important aspect of developing a recruitment strategy is to analyze the company and objectively grasp the situation. For example, companies need to know their stage of growth and the progress of development of their internal personnel system and infrastructure. They can then compare them to their ideal sales and business goals and identify any gaps. Companies also need to identify the resources they lack and determine how many human resources they need with the appropriate abilities, skills, and expertise to solve their challenges. Only then can they estimate the cost and effective ways of recruiting workers with the right attributes. This is the general idea of recruitment strategy development.
Japan and the US and Europe have completely different cultures and ideas about employment. Japan’s personnel and recruitment system is based on the premise of lifetime employment. Companies have developed human resources that provide long-term support by hiring new graduates all at once and then rotating them between different departments. Existing employees are assigned to handle new tasks and solve the challenges that have emerged in the course of corporate growth. That is why employees are suddenly transferred or sent abroad, which is unique to Japanese companies. This is membership-based employment.
On the other hand, American and European companies recruit workers on the assumption that employees will eventually leave. Companies recruit human resources with the skills and abilities necessary to solve their challenges from the outside. The purpose of recruitment is not to develop human resources for the long term but to solve problems and overcome challenges. The skills and abilities they expect from the human resources they recruit are clearly defined, and the rewards provided for their achievements and the promotion system are systemized. Thus, after hiring human resources, companies cannot arbitrarily change their work assignments without their permission. As it is customary that workers are highly evaluated and hired for their experience as specialists, if companies change their duties after hiring them, it can lead to a step back on the career ladder or a decline in their market value. Thus, in many cases, workers do not want to stay with a company if they have to change assignments; consequently, it is common for them to leave a company if their services are no longer needed or if they become redundant. This may be one of the reasons that foreign capital companies seem to have no attachment to employees. However, the system is highly rational where workers improve their skills in an environment where they can provide value and keep working as long as their goals and the company’s goals are aligned, and when they no longer share a mutual interest, workers and the company choose what’s best for each. This is the job-oriented employment system, an American/European-style employment system adopted by foreign capital companies.
Since last year, major Japanese companies have introduced or are considering the introduction of the job-oriented employment system. However, we should not forget that job-oriented employment and membership-based employment systems are based on the cultural backgrounds of the US and Europe and Japan, respectively, and corporate growth strategies. In addition, the most important component of company growth is to develop an appropriate individualized recruitment strategy. We expect that, if the specialist recruitment of job-oriented employment becomes popular among Japanese companies, it would not be the same as the job-oriented system in the US and Europe.
Develop an appropriate individualized recruitment strategy for your company
Though it may not be true in every case, there are different approaches to recruitment depending on the stage of company growth. In many cases, start-up companies or venture companies should adopt the membership-based employment system, regardless of whether they are foreign capital companies or Japanese companies. At the foundation and the early stage of growth, companies often cannot predict what will happen and are likely to change the direction of their business to increase sales. Thus, workers who identify with the corporate philosophy, not the nature of the work, and are willing to do whatever is necessary to expand the business can help promote the business of the company. In this case, vitality and passion for the company and its products and services are more important than specific experience, knowledge, and skills as criteria for recruitment. Therefore, the purpose of recruitment is not to find human resources appropriate for the jobs but to hire workers for the company. Needless to say, the approach to acquiring human resources in the market should be promoted in a way that suits that purpose. It is crucial for companies to share the challenges related to company growth with applicants, adjust growth milestones, and let employees know that the purpose of recruitment is to promote business and growth in the selection phase. Unless applicants understand that the purpose of recruitment is to promote company growth and are determined to change their roles as the company growth, it is very likely that there will be mismatches in recruitment.
On the other hand, specialist job-oriented employment is the most effective for major companies in the later stages of growth and in the stability stage. These are the stages when company challenges and needs are identified, and the roles and results expected from each job type and position are specified. In this case, companies should clarify the results they expect from applicants for employment and their career plans for the next several years. Companies not only check applicants’ personalities but also compare their expectations with what applicants can offer and adjust their expectations in interviews. Companies must consistently provide workers with an environment where they can be inspired and grow as specialists and develop a reward system for achieving results in return for demanding expertise from them. This is one of the ways to encourage human resources hired through the job-oriented employment process, and it will affect retention later.
Please assess the situation of your company and its goals and choose the best recruitment strategy to achieve the goals without being swayed by the company’s size, form of capital, and employment patterns.
*1 Survey on the situation of mid-career recruitment in the Covid-19 crisis (Surveyed by en world Japan in April 2020)
Author: Takeshi Kitsunezaki, Vice president
After working in overseas sales and other positions, started his recruiting career in a British recruiting firm in 2006. He managed a team specialized in recruitment and career changes for internal IT positions in the financial, pharmaceutical and healthcare, retail/manufacturing/logistics industry, and Internet industry. He joined en world Japan as director of the sales division and specialized in IT companies/human resources in 2018. Assumed the position of executive director of all sales divisions that support foreign capital companies and global Japanese companies in recruiting regular employees in 2019
Posted on IT Media Business Online on Febrary 19, 2021 Click here for the article in Japanese
About en world Japan (https://www.enworld.com/)
en world Japan is a recruiting firm established in 1999 specializing in global human resources with offices in four countries in the Asia-Pacific region. We specialize in supporting Foreign Capital Companies and global Japanese companies in recruiting human resources for middle to high level positions. We help companies with recruitment and job seekers with career changes from every angle by staffing full-time workers, contract professionals, and executive human resources and providing recruitment process outsourcing solutions.