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Working for a Foreign Company

Conservative, bureaucratic, old-fashioned, dinosaurs are all words that immediately come to mind when I think about Japanese firms. Some other words would be irrational and frustrating. Before I go into a tirade against Japanese firms, however, let me say that working at a Japanese company can actually be a very good and rewarding experience, provided that you go into such job knowing the territory, what benefits are to be expected and the limitations.

Japanese firms generally have three types of employees. The first is regular employee or seishain. This is what is meant by "life-time" employment. This first category is further divided into career track and clerical roles, which traditionally have been made up of salarymen and office ladies. But little by little more women are entering the career track roles. People with the clerical status (jimushoku), who are generally ladies, are fixed to a particular office and cannot be transferred while career track employees can be transferred to another city or even another country with as little as two week's notice not unlike the army. Most larger companies have employee unions which have signed off on these working terms, so they are a legal. In other words, if a company orders you to move to a new city to work starting in two weeks, you have to go or you will lose your job.

Next is contract employee (shokutaku shain). This person is employed directly by the company based on a one-year contract. Often these are people who join the company in mid-career for some specific purpose. After mandatory retirement at 60, some employees are rehired for another few years under the status of contract employee and greatly reduced wages.

Dispatched employee (hakken shain) is the final category and perhaps the most common for foreigners. This is a person who is sent to work at the company from an outside dispatch company. Temporary company is another word commonly used and in the case of Japanese these work periods generally ran three to six months but were often renewed. In the case of foreigners, it was very common to have one-year contracts to work at Japanese firms through these "temporary" companies.

After the employee dispatch law was amended in 2012, these contracts have almost exclusively been three months for everyone, and they seldom run longer than three or four years. This is because the new law requires companies to hire anyone working for five years as a regular employee. Companies rarely want this responsibility so temporary employees are now regularly flushed and recycled before ever reaching five years.

There are, however, "a few" instances of companies being so pleased with a dispatched employee that they voluntarily hire some people as seishain in order to keep people long-term. The emphasis there is on the words "a few." In other words it is not very common.

Regardless of your status, if you start working at a Japanese company with the idea that you are the same as everyone else and maybe will be a manager in a few years if you work hard, you are in for a serious culture shock. In fact, let's get everything out on the table straight away, no beating around the bush and no polite fictions.

Most Japanese companies systematically and openly discriminate against people. In the past it was sometimes explicitly stated in company policies; women cannot hold this kind of position; foreigners cannot be hired as seishain; do not hire Korean Japanese, etc. Want ads often read, "Japanese only," "male only," "must be under 28" (ladies in particular must often be under a certain age), "single ladies only," etc. In recent years such discrimination has gone underground and not listed in official policies, but it is very clearly still present.

All of this should not really have much effect on you, unless you are a rights activist who believes it is your mission in life to right all of the wrongs in Japan. In that case you will have your work cut out for you, and you will be very busy.

For most people, however, I would like to advise you to look at Japan as a glass that is ninety percent full as opposed to one that is ten percent empty. At most Japanese companies there will be plenty of opportunity for you, and the glass will indeed be ninety percent full.

When you first start working, you will no doubt just be relieved to have a job and be looking forward to your first month's paycheck, which is great. From this point you should look at your job as a source of income, good experience and making some friends. You should not have any expectations for any substantial training or career advancement. As the old saying goes, do not expect much and you shall not be disappointed.

On the contrary, you should decide where you want to be in two, five, ten years down the road and then actively seek out, on your own, the training and knowledge you need to get where you want to be. Do not expect the company to do this for you, even though they will be doing it for Japanese staff. For these people, however, the company dictates most aspects of their lives like the army. You should use the job to learn whatever you can, and then be ready to move on to something else in a few years.

From the company's point of view, in most cases they just want to use you for some specific purpose and then replace you with someone else when you grow tired of that specific purpose, kind of like a disposable razor blade. The reason nearly every Japanese company does not offer career track jobs to foreigners is because they believe that only Japanese can have a career and be entrusted to take up important positions in the company.

Foreigners simply cannot be trusted as they do not possess the proper loyalty that in engrained in the true Japanese spirit. Thus, foreigners will almost surely selfishly job hop to another company as soon as a good opportunity presents itself.

