By Barrett Ishida
An American startup’s time in Japan is often over as quick as a song at karaoke. In fact, 3 out of 5 will leave the market within two short years. Recruitment of talent is one of the areas that presents challenges, so what about it is making the 60% of early exits sing off key?
When Japanese startups enter the US they send their own to manage the transition but when American startups go to Japan, they look to hire a local as a country manager. Saki Igawa for Blue Bottle Coffee and Tomoyuki Takada for Yelp to name a couple. This helps bridge the gaps in knowledge of the market and culture, and enables quicker searches for business partners. The harder part is building a team around them.
With only 1.5% of the population being comprised of non-Japanese, chances are you’ll be hiring Japanese nationals. And since Japan ranks somewhat low in English language ability, the difficulty in communicating with headquarters in the US can present a barrier at meetings. You could raise a "but" to the fact that every one studies the language in school, but the truth is that there aren't many countries where a person can earn a $60k paycheck without being able to speak a lick of English. Japan is one of them.
Impending talent quality shortage may be a looming issue. Japanese tech companies already are having trouble finding web engineers, for example, and many capable workers in that space head to Silicon Valley for bigger opportunities and much higher salaries. Only 18.5% of the current working population is classified as professional (compared to 37.9% in the US), further slimming the pickings. Add to that Japan’s aging society and underemployment of women, both having already been well documented, and it's understandable that recruiting similar talent as back in the States may be a little more challenging. The country is also behind the US in terms of industry, according to recruitment agency Wahl & Case, so experience may be lacking due to the non-existence of certain roles.
Recruitment itself is also different. The hiring season is in April, where Japanese firms sign on new college graduates who have been taking part in a job application process that began a year or two before. And in a country where 18% consider the company’s name to be the most important factor in choosing their place of employment (compared to just 4% in the US) and where the average tenure is 11.8 years (compared to 4.6 in the US), can a new, no name startup from overseas really be trusted by these risk averse job-seekers?
So what can be done to help ensure your company is amongst the 40% singing in Japan for longer than a couple years? Find good partners in Japan with English and Japanese ability who know the culture and market, truly localize your product and commit to Japan not just for the short term. You may find yourself scratching your head at some of the things being advised to you, but it’ll help your business stay in tune in a market that potentially has some huge rewards for you.