LANGUAGE | WORKING IN JAPAN

Why Japanese Companies Prioritize Language When Hiring Foreigners

For Japanese companies, cultural fluency trumps work experience

“So why aren’t Japanese companies more flexible about hiring technically competent and adaptable foreigners, even if they don’t speak the language?”

This question appeared on my LinkedIn feed in reaction to a post about the worsening labor situation in Japan as young Japanese people are emigrating abroad to seek better-paying jobs, driven in part by the massively depreciating Japanese yen. They’re certainly acting like rational economic actors.

That’s, of course, happening in the context of the continued decline in the Japanese population, and by extension — the labor force. The Japanese population dropped by 0.8 million people last year, to 122.42 million. That’s been happening for a while and is certainly not news.

Given this, it would also make rational sense for Japanese companies¹ to be more flexible about hiring foreign staff than to insist on Japanese language skills.

The reality is far more complex.

75% of job listings require Japanese fluency

In 2022, Nikkei Asia looked at recruitment information listed by two job listing websites that targeted foreigners. They discovered that 75% out of 18,000 offers asked for Japanese proficiency equivalent to the N1 Level on the Japanese Language Proficiency Test (JLPT) — the highest achievable level. In contrast, only 37% of the 9000 registered job seekers had that level — indicating a mismatch of gigantic proportion.

The report also goes on to state that managers are reluctant to hire foreigners due to “concerns about language and communications problems.”

I asked my friend Zhou Ruyi for her take on the situation. Ruyi is a recruitment professional and entrepreneur in the field of technology. I had previously interviewed her in my article “Japanese Companies Lack Two Success Factors to Win in the Global Age.”

“Simple. Most of their employees and clients cannot speak English and are not able to communicate without Japanese. Besides, speaking a language also shows understanding of the culture, and this is required in the Japanese workforce.”

Some people take this to mean that passing the JLPT is mandatory.

It isn’t.

The JLPT is not a true measure of one’s Japanese linguistic ability any more than your college degree is any indication of your ability to get the job done. It’s more like a filter that hiring officers like to throw in to filter out those without Japanese language proficiency.

In my own experience with Japanese companies, never once was I asked about my JLPT status. Most interviews were simply conducted in Japanese, which is more than enough for the interviewer to access your Japanese ability (albeit, only your speaking and listening skills). The test is just a formality. Still, it is best to have the certificate and not have to use it.

Language fluency as a proxy for cultural fluency

The Japanese language is highly structured. Ironically enough, it is also a language in which the unspoken is perhaps as important — or even more important than what is spoken out loud.

Japanese is more about sociolinguistics than it is about syntax. Ruyi confirms my view. She tells me that the “Japanese non-verbal cultural barrier is much higher than the language barrier.”

As a country and a culture, Japan is largely driven by rules, routines, and rituals. Much of that tendency is also embedded in the language in the form of ritualistic phrases, a preference for indirect expressions, and complex honorific rules.

Someone who has learned the Japanese language is also more likely to understand all of that cultural complexity — skills required to navigate the professional landscape in Japan.

Japanese managers are not asking for much when they require Japanese proficiency. A translation bot can tell you that 難しい (muzukashii, difficult) means difficult. But you would need to be somewhat proficient in Japanese to know that when someone tells you that a task is muzukashii, it really means impossible.

Traditional Japanese companies do not hire for skills

Traditional Japanese corporations created the “lifelong employment²” system — a key pillar of the postwar Japanese economic miracle. There are several features of this sort of organization:

1. Most companies that follow this model are in the legacy industries. Some examples are manufacturing, logistics, trading companies, banks, and so on.
2. Employees would join a company, typically as fresh graduates, and pledge their lifelong loyalty to that company.
3. The employee is generally rotated through various departments, becoming a “jack-of-all-trades,” but a “company specialist.” From sales to engineering to corporate planning, maybe even accounting, and then to product development.
4. The company becomes a sort of lifelong club — it becomes a surrogate family. Companies even provide company housing and other welfare benefits.
5. These companies are typically very embedded in the overall Japanese cultural environment. This means more “typically Japanese rituals” (seniority, consensus decision-making, etc.)

In this model, skills are an afterthought. You’re not expected to have them in the first place. You’re hired for what you can provide in the future rather than what you can bring to the table immediately.

The opposite end of the spectrum: the Silicon Valley approach

In contrast to the traditional Japanese company lifetime employment model, at the opposite end of the spectrum, we have the Silicon Valley tech startup model.

According to DC Palter (who is also a Silicon Valley angel investor and startup mentor), this model has several features that make it unique, even by global standards.

