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  • Writer's pictureAndrew Nimmer

Technology Company Recruiting Trends in Japan and APAC Through the Eyes of an Executive Recruiter

The purpose of this article is to share the recruiting trends and my personal business advice for technology companies in, or considering coming to Japan despite the recent economic slowdown. Japan is the the 3rd largest economy behind China and the United States and there is a lot of upside opportunity and potential growth in the Japan GDP and SaaS market.

It is often during an economic slowdown that a company may want to enter a market giving them a good chance to hire and build for when the economy improves. It usually takes 3x the time to hire as well as to build a solid foundation in the Japan market compared to other markets. Starting a foundation in Japan during the economic slowdown can potentially lead to a significantly higher ROI once the market improves. Hiring top talent starting with a Japan General Manager/ Country Manager that has a strong background and a record of success scaling a team at a startup or a division of a larger company, has presence of a local executive, and has established relationships with C- suite leaders at big companies is ideal. From day one, this person must have a startup mindset as a General Manager/ Country Managers does not have a definitive role other than to do whatever is necessary to succeed.

Scaling a business or a career in Japan is easier said than done. The process of identifying, evaluating, and securing local talent as well as setting up operations in Japan has many moving parts - all of which require careful assessment and experienced guidance. The way to enter and scale a business in the Japan market varies significantly because every company is unique and the Japan market is complex.

Finding functionally capable English speaking talent that excels in Japanese business culture and also fits into Silicon Valley culture is another challenge in Japan. Japan has one of the smallest percentage of English speaking populations in the world combined with a shrinking population making the talent lake relatively small. Every company from both inside and outside of Japan is fishing in that same lake. Japan is also just a single generation removed from a long history of lifetime employment. Another contributing factor to the shortage of top talent is that many of the most talented workers in Japan with a stable job are not actively looking or are unaware of new career advancement opportunities because they do not know the true market value of their skills or experience.

The impact of the economic slowdown is unevenly spread among various position types in Japan. Engineers, Customer Success Managers, and Account Executives, remain in high demand as of this writing. For every technology company that closes a job with a new hire another new position seems to open up. Tech job seekers still have many career opportunities. However, the situation may change quickly as the Japan market emerges from the recent slowdown.

For technology companies in Japan and APAC to thrive in today’s economy, hiring and retaining the best employees is vital. Technology companies should be taking the appropriate steps to not only hire great talent but also retain their best employees - failure to do both will result in someone else hiring them away - and put them back to hiring, training, and trying to retain cycle. A lost talent is a loss of momentum, a blow to a budget and lost opportunity that is difficult to quantify. Reputation in Japanese market is critical, and once the reputation of a company is damaged, word spreads and people remember which can severely hinder their ability to secure top local talent. There are a limited number of candidates available in the Japan market since Japanese Nationals tend to stay at one company longer, especially if they are at a top tier Japanese company. The majority of candidates also need to also convince family members, such as a partner and/or parents - that it's okay to work for a foreign company or a company that is not well branded in Japan regardless of the actual upside of working at the new company.

I have been recruiting for technology companies in Japan and APAC for the past 17 years. I have introduced more than 600 people (including General/ Country Managers, Senior Leadership, and Individual Contributors) into some of the most exciting software companies from all over the world, predominantly from Silicon Valley. I also work closely with and advise senior leaders at several venture capital firms to provide insights about their portfolio companies with regards to general hiring and business issues unique to Japan and APAC. I have also provided market entry support consulting to 30+ technology companies that have successfully entered and scaled in Japan and APAC.

Recently I have been meeting with more and more tech professionals in Japan and APAC that, unfortunately, have lost their jobs or have been asked to reduce their current compensation package due to the current economic slowdown. Some companies are receiving severe pushback from their board members to put the brakes on hiring or re-evaluate spend plans. In some cases, companies are rescinding job offers after they have been signed, creating a difficult situation for candidates who had cancelled interviews or turned down competing offers from other companies which in some cases has resulted in legal consequences for the hiring company.

