Remark on the Japanese Labor Market

※このエントリーは英語で書きます。(This entry will be written in English)

Today, I was talking that internships weren't popular in Japan, and a friend asked me

"How do you know what job you want to have before applying for it?"

I automatically answered that student's are less sure about their capabilities and wills.I also said that the Japanese labour market sucks, because most Japanese work for the first company for your whole life.This wasn't incorrect, but I'm a bit afraid that this gives the wrong impression that Japanese labour markets are rigid.

So, I want to make few points about the Japanese labour market.

This is how it works:

1. When you graduate a university, you try to get into the biggest firm possible.
2. You do not specify your job when you enter. (not like finance, marketing, etc.)
3. When you get into the firm, you get the chance to experience several divisions/functions.
4. After 1-2 years of experience, you will get the feeling of which job fits you well.
5. Your feelings and the outcomes observed by your boss, will help you decide a job.
6. Once in a while, you will be able to change jobs, and build up your career in the firm.
7. If you are or the firm is not performing well, they can decide to make you work in another division, rather than laying you off.

This explains why

• Japanese labor markets aren't so rigid (we have a internal labour market)
• People tend to work longer in a firm in Japan
• Entrepreneurship is less valued in Japan
• Big firms are likely to get the smartest people

In fact, this system is only for the elite students, who can make it to the "best" firms in Japan. The "employment until the end of your life" system only exists for the big firms. If you are in a medium/small enterprise, the situation is more similar to the one in the States. You change a job every once in a while for one reason or the other.

I hope this clears things out. We have a very different, but a somewhat interesting, and soso well functioning system. Or, at least we had a system like this when the economy was good.

Japan and North Korea are the only two countries which have experienced 0% growth over the last 20 years...