Because the rotation patterns, advancement rates, and compensation and benefits structures of the Japanese human resource management system and the systems typically used outside of Japan are so vastly different, Japanese companies operating in other countries usually do not attempt to do a wholesale export of the way they manage human resources in Japan. Instead, they create local systems that fit the local human resource customs, laws, and culture, enabling them to attract local employees with competitive opportunities. This is quite sensible, and in fact, when Japanese firms don’t sufficiently localize their compensation, benefits, and other employment practices in their overseas operations, they are likely to encounter difficulties.
However, this localization of human resource practices can present an obstacle in the long term for the career prospects of locally-hired employees. When locally-hired and Japanese employees are managed under two separate human resource systems, the locally-hired employees may not have access to the rotational and advancement opportunities of the Japanese system. Instead, typically their management and career planning is entrusted to the overseas operation, which may not have the time or resources to devote to the long-term development of locally-hired staff. Historically, very few Japanese companies have had headquarters-based mechanisms for systematically tracking and developing overseas locally-hired employees.
Recently however, Global HR has become an area where Japanese firms are putting increasing attention. This is due to a growing realization that it’s not possible to fill all the key positions in a global company with people sent from Japan. In order to build a strong global organization, it’s necessary to draw upon talented people from all countries, not just those from the home country. This is something that successful western multinationals realized long ago, but it’s only more recently that Japanese organizations have begun to embrace this way of thinking.
Recently there are more examples of Japanese firms that are creating global databases of all their employees, not just the ones hired in Japan, for purposes of targeting development activities and doing succession planning. This kind of effort is an important first step toward a company getting a global grip on what kind of people it has, with what talents, where.
Our firm is also seeing more Japanese companies bringing non-Japanese employees to Japan for training, whether it’s for short seminars, or longer stays. This is something that we always encourage, as it’s a very effective way to help overseas staff get a better understanding of the parent company and Japanese culture, as well as develop stronger relationships with parent company staff. In the past, many Japanese companies were reluctant to invest in these sorts of programs, which can be quite costly due to the high cost of living in Japan. Now however, recently more and more companies are realizing that money spent on such programs is an effective investment.
Another recent trend is Japanese firms who are creating global-scale training programs. This might be programs that are uniform globally but implemented in more than one country. Or a program that draws high-potential leaders from across the company’s global operations to participate together in leadership development.
This increasing attention by Japanese firms to Global HR and investment in overseas hires is a very positive trend that I’m hoping will continue.
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