Why More Foreigners in Japan Should Work for Japanese Companies

Six reasons why you should consider working for one

If you live in Japan or want to live in Japan, should you work at a Japanese company?

It’s thought that Japanese companies suffer from various problems. Low productivity, long hours, low-tech (fax machines continue to be a meme), and low pay are just some of the issues that are said to plague Japanese companies.

And so, for many foreigners living in Japan, the argument goes that one might be better off working in a foreign company.

But is the stereotype true? What are the benefits of working for a Japanese company? Is there any merit to choosing to work for a Japanese company versus a foreign company?

Credentials are less important than on-the-job training and a can-do attitude

Companies in the West increasingly require lengthy resumes detailing an extensive list of completed internships and an educational degree somewhat related to what the job you’re applying for.

In contrast to that, Japanese companies are (usually) much more lenient about this — especially if you are a fresh graduate.

You’re not expected to have all the skills you need to do your job — that’s why the company will invest resources, time, and money to train you.

In the Japanese categorization, there are two groups of fresh graduates — liberal arts and humanities graduates who are referred to as bunkei (文系), and science and engineering graduates who are referred to as rikei (理系).

Most Japanese companies have a very ritualized manner of recruitment. The recruitment process — the so-called shukatsu begins in the 3rd year of university.

Companies usually hire fresh graduates and welcome them into their fold every year in a corporate ritual known as the nyūshashiki — the company induction ceremony.

Bunkei people are assigned to business jobs — marketing, strategy, public relations, and rikei people are often sent to R&D, manufacturing, and other technical departments.

Unless you seriously mess up, it’s unlikely for you to be fired

Much ink has been spilled on the legacy of the lifetime employment system in Japan. People take forever to be promoted and compared to foreign companies. Is this good or bad?

It depends on your point of view.

As an employee living through the COVID-19 pandemic — which economically devasted much of the world, I was certainly glad to be in a Japanese company.

I saw report after report announcing yet another layoff somewhere in the world. Many of the companies that announced layoffs in 2022 were tech companies.

Many tech startups were part of the list. It would appear that burning through VC money isn’t a sustainable strategy in a recession and in a high-interest rate environment — shocking — who knew?

This doesn’t mean Japanese companies don’t lay people off — they do. Throughout the pandemic, Japanese companies asked employees to voluntarily leave the company — in return for a fat retrenchment payout.

But this is often the last resort for Japanese companies. Labor laws in Japan also privilege the worker, making it harder for companies to fire staff. A corporate culture that still idealizes lifelong employment in theory — if not in practice — is a boon for workers in difficult economic times.

The pay isn’t good, but the benefits are usually great — which means you can save on taxes

It’s well-known that Japanese companies don’t tend to pay very well compared to foreign companies (gaishikei).

And they have to do that to attract people, because gaishikei tend to attract driven and competitive people who want to move on again after two to three years, to advance their careers and their salaries.

I know this because I have gotten recruiters calling me for the same job at the same company over the past couple of years.

In contrast, working at a stable Japanese company status confers social trust. Working at a listed Japanese company is a criterion that Japanese banks are said to use to decide if one is credit-worthy — for getting housing loans or credit cards.

This means that an average salaryman who has worked a decade at a listed Japanese company will find it easier to get a mortgage compared to a startup employee who has changed jobs 4 times in the last 5 years even if the startup worker is making more than our salaryman.

I’m not a financial advisor. This could all be hogwash, or it could be true. Do your own due diligence.

Japanese companies are also famous for providing lots of benefits, like subsidized housing or company-sponsored dormitories. This means that you effectively save on taxes since you aren’t being pushed to the next level tax bracket.

It’s not always a bad thing to make less… if you can get remunerated through benefits.

Also, it’s important to note that most gaishikei companies also simply take orders from their foreign HQ, leaving limited growth opportunities beyond local operations and sales.

In contrast, Japanese companies tend to have most of their functions, including marketing and production (for manufacturers) in Japan, providing a wider breadth of roles for people who want to try their hand at all kinds of roles.

The job scopes are ill-defined… which means you learn a lot

Commentators often note that Japanese companies do not have clear job descriptions and the scope of work can be rather vague.

I have to admit that when I first moved to Japan, this frustrated me to no end. Why does a marketer need to know accounting stuff?

I had to learn about basic accounting rules, copyright, P&L statements, supply chain, production schedules, digital marketing, and all kinds of fields of knowledge.

That was until I realized that I was learning a lot about how the entire company functioned. Even as a lowly worker, I had a general view of how functions related to each other.

You can be rotated to another department if you get bored

Got bored with your work? You can request to be transferred to another department if you have applicable skills and if your boss is willing to release you.

In the lifelong employment system, an employee typically rotates through multiple functions, positions, and locations, finally becoming a thorough insider in the company.

While this sort of approach seems a bit quaint in the age of hyper-specialization and differentiation of labor, it benefits the people who are genuinely curious and want to learn new things.

It’s unimaginable that a company would continue to pay you while you transferred from product management to investor relations — but in a Japanese company, this is possible, and happens more frequently than you think.

You get paid to practice Japanese — speaking, listening, writing, reading — and yes, even keigo!

Finally, a lot of people seem to have the impression that foreigners working in a Japanese company must speak and write perfect Japanese, this could not be further from the truth.

In my experience, most Japanese companies are aware that they lack competency in business English skills. They also understand and don’t expect foreigners to speak perfect Japanese with impeccable keigo.

Speaking of keigo, even native Japanese struggle with it, since it is highly ritualized and normative. New graduates often attend keigo lessons — essential to function in the corporate environment in Japan.

Personally, I am very lucky that I have worked at two Japanese companies. They essentially paid me to study Japanese and forced me to practice it — speaking, listening, writing, and reading it.

If you ever become obsessed with mastering the Japanese language — as I did — and if you decide to make a career out of Japanese culture, work for a Japanese company.

A minor caveat: Some of the points I’ve mentioned only apply if you’re hired as a “full employee” or seishain. If you’re hired on a temporary contract or keiyakushain — like some Japanese workers are as well — your contracts might not be extended if you’re no longer needed.

Companies typically do not invest in contract employees in the same way as regular employees, and career progression can be limited.

Still, you don’t need to spend your entire career working at a Japanese company. The cultural lessons you take away are so much deeper than anything you can ever learn from a classroom.

This article was written in response to Japanese Culture & Photography’s 10 Things to Consider Before Working at a Japanese Company.

© Alvin T. 2022

For more cultural insights about Japan, please see other stories by the same author:

The author is an editor of Japonica, a Japan-focused publication, but also writes on a wide variety of topics. His key topics of interest are society, culture, modern work, creator economy, and cryptocurrency, with the occasional fictional story, creative piece, or personal essay. Discover his most-read stories here.