Trends and Challenges of HR Management in Japan 2024

Getting out of the ‘traditional Japanese corporate culture’- mindset is the key for success in an era of ‘war of talent’ - Etsuji Suzuki responds to the Nihon Jinzai-News (日本人材ニュース、HR-News Japan) survey on trends and challenges in HR management 2024.

1. Current situation of the HR market in Japan

In General, the current people-demand in companies in Japan gives the impression that they are actively hiring. That is mostly due to the need to recover reduced human resources during the COVID-pandemic. Of course, the situation varies from industry to industry. For example, the food service and hotel industries, which were particularly affected by the pandemic, are facing a sharp shortage of staff, while the manufacturing industry is still short of digital transformation (DX) specialists, who have been in demand since before COVID. Overall, we believe that the people-demand will continue to increase.

However, this trend is also influenced by the factors that will bring deflation to an end. In other words, it largely depends on whether sustained inflation and wage increases can be achieved.

2. Challenges for HR in Japan

One of the main challenges for (Japanese) companies in their recruitment activities, especially in search/recruitment from the talent market, would be how to deal with the "traditional Japanese corporate culture". In order to attract talent, deviating from the existing salary structure should be considered as an option. However, this is currently difficult to achieve for many companies.

Another issue exists in the HR departments of the Japanese headquarters of the companies that are transforming themselves into global players. Even when a global HR system platform is introduced, the HR department at the Japanese headquarters is often unable to properly handle the implementation. This issue has already beenheard from the headquarters of several companies and is regarded as one of the most serious HR challenges.

Particularly in recruiting, companies should move away from the traditional horizontal approach and be more flexible to market principles.

3. Prospects of HR consultancy

Projects related to in-house training and re-training are expected to increase: so-called "reskilling“, for example, to develop DX-capable personnel in-house, and to transfer internal combustion engine engineers to EV development departments at automobile manufacturers.

Of course, internal retraining (reskilling) undoubtedly serves as a valuable strategy for optimizing the effective utilization of human resources within an organization. On the other hand, it would be more efficient for the economy and society as a whole to recruit excellent people from the wider talent market.

We believe that the mission of HR consulting firms is to contribute to the creation of more rational and efficient organizations, and ultimately to the formation of society, by increasing the mobility of human resources.

Written by:

Kienbaum Japan

Original article (in Japanese):

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