Japan’s employment laws heavily favor employees, so it’s essential to understand every regulation to stay compliant. And, because firing employees in Japan can be incredibly challenging, the initial recruiting and hiring process becomes even more critical.
Recruiting in Japan
It’s essential to have an understanding of typical workplace culture and general etiquette before you begin the process of recruiting talent in Japan. Keeping the following guidelines in mind will help ensure that the recruitment process is as smooth as possible for you and your international staff.
1. Give Formal Greetings
When you meet a prospective candidate for the first time, they’ll most likely bow and wait for you to shake their hand. Be sure to use formal titles during conversation rather than referring to the candidate by their first name.
2. Respect Privacy
Privacy is very important in Japan, so avoid asking overly personal questions during your initial meetings with prospective hires. Inquiries about family, relationships, and even work history may be seen as pushy and overbearing.
3. Be Punctual
Punctuality is essential in a Japanese workplace. Candidates will probably arrive to meetings and appointments with you a few minutes early to ensure that they are ready to begin at the scheduled time. You should plan to do the same. If you do end up running late, let the candidate know ahead of time.
4. Appreciate the Value of Collectivism
In most Western countries, employees place a high value on their individual achievements. This is not the case in Japanese workplaces. Employees in Japan put more emphasis on the contributions of the team as a whole. Don’t be surprised by this mindset, and don’t write off a potential hire who doesn’t seem to sell their skills very well.
In Japan, staffing can be a challenge. The labor force isn’t growing significantly, and there isn’t much fluidity in the job market. Even so, there are plenty of talented employees to fill out your international team — you just need to know where to look for them.
Many companies in Japan hire through a traditional process known as shinsotsu. These companies recruit candidates for specialized jobs at the graduate level, hiring them based on ambition, character, and communication skills as soon as they leave prestigious universities. However, new graduates tend to lack specific job skills, experience, and technical knowledge. As a result, shinsotsu may not be the approach you want to take for your company.
Recruiting on social media can also pose a challenge in Japan due to the private nature of Japanese people as a whole. Very few companies choose to invest in recruiting on social media because the engagement is so low.
Online job boards, on the other hand, can be a helpful avenue for companies trying to recruit talent in Japan. You can also choose to work with a local hiring agency. If you do so, make sure the agency has the proper qualifications to help you get the results you want.
One of the most important things to remember as you recruit and staff in Japan is that your potential hires have a lot of opportunities to choose from. You’ll need to act fast and provide a competitive offer if you want to hire the best employees and put your business in a position to thrive overseas.
How to Hire Employees in Japan
Before hiring employees in Japan, draft a strong employment contract that lays out the job’s expectation and termination terms. The Japan Labor Standards Act requires employers to specify matters related to working conditions, including the period of the labor contract, workplace and content of work, working hours, wages, and matters related to promotion and retirement. Certain aspects, like wage and contract duration, are required in writing.
Any company with ten or more employees is required to maintain a set of work rules and file them with the Labor Standards Inspection Bureau. Include aspects such as work hours, holidays, termination details, and wages into these rules.
While you are still in the negotiation phase, list all salary and benefit amounts in Japanese yen instead of US currency.
Japan Employment Laws
Employment compliance in Japan includes following the typical work week hours. Employees usually work 40-hour weeks Monday through Friday unless otherwise stated in an agreement with a union or labor group.
Overtime is a sticking point in Japan, so an employment contract should state the maximum hours of overtime work for your company. In a single month, the number of hours of overtime and work on days off must be less than 100, and the number of overtime working hours per year should not exceed 720 hours. The overtime rates in Japan are as follows:
- Basic overtime: 125% of hourly wage
- Work on a rest day: 135% of hourly wage
- Overtime between 10 p.m. and 5 a.m.: 150% of hourly wage
- More than 60 hours of overtime work a month: 150% of hourly wage
Onboarding in Japan
Japan employment compliance also stipulates how to onboard employees. Before a new employee starts, you’ll need to register them with the appropriate authorities and provide a variety of documents within the applicable deadlines. For example, pension and health insurance forms are due within five days of an employee’s start date, while the insurance report should be sent within 50 days.
It is also best practice to explain what you expect from your workers before their start date. Send an email to remind employees about your company’s regulations, dress code, first-day itinerary, and work rules.
Benefits of Hiring Outsourcing in Japan
Japan’s various employment laws often make it difficult to hire and onboard employees yourself. The easiest way to stay compliant is to work with a Japan hiring outsourcing company or a global PEO. Globalization Partners hires employees on your behalf, so you can start operations sooner without establishing a subsidiary.
We take care of paying your employees, dispersing benefits, and handling all compliance issues that pop up. We’ll also act as the employer of record, lifting the liability off your shoulders and placing it on ours. Contact us today to learn more about our services.