As a recruiter, I am frequently being asked by tech job seekers “Andrew, - is now a good time to change my job despite the current economic situation?” - this is a very challenging question to answer because every individual is in a different and unique situation. As an example, if someone is financially stable they may be more open to a challenging new opportunity despite the economic situation. However, someone that supports their family from paycheck to paycheck may not be so open to a new challenge even if they want to change their job. For this reason, instead of answering the question I start by asking them “Why do you want to change your job and what is the one thing (or things) you want to improve most?”.

I have observed that despite the economic situation, not all technology companies (including startups) should be categorized into one single bucket. There are many technology companies that are still thriving despite the economic slowdown and contributing to the enhancement of digital transformation/digital adoption in Japan and APAC. For this reason it would be unfair to say to every tech job seeker that this is not the right timing to change jobs, as there are still many career opportunities in Japan.

From a recruiting perspective I have noticed a few things from both the candidate and client perspectives. From the candidate perspective, it seems as though there is a surplus of great candidates in Japan and APAC markets who have reconsidered their life priorities and want to find a better opportunity with a greater work/life balance. This is because many people around them have recently changed their jobs with improved working conditions and they are becoming more curious and aware of their true market value, and more motivated and open to improving their working conditions or overall situation.

From the client perspective, it seems as though many companies are being more careful about hiring, but this hasn’t led to the best interview experience for candidates. Some companies do a great job of having an thorough interview process that is welcoming and lets the interview process be interactive giving the candidates a chance to ask questions, meet their future co-workers, and feel comfortable with the company in every aspect. However, some companies stick to a lengthy interview process that is one-sided leaving the candidate with a lot of unknowns and uncertainty. Although people are slowly going back to the office, there are still many cases where a candidate may not physically meet with someone in the company from the very first virtual Zoom interview to their first day on the job - think about that for a second! I believe a thorough interview process is important but now more than every it needs to be a great interview process and interactive in order to attract the best talent.

Candidates are now more than ever vigilant about a great interview process, a great work/life balance, working for/with great people, a positive workplace culture, a great working environment with a chance to learn, promotion opportunities, a chance to be heard, and a competitive salary (including equity). No longer are benefits like health or wellness allowances considered a perk - candidates are wanting a greater ROI on their time and talent investment in their roles.

To attract top tier talent in Japan and APAC, I believe companies need to get creative on:

- a thorough but great interview process that is welcoming and lets the interview process be interactive - a hybrid working environment (mixture of working at home as well as at the office when necessary) - OTE (On Target Earnings) splits (percentage guaranteed versus performance-related) - the volume of equity options granted

- sign-on bonuses (one-off and non-recoverable) - commission guarantees at 100% and non-recoverable - # of vacation days (an employee that is refreshed usually leads to higher productivity) - promotion of diversity and inclusion - “walking the walk” when it comes to values statued by company leadership (Japanese candidates are becoming more concerned wtih socially responsible companies. )

I believe that talent is a company’s greatest asset - after all the most important asset to a company is not only the product they sell or processes they've implemented, it is their people! Regardless of economic conditions, there are still many great career opportunities for tech job seekers in Japan and APAC. For all companies who want to hire top talent and retain their best employees - it may be a good time to re-evaluate their talent acquisition strategy and see if it is aligned with the needs of the current market.

ScaleInsight is a recruiting company that helps growing technology companies from the Silicon Valley enter and scale in the Japan and APAC markets. I founded ScaleInsight to support rapidly growing technology companies from all over the world including the Silicon Valley facing similar problems. We aim to and enjoy helping companies as they look to enter and scale in the Japan market and also help candidates as they look to advance by giving them insights to discover new career opportunities. If you are interested to learn more about career opportunities in Japan/APAC, or if your company wants to learn how to improve your talent acquisition strategy or enter into the Japan or APAC markets we can help you.

August 4, 2022

Andrew Nimmer ScaleInsight K.K. CEO/ Founder

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