Japan: Economics in Everyday Life

12. Why Do Japanese Companies Hire Only Spring Graduates?

12 Why Do Japanese Companies Hire Only Spring Graduates? Teruyuki Higa New graduates pour forth from Japanese universities in March of each year and officially begin their employment in April. This phenomenon is also the culmination of several months of concentrated, large-scale hiring efforts of Japanese companies and governments. Only the most fortunate, best graduates are hired by the large, well-established companies or enter civil service and enjoy virtual lifetime employment. The less lucky, if they do find a job, are hired by smaller companies that do not have the resources of the larger and governmental employers, and are therefore less likely to find desirable lifetime employment. A few stragglers, usually less than one percent, who graduate in the fall, along with an increasing number of spring graduates will not enter “regular” employment immediately after graduation. These hapless individuals may be destined for a lifetime of intermittent or self-employment . In Japan, anyone who deviates from the normal pattern of moving directly from school to work is regarded as a misfit. At other times of the year, companies usually restrict their hiring to temporary, part-time, or seasonal workers. 83 This mass, once-a-year hiring routine, known as shinki gakusotsu ikkatsu saiyo - (all-at-one-time hiring of new graduates) I call “shot-gun hiring.” It requires close coordination among schools, teachers, job hunters, and employers to screen out and deliver the best graduates to Japan’s largest corporations and government bureaucracies. The system of coordinated hiring works so well that it has become a key institutional feature of Japan’s post–World War II labor market, along with lifetime employment , compensation based on seniority rather than merit, and enterprise (i.e., company) unionism. How Does Shot-gun Hiring Work? Japanese companies agree not to recruit college seniors before the middle of the summer preceding their March graduation. This agreement between Japanese companies and universities has been in place in various forms since 1953, except during the 1962–1973 period. (Some companies do not abide by the hiring agreement, and try to recruit students before the agreedupon dates. This practice, called aotagai, means “to buy up the rice before it is harvested.”) Schools and employers agree not to post employment opportunities earlier than July 1, after which time the schools will help their students complete applications and schedule screening tests and interviews. The value and prestige of schools in Japan, as elsewhere, are linked to the performance of their graduates in the labor market. Not surprisingly , schools compete vigorously to place their graduates with better companies; and this is particularly true of private universities, which make up the majority of the colleges and universities in Japan. Students who pass the initial screening are first granted interviews in groups of a dozen or more. Formal interviews begin around August 1. A select few are offered a second, more personal interview. Because teamwork is so important in Japan’s 84 Japan: Why It Works, Why It Doesn’t work culture, employers assign a great deal of weight to graduates who were active participants in extracurricular club activities where desirable group cohesion and group competitive skills are developed. Grades are not as important. Companies are allowed to make job offers after October 1. Those students who are offered jobs commit themselves to work for the company of their choice when they finally graduate in March. The most attractive jobs—usually at the largest corporations, which offer higher salaries, better fringe benefits, more personal privileges, and the potential for valuable connections —are offered to graduates from the most prestigious universities. Why Hire Inexperienced Graduates? Marriage is the traditional metaphor for employment in Japan. Both are supposed to imply a lifetime commitment (see chapter 3). Purity and absence of either prior use or preexisting commitments are important in both. Because it is difficult and costly to verify the personal histories of experienced workers, Japanese companies prefer to search for employees among new graduates . Even more important, young recruits are easier to train and mold into obedient and loyal team players. Candidates with prior work experience are more difficult to fit into a company’s internal culture. On infrequent occasions when companies are forced to look for specialized skills not available internally, they may hire experienced workers. But even then, these experienced employees may be given special and separate treatment. In a system where workers are paid according to seniority rather...