Lecture 4: Support for employee career development and human-resource development by Japanese firms (2) | Japan’s HRM & IR Information | Publications | The Association for Overseas Technical Cooperation and Sustainable Partnerships [AOTS]

February 16th, 2022 [No. 94-2021]

Dr. YAMADA Hisashi,
Vice Chief Counselor, Senior Economist,
The Japan Research Institute, Limited

Japan's initiatives as recurrent education grows increasingly important

Lecture 4: Support for employee career development and human-resource development by Japanese firms (2)

As the pace of change in economic conditions has accelerated while, at the same time, workers increasingly need to work longer careers, it has become difficult to maintain the lifetime employment that has been a characteristic of the Japanese employment system. This is because amid growing needs for revisions to business structures, acquiring external human resources with expertise in new businesses is growing increasingly important, while it is also becoming difficult to maintain excess workforce in shrinking existing businesses. As we noted in the previous issue, the necessity of active career building has come to be recognized on the employee side as well.

In light of these trends, human-resources development inside the company has been shifting from a selective basis to one in which the individual employees play active roles, as companies have begun to take individuals' wishes into consideration in assignment of human resources. According to a survey of Keidanren (Japan Business Federation) member companies [7], the number of respondents that have adopted internal recruitment programs has risen to 54.9%, while 16.9% have introduced free-agency programs. While at the time of the survey only 5.5% reported that they "prioritize employees' own intentions as much as possible" in employee transfers (reassignment or job transfers), 11.2% said that they intended to introduce such a policy in the future. As future courses of action for employee career building, 25.9% of respondents answered that such measures would be company led, while 62.9% reported that they would emphasize employee autonomy. In the area of training programs for employee skill development as well, while about 40% of respondents said that they planned to expand programs that employees could choose to take on their own accord, and respondents were adopting diverse training methods such as e-learning, external seminars, and distance learning in addition to in-house group training.

"Reskilling" has attracted attention recently in light of these conditions. In the background behind this attention being paid to this concept is the progress of digitalization. Digitalization involves the overall transformation of the forms companies take and their business processes, and it demands that a wide range of employees—not just IT technicians, acquire digital knowledge. Ensuring that employees master new business knowledge and skills premised on utilization of digital technologies is essential to the survival of Japanese businesses. In light of these circumstances, increasingly major Japanese firms are introducing activities such as online training programs on AI and digital fundamentals or training to learn about AI and IoT.

Traditionally, Japanese companies have emphasized internal employee training, centered on OJT training. But in recent years, difficult business conditions have led to decreases in funds available for education and training overall. Ironically, the European and American firms that have advanced business innovation through digitalization also have taken the lead in reskilling, through proactive investment in human resources. There is a need to transform toward active career building in response to large-scale changes in economic and social conditions, and traditional group training by employee level, centered on OJT training, is behind the times. There is a need for new human-resource development strategies to enable active, efficient learning of the new knowledge and skills needed in business today, reflecting individual needs, through proactive use of means such as e-learning and external training programs, while also encouraging career independence.

[7] Keidanren (2020), "Results of survey on human-resource development."

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