• Companies that practice this are typically startups. Primarily in the technology space.
• Technical people are hired based on “hard skills,” not language. Many do not speak English fluently.
• Technical teams work in their own silos and only the managers talk to the business teams.
• There is a high level of immigration to begin with. More than 50% of Silicon Valley startup founders are immigrants. Nor are most of the staff on the technical teams.

The United States has historically been an immigrant country. In 2021, 13.6% of its population was made up of immigrants. In contrast to that, according to government statistics released in 2023, under 3% of the population of Japan is foreign-born. It’s therefore difficult to see this model being replicated in Japan in the short term.

Still, if any skills-driven recruitment model is to be found in Japan, it would make a lot of sense to start looking in the field of software.

Software firms: Where programming languages > the Japanese language

The emergence of software companies and a more general shift towards a more specialized, skills-based digital economy is increasingly making the lifetime employment model irrelevant.

The complexity and specialization at software companies are much higher. It makes little sense to rotate software engineers to marketing then to sales and then to accounting.

Indeed, Japanese tech companies, especially those focused on software, are slowly realizing that it’s impossible to recruit sufficient tech experts if they have extremely high language requirements.

After all, tech experts get to where they are mastering computer languages, not focusing on the Japanese language. It is unrealistic to demand technical experts to invest years — as I did — in trying to master the Japanese language.

For that reason, some Japanese tech companies and startups are attempting to switch to an English-first policy to attract the talent they need. But these companies are the exception rather than the rule.

Unfortunately, as I have also written elsewhere, the “English-first” policy has not had the desired success in many big-name legacy firms. Perhaps it will have more success in companies where there are more foreign staff than there are Japanese staff.

Indeed, I confirmed with another friend working in a major Japanese platform tech company that she used mainly English within her team.

“Being in software helps because code is pretty universal. Also, we have translation bots. Engineers speak the same language everywhere regardless of race, language, or religion. They just agree or disagree over the same things in software, and this is unrelated to whether Japanese is used.

“There is still communication, just not as much as sales. Also, I don’t work with the business people. My manager doesn’t speak Japanese, but she’s still mostly engineering.”

But there was a caveat — she used Japanese with other teams, and she pointed out another issue. “It works to a limited degree if you don’t speak Japanese, but there’s a ceiling. The higher ranks absolutely need Japanese.”

Ruyi echoes her view. “Some companies, like Rakuten or Mercari, have roles that only require English. However, generally, it would still be difficult to rise to a managerial position if you don’t speak Japanese to manage the Japanese team.”

Will the shift towards a skills-based labor market change things, even for legacy firms?

The CEO of LinkedIn Japan, Wakana Tanaka, states that the Japanese labor market is slowly shifting towards a skills-based one rather than one driven by the idea of lifetime employment.

When I take the metro, I see ads run by job portals encouraging salarymen (and women) to change their jobs and discover their potential. Slowly disappearing is a key accouterment of traditional corporate Japan — the lapel pin.

A survey by the Ministry of Internal Affairs and Communications in 2023 found that 3.78 million workers aged 46–64 expressed interest in job-switching, an increase of 30% compared to 5 years ago in 2018.

Yet, even as the lifelong employment model is slowly giving way to a skills-based model, the cultural elements change much slower. Case-in-point: The Japanese language has a term to describe a corporate cohort. Everyone joining the company in the same year is referred to as 同期 (douki) — “same-timer.” The word is still very much in daily use.

Large corporations continue to hold company initiation ceremonies during the first week of April. All of these cultural artifacts presuppose lifetime employment.

While it appears that HR policies will soon need to play catch up to changing business realities, it’s probably safe to say that it will still take time for HR departments to receive the memo.

Alvin T. © 2023

Notes:

1. For this article, I am limiting my analysis to so-called “Japanese companies” — nikkei companies, rather than “gaishikei” or foreign capital companies. A number of gaishikei companies often have foreign expatriate executives who do not speak Japanese. In these companies, the reverse is usually the case — Japanese employees are required to be fluent in English.
2. In Japan, job offers are typically split into two large categories — seishain (full-time employees) and keiyakushasin (contract employees). Full-time employees enjoy better status and privileges. They find it easier to apply for credit cards and loans. They do not have to renew their contract every year. In contrast, contract employees are typically hired with a fixed period and will need to negotiate their contract status with their employers. Due to the way labor laws are setup in Japan, it is very difficult for companies to fire full-time employees. Contract staff are let go if their contracts are not renewed. The lifetime employment model only applies to full-time employees, not contract employees.

Want to know more about working in Japan or the intricacies of the Japanese Language? Discover more in my “Working in Japan” and “Japanese Language” series of articles in the link below.

Interested in Japan, Japanese culture, or the Japanese language? Follow me! I write frequently about Japan-related topics on Japonica, where I am also an editor. Discover my most-read stories here.