This is by no means the unanimous opinion of everyone in a Japanese company, but it will be the majority opinion of the older hierarchy in the company. Even among some of the upper executives who might have a different opinion, it would be very unlikely that they would take any risks associated with promoting a progressive personnel policy.

However, do not be discouraged by this. Many foreigners successfully work at Japanese companies, gaining valuable experience which they then take to career track and usually better paying jobs at foreign firms after being denied careers at the Japanese firms. One person I knew had studied Japanese in Japan for two years and then returned to the U.S. to complete an M.B.A. degree. After graduating, he obtained a job with a leading Japanese securities firm. He worked there for two years at a less-than-respectable salary for someone with his education. This salary was, however, the same as all other Japanese staff his age. He then changed jobs to a U.S. securities firm and was soon earning a quarter of a million dollars a year.

It was almost as if the Japanese firm was providing a paid internship, and in fact that is how you should look at the situation. After a couple of years, instead of getting bent out of shape because of a lack of opportunity and discrimination, just be glad to have had the experience and take this important commodity to a firm that recognizes its value. It is the Japanese firm's loss and your gain.

When it comes to working overtime, do not get caught up in any illusion that you will have a future with the Japanese firm. One of the biggest misconceptions I have seen in several books that talk about working in a Japanese company is this notion that you will be expected to work long hours of overtime just like everyone else. That's bunk!

First of all, the majority of foreign employees are under contract from an outside dispatch company, and often the compensation is not that bad (¥2,000 to ¥4,000 per hour). You are paid for the hours you work because you write everything down on a time sheet. Anything over eight hours is, by law, paid at 125 percent. Moreover, with the exception of 10 paid personal holidays a year (provided for by law), all of your compensation will be in the form of cash (no bonuses). This is a big plus in regard to overtime work because your overtime wages are based on a higher hourly rate.

Thus, it is generally just the opposite; most managers will not want you hanging around after hours because they will be getting the bill for it at the end of the month. You will likely be asked to submit a detailed report about exactly what job you are working on each time you submit overtime hours, particularly in this cost-conscious post-Bubble era.

Japanese employees on the other hand often do work rather long hours, arriving early and leaving usually no less than an hour after the official finishing time; and they are not paid for much of this. It is what is commonly referred to as sabisu zangyo or "service overtime." In addition, often 50 percent of a Japanese employee's compensation will come in the form of non-base-salary items.

The two semiannual bonuses may consist of 35-40 percent of the total compensation, and there are generous housing allowances, which usually consist of staying in company housing for a Y100,000 per month less than market rates. However, the housing allowance only becomes attractive if you are married and have children. Single people receive a small allowance or must stay in what is usually an old cramped one-room dormitory often with communal facilities.

Sound good? Think again. A company that officially finishes at 5:15 p.m. might only allow employees to fill out overtime sheets from 6:00 p.m., the official starting time for overtime. There may also be a rule that only a maximum of 20 hours overtime a month can be claimed. Anything over that is not authorized, but it is very common for people to work until 8:00 p.m. or 9:00 p.m. every day and put in 50 hours of overtime a month or even more. These Japanese employees are paid for only 20 hours based on a low base pay (bonuses and housing allowance excluded).

One Japanese manager told me how during the peak of the bubble he had been very busy with several projects and had worked 2,000 hours of overtime in one year (in addition to the standard 1,800 hours of normal work). That meant he was literally working 16 plus hours a day for an entire year. I told him he was crazy, and he replied, "Yes, I was crazy... I was very crazy" as he laughed about the situation in retrospect.

In exchange for trading in their private lives to the company, Japanese seishain are rewarded by being paid one-fifth to one-fourth the value of this extra labor. No wonder Japanese companies push their people to work overtime instead of hiring additional staff.

Would you like to take those personal holidays that are provided by law? Maybe go sit on a beach for a week in Hawaii? If you were a seishain, you would be expected not to do this. Most Japanese companies have special anniversary holidays, for example, one week after 20 years, two weeks after 25 years, etc. Taking an extended leave would require you to have a dying relative (or at least to create one). As a foreigners, however, taking one or two weeks a year to return to your home country would be considered appropriate and generally not be a problem. It might help to get that extra week if your mother were in frail condition and in and out of the hospital every so often.

Again, think about it. Is this a situation that you would like to have a "right" to take part in as you pursue some obscure hope that maybe after 20 years of towing the line you may have a chance to become a middle-level manager? Trust me! Be happy to be a "special guest"; maintain a personal life; make the most out of your experience; develop important friendships; do a good job; and move on when the time comes.

