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Jun 04, 2013

Kumiko Ishiyama, Japan Intercultural Consulting's HR consultant in the UK, explains why she switched to HR as a career, having started in product planning, and why Japanese companies need to see HR as as being at the "frontline" of their business.

1. Is human resources really a back office function?

I majored in economics in university. For four years I studied all aspects of economics, such as microeconomics, macroeconomics, international economics, finance and marketing, and among these I also studied labor economics. Labor economics explains how the traditional lifetime employment system works in Japanese companies. It is a system whereby when employees are young, they receive compensation that is lower than the value of their labor productivity, and they can receive compensation that is higher than the value of their labor productivity when they are in their 40s and 50s and their children are in university and expenses are high. It works like a savings bank.

I remember feeling strangely moved by this explanation. However, I was not particularly interested in human resources as a career. That was because I was aware that human resources was called “back office” or “support department,” and it was not the “front” of the business. This was something even I knew when I was a university student. Instead, I hoped to go into corporate planning, overseas sales or marketing.

I also wanted to work overseas. I could see that there was a greater possibility of being sent to work overseas if I entered a Japanese corporation than if I went to work for a foreign corporation that mostly needed Japanese to work in Japan, so I entered one of the electronics manufacturers that still had a favorable 'made in Japan' brand recognition. Another reason for choosing the electronics manufacturer was that I wanted to experience being on the inside of a distinctive Japanese corporation that was competitive globally, one that I had studied in university.

2. My own career was not visible to me

Through my work in sales and product planning at the electronics manufacturer, I gradually came to realize the importance of human resources. The situation would probably have been different if I had specialized skills such as engineering, accounting or law, but I saw that it would be very difficult for me to control my own career in a large Japanese company.

It was not as though I absolutely had no control over it. When I joined the company, I was able to submit requests for the types of jobs I wanted to do, and there was also open recruitment inside the company and I actually moved once by it. However, I wanted to go overseas while I was in my 20s, so after four years had passed after I joined the company, I began to feel frustrated.

I had submitted a request for an overseas transfer, but I had no idea when the company would send me, under what conditions, if I lacked some necessary personal quality, or in what direction the company would send my career. Also, when the people at the company gave me advice, such as "There is something to learn from any kind of work," and "There is no need to be in a hurry," I had an awkward feeling. To the question, what if I waited until I was in my 50s and as a result never was able to go overseas, would the company take responsibility for my not realizing my dream? Naturally the answer was NO.

After thinking a long time about this, I applied and was accepted into graduate school in London. At that time I still had not given up on my plan of going back to the company after returning to Japan and making use of what I had learned overseas. Maybe it was because I was influenced by the new employee training, but I was fiercely loyal to the company. Both my own house and the house where I grew up, under my influence, were already full of this company's electrical appliances. I applied for an interview at the corporate human resources department and probed around for my future career possibilities, but still my career path within the company was unclear, so I resigned and went to the UK to enter graduate school.

3. Why don't new hires settle in?

When I was in university and looking for a job after graduation, more than 10 years ago, Japanese corporations were lamenting that new hires were not settling in to their companies. I heard this even in company presentations. It could be said that as a result of the bankruptcies of the large corporations in the recession that followed the collapse of the bubble economy, and the large numbers of employees that were let go, the mutual expectations between the company and the employee known as lifetime employment, in other words the psychological contract, was broken.

Considering the above-mentioned relationship between labor productivity and compensation, the number of people has increased who want compensation for their current labor productivity now, and are of the mind that they must do work that gives them skills that are transferable to other companies since they need to look after themselves. And even though they joined a company, they feel frustrated that the previous human resources systems are still in place. This is likely the reason that they resign or change careers after a few years. In fact, I became one of these people.

In the UK as well - and this extends from the economic stagnation of the 1960s and 70s, which is called “the British Disease,” to today - many people change jobs after a short period of time. This is unlike a few decades before, when many people worked at one company for a long time.

This may mean Japan will also head in the direction of a human resources system like that in the UK. However, this does not necessarily mean that a UK-style human resource system would be good for Japanese corporations. The scale of new graduate hiring is not as great in the UK as in Japan, and Japanese companies do not hire as many experienced workers. As a result, there is a high unemployment rate among the young in the UK. Furthermore, because of the Anti-age discrimination legislation mass hiring, seniority systems and mandatory retirement age are not possible. An overall system must be designed that complements multiple human resource practices and can cover complex circumstances, since it is dealing with national cultures.

4. There is an academic discipline called Human Resources!

When I mention that I studied international human resources in graduate school, I get puzzled questions from Japanese who ask, “Really, is human resources taught in school?” (I have got this question from British people as well.)

Of course, we don't necessarily learn payroll accounting. There is a word ‘Rohmu’ in Japanese which often use as well as human resources but when one hears the word ‘Rohmu’, laws and compliance come to mind.

"Human resources" has a more positive connotation, above and beyond obeying the law. What kind of human resource system does a business need in order to find, hire, keep and motivate to their maximum capability human resources that will increase the bottom line? In order to design such a system, the disciplines of psychology, behavioral science and leadership are also part of the course of study, since it is critical to know what systems bring about what kind of behaviors in employees and what kind of actions and words from leaders bring out what kinds of motivations and actions in their subordinates.

In the UK, many large corporations have human resource experts on their executive teams. It goes without saying that employees are vital to the success of a business. By demonstrating quantitatively the impact of human resources on their businesses, in other words, showing how a given human resource system affects the bottom line, I think Japanese corporations also need to position human resources departments in the “front” of their business. 

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