The Corporate Samurai Are Getting Less Loyal

U.S.-style job mobility is replacing lifetime employment

Fumitako Konno is prime material for the corporate machine that is Japan Inc. Young and ambitious, Konno has the credentials from Keio University that companies from Sony to Mitsui prefer when hiring junior executives. But Konno doesn't think a lifetime job at some Japanese company will give him the thorough grounding in management that he craves. So he's joining Andersen Consulting. And he cheerfully anticipates working for several different firms, both Japanese and foreign, in the decades to come.

Bit by bit, the dynamics of the Japanese job market are changing. Workers are focusing on their careers and skills, not on staying put at one company. Headhunters, after years of rebuffs, are finally getting their calls returned. Companies are even talking about rewarding workers based on their contributions, not just seniority.

LABOR'S BIG BANG. Analysts are already calling these changes the labor version of the Big Bang--the deregulation of Japan's financial services that will probably transform an entire industry. With Japan nearing recession and the possibility of bankruptcies looming even for big companies, employees recognize that it is now important to develop job specialization. Traditionally, big Japanese companies churned out generalists, a practice that nurtured loyalty but left workers with few specialized skills useful at other firms. Now, younger Japanese seek specific experience in such areas as fund management.

Japanese are also finding foreign corporations much more attractive. Oracle Corp. Japan, a unit of the U.S. software firm, hired 125 graduates this year, compared with 40 in 1993, and had its pick from top universities such as Keio, Waseda, and Tokyo. Yasuo Akita, senior director of human resources at Oracle, says a big attraction for new recruits was the company's merit-based pay scale. An entry-level position pays $2,200 a month, compared with the $1,500 national average. "Ten years ago, the top brains would never go to work for foreign companies," says Keiichi Yonezawa, a former human-resource manager at a U.S. technology company in Tokyo.

Recent decrees liberalizing the market for placement agencies also make it more likely older workers will job hop. Private employment agencies should grow from $230 million in revenue currently to $1.5 billion in the next three years, according to the Development Bank of Japan.

Headhunters are finding even senior employees more receptive to the idea of change. When Masaru Eshima launched his executive search firm Tesco Co., most people would hang up on him when he called. These days, says Eshima, 80% of the people he calls agree to meet. Foreign headhunters report the same experience. Sakie Fukushima, a partner at Korn/Ferry International in Tokyo, says that when she first started, some candidates thought she was from an outplacement firm hired by their employers. Now they are "honored" to receive a call, which could mean a new lease on a working life. Says one Japanese executive who followed a Korn/Ferry lead to join a foreign company, "Japanese are finding that if you cling to your employer, your job isn't always interesting, rewarding or even guaranteed."

Headhunters have gotten a big boost from foreign companies that want local execs for their Japanese units. The next step: landing big Japanese accounts. "So far, the Toyotas and Nissans of Japan are not using us," says Takashi Kurisaka, managing partner of recruiting firm Egon Zehnder International Co. But he notes that some Japanese companies are considering recruiting foreign managers as board members.

Of course, many Japanese remain loyal to the companies that hired them out of college. Yet even here, the pressure is building to pay according to individual contributions. Otherwise, younger, valued employees may jump. "Only 10% of senior workers are truly productive," says Masahiro Origuchi, chairman and CEO of Goodwill Corp., a rapidly growing outsourcing firm in Tokyo. "Companies will have to adopt a value-for-money approach" to keep their best workers. For the most motivated Japanese, the coming changes could be beneficial indeed.

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