What if you happen to be "lucky" enough to become a shokutaku shain, a direct contract hire based on annual renewable contracts? All of the things I just described will have more influence on you. Again as long as you know the territory, I believe you can still avoid much of the hassle.

A shokutaku shain often has the same pay package and benefits as a regular Japanese seishain. If your employment falls under this category, you will likely be allowed to live in company housing and even wear the company pin—be sure to mind your manners and your speech wherever you go with this pin.

You will also be expected to follow company employment policies, which mean limitations on how much overtime work you can officially declare. Thus, the company will have an incentive to have this kind of employee working overtime, and there will likely be a corresponding pressure to do so. You as the employee, however, should not get into the overtime game through any illusion that this is important for your career. This is where much frustration can come from, for example trying very hard to be like all of the other Japanese by putting in the long hours at the sacrifice of a life after 5:30.

Then after two or three years of making these efforts and not seeing much opportunity available to you, you will begin to reach high levels of frustration. My advice is to not do unreasonable overtime work. Just go home. Take yourself completely out of the frustration picture. Your time after 5:30 would be much more productively spent by studying on your own for whatever qualifications you will need in your career or participating in career training-related activities like computer courses, language courses, Toastmastering, etc.

The Japanese make tremendous efforts to fit in and follow the culture of the office because they have the notion of "life-time" employment, meaning this is where they will be for the next 30 years or so, and they had better not make any mistakes. However, nearly all foreigners will be on short-term renewable contracts, and in most cases foreigners will not be at the same company after two or three years.

Another type of unreasonable overtime would be excess volume of work. If you find yourself at the receiving end of an excessive workload, you simply do not have to do it. This is another illusion that many people have, i.e., that you have to work overtime.

All workers in Japan, both Japanese and foreigners, have an employment contract or guidelines for their employment. Nearly without exception, a seven- to eight-hour work day will be specified. To "force" people to do anything more is illegal, some professions like nursing or fire fighting excepted.

It is often said that contracts do not mean much in Japan, and you should not create trouble by referring to them. That is true to some extent, but do not ever be afraid to pull out your contract and ask to discuss the overtime clause. It is not going to affect your chances for promotion since such chances do not exist in the first place.

Usually there will be some ambiguous phrase like, "The employee will 'cooperate' with the Employer and 'reasonably' carry out overtime work when requested." In fact, "cooperation," is what 95 percent of employees do as a matter of course. However, once the relationship goes beyond "cooperation" and becomes "abusive," this is the point where you simply say, "No, I'm terribly sorry, but I'm afraid I have an appointment to go to," and you leave.

You will not be fired; you already have a one-year contract; and if you do your job well, the company will want you to do another year, even if you are not a workaholic. Particularly once you have begun a second one-year contract, most things will be in your favor. You are guaranteed a job for a year; your experience, training and knowledge in the job give the employer a strong incentive to resign you; and you are moving into the period (after two to three years) where most foreign workers begin to change jobs anyway.

What if you happen to be superlucky and achieve the coveted status of full-fledged, honest-to-goodness, real seishain? This would be a somewhat rare case, and if you find yourself in a company that is this progressive, all I can say is my hat is off to them. This is the way things should be, and in fact many Japanese companies are moving in this direction, albeit slowly.

I think market forces are causing changes, including faster advancement of younger people with new ideas, which in turn should accelerate the transformation of the Japanese company into a more dynamic organization. This is certainly happening, but again, keep in mind we are talking in terms of turtle dynamism, not exactly the speed many Westerners would be used to. Probably in 15 to 20 years, foreign employees will be common place in management at Japanese firms, and the regimented work routine should be more relaxed. (Note: this paragraph was written in 1997. "Eighteen years" later this is hardly the case. In 2015, there are very few foreigners in management at Japanese companies. Some progress has been made but again we are talking about turtle speed progress.)

In the meantime, ask yourself, "Do you really want to participate in the Japanese work rituals?" I believe the answer should be a resounding, "No!" So, be happy with your special guest status where your glass will indeed be 90 percent full. Do not let yourself be overworked, but at the same time, cooperate, do a good job, enjoy this valuable experience at a Japanese company, and be ready to move on when the time comes.