April 6

By Suzuka Yoshida

THE 1 April is the day when the fiscal year turns to the next. It is also the day when new employees come to companies all over Japan. A total of 677,000 people who graduated from university in 2022, high school, and vocational school became real-world members.

These new employees have been looking for jobs for about a year. It seems that they are celebrating with an uplifting feeling that they were finally able to join the company of their choice and that a new life would begin.

New employees have spent about a year doing job hunting before the entrance ceremony on 1 April. During student lives, they learned while thinking about “what kind of profession I want to get” and “what kind of company is good for me”, and started job hunting about a year before graduation. Students write their curriculum vitae and motivations for the companies they want to join and take document screenings and interviews many times. Some universities teach you how to write documents, but basically, students themselves should do the procedure. They must have at least three interviews: an interviewer in the personnel department, a senior interviewer in the personnel department, and an interview with executive officers after passing a document review and a written exam. This process is done with multiple companies at the same time. Through the examination, students looked at “what characteristics this company has and whether it suits them”, and finally narrowed it down to one company.

However, since interviews were held online for COVID-19 last two years, it is allegedly that students are worried about whether they have fully understood that company and it could be the right choice to join the company.

On the other hand, companies also seem to be a little worried whether the selection of human resources was correct because they hired them without actually meeting students. Companies spend about two years getting good talent, calculating the profit of the previous year, making a future sales forecast, making a medium- to long-term plan, setting the necessary human resources and number of people, and recruiting. The human resources required by a company change little by little depending on companies and the times. However, still there is a strong tendency to seek human resources who have the flexibility and absorption to grow within the company. Many companies place importance on the basic academic abilities required, such as the ability to read documents, collect information, communicate, and read and draw graphs. At the factory, more science knowledge and skills should be added and needed.

There is a big difference in the satisfaction of companies and students between large companies with more than 5,000 employees and small companies with less than 300 employees. As the graph shows, there are more students-applicants than the demand of large companies with more than 5,000 jobs. The ratio of job offers to applicants is only 0.41; large companies can choose as many as they like. On the other hand, for companies with less than 300 employees, the ratio is 5.28 jobs per student. This figure shows that small-sized companies are not popular with students, so it does not meet the demand every year. Small-sized businesses that are unable to meet their demand are therefore often hired mid-career all year round (hiring people who have stopped other companies, regardless of the season).

Why is there a gap between supply and demand for new graduates?

The reason is small companies have a lot of work and tend not to raise their salaries. Small Japanese companies are often subcontracted by large companies, and large companies order jobs to subcontractors at low prices in order to secure their profits. It is pushing subcontractors to the bill that they cannot make enough sales. Subcontractors cut labour costs to cut costs. There is a minimum wage system in Japan, but some companies are trying to pay just below the limit. For 30 years after the burst of the bubble economy in 1991, large companies have not digitized and created new businesses, and furthermore, they have been bringing a hierarchy into their business relationships to secure annual profits. The amount of consumption is declining. Thus, a chronic low-profit structure has taken root in Japan.

Japan’s GDP per capita was overtaken by South Korea in 2015, and Japan can be no longer a developed country. Japan as a whole is suffering from the recession. And for the past two years, the affection of COVID-19 has been added to small companies so that they cannot cut costs any further.

It can be said that the time when companies with 300 or fewer employees have the same ratio of job-offers-to-applicants as a large company is just the time when Japan’s economic power has improved in earnest. When will it come?