Career Fly Special Interview

Previously, Executive Research Fellow and General Manager at NLI Research Institute
Tomikazu Hiraga interview.

We spoke to Mr. Hiraga, who researches business trends and economies in Asia, about the placing of foreign national human resources into the HR market in Japan. Profile of Mr. Hiraga

Resolving the lack of HR is not the only reason for employing foreign national human resources!

Career Fly interviewer (hereafter, C) – Please tell us about the situation of HR in Japanese companies.

Tomikazu Hiraga (hereafter, Hiraga) – There is a serious lack of human resources necessary for doing business globally. As the domestic market shrinks and slows down, many companies are looking to overseas expansion as part of their business strategy. The situation is that there is a great lack of human resources necessary for that. That is, the problem is the lack of progress in procuring and training global human resources.

There are two main reasons for this. One is the “problem concerning expatriates” and the other is the “lack of interest on the part of young people to go abroad”. The situation with expatriates is that “the average age of expatriates is rising to mid-40s” and that “many go on job transfers alone”. First of all, regarding the average age of expatriates, due to the fact that many young employees shy away from working abroad (as will be talked about later), many of the temp staff are turning out to be middle-aged as they are regarded as human resources with experience and know-how and are able to advance business at their destinations. Furthermore, as executives and managers at Japanese companies have a high ratio of men, many expatriates are in fact men. Now on those who go on job transfers alone. When Japanese people are appointed to go abroad, many choose to go alone. For that reason, compared to countries like Korea where they often transfer with whole families, Japanese presence is relatively low.

C – Choosing to be transferred overseas alone influences the presence abroad?

Hiraga – Japanese expatriates often going alone, tend to stay within Japanese communities as they cannot (will not) melt in with local communities. For instance, after work they will go to a Japanese restaurant, shop at Japanese stores, go to Japanese salon, make reservations at a Japanese travel agency, all going in the direction of interacting amongst Japanese. Koreans, on the other hand, go about it much differently. Studying English is a high priority as it leads to finding better employment in Korea. For that reason, they often have the mother and children go abroad at an early stage while the father stays behind in Korea to support them financially so that the children can study English. From their cultural standpoint, if one of the parents gets the chance to go abroad, they see it as an opportunity where the company will support their children’s English education, and so many of them decide to move with their family. As they move with their family, opportunities for interacting with various locations such as schools with locals increases, and so Koreans tend to stand out and their presence and recognition at their destination is rather big.

C – I see. So what is the situation with the younger generation’s attitude towards going abroad?

Hiraga – It is often said that Japanese students are not interested in going overseas. There are young people who say that as ICT continues to spread, news and information about overseas becomes easier to obtain, and they don’t feel compelled to go abroad when Japan is safe and comfortable.

Of course, there are students who are interested in going abroad. Evidently, those who have experienced going abroad at a young age or those who are well informed about what goes on overseas are interested in going there. I seem that receiving information about positive episodes such as having studied abroad short to long term, have many foreign national friends, hearing about life overseas from their senior, leads to thoughts about going abroad. There was a feedback some time ago from a student saying they “wished they were aware of information from overseas, like about from the time of high school”. I felt that what I was teaching in my classes that had the globalization of business as a theme was really being understood, and felt quite happy about that. If there is an opportunity, Japanese people understand, could take action, and accomplish something. I believe that if the opportunity is presented early, it awakens young people’s interest in going abroad and will lead to proactive decisions.

C – I am with you on that. I think the media constantly telling young people that “Japan is No. 1” is causing the misapprehension. Many Asian countries are already beating Japan in many respects. With the great speed at that. Perhaps telling them of the fact that Japanese are misapprehending the situation after being told over and over that Japan is No. 1 will also lead to young people wanting to go abroad as well. As domestic global human resources training is stagnating, staffing with foreign national human resources is unavoidable. So what do you mean, Mr. Hiraga, by “globalization of business”?

Hiraga – I think that “marketing and selling through the destination countries and regions” is the trend of globalization of business in recent years. The globalization of Japanese companies until now was largely about having a production base abroad and lowering costs. For instance, setting up factories in emerging countries with low wages, and creating a production base for exporting to big markets in Europe, the States, and Japan.

C – Selling in countries other than Japan is the trend of current globalization, and really is demanded of Japanese companies.

Hiraga – Exactly. Raising the sales performance of a product in foreign markets with their unique situations, can not be accomplished merely with the knowledge and experience of Japanese. Let’s look at the case of Acecook in Vietnam.

Acecook’s product, “HAOHAO” claims 40% of the instant noodle shares in Vietnam. In the beginning the company brought over the product concept from Japan and started selling through the luxury route, but the sales were not good, and it is said that they thought about pulling out at one point. But then they changed their strategy, hired local staff, changed the flavors, product name, pricing and packaging to fit the location. They targeted the middle class, and gained a customer base residing in the volume zone, and HAOHAO became a big hit there. It’s a success story where the production technology for producing the noodles and soup from Japan were kept, and everything else was customized to fit the needs and desires of the location.
*HAOHAO  A product of Acecook where 50 billion are consumed in Vietnam.

C – In other words, it’s a typical instance of a successful glocalization. It’s an example of in order to sell in that region you need to be tuned into the local feel and sense of things, being familiar with the local culture, people, language, and trends. You can’t accomplish that only with Japanese.

Hiraga – I’ll give you another example. This one is about Samsung refrigerators with keys on them as sold in the Indian market. There was a need to put a key on them to sell in India. At the time, it was the wealthy who used refrigerators. They started using keys on them as their maids were eating the foods or bringing them home without consent. The novel point of this product is that they made use of what the local human resources knew about Indian culture and that there were such incidents going on.
*Samsung product. Refrigerator with a key, sold in India.

C – There are also cases where Japanese businesses have not been able to expand their advanced technology and services they already possess in their companies, correct?

Hiraga – Yes. The examples I gave so far were stories about customization of products to local regions by companies trying to expand in overseas markets. On the other side, there are cases where they have not realized they already possess technology and services that can compete well abroad. For instance, take the PILOT Corporation. For many years, erasable pens, that would later become friction pens, were overlooked. It was a French executive at the French subsidy of the company that by chance realized the potential of the technology. French students only use pens to write, the culture of using pencils and erasers being absent, they used correction fluid when they wanted to correct a mistake. In such a culture the friction pen, which fit with the needs of the students, sold crazily. Japanese companies, while possessing novel technology, tend to be inferior when it comes to linking them up to effective action such as marketing and selling. This is where we get the foreign nationals with their objective and unique perspectives joining the team, producing cases like with the PILOT Corporation.

When it comes to expanding business opportunities for novel technology and services, I think foreign national human resources are very valuable. Moreover, with more Japanese who are able to recognize such ideas and suggestions, we can see more success stories as I just described.

→ Continuous to [Interview: “The Truth About How Businesses Can Not Avoid Employing Foreign National Human Resources(2)”]

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