Japanese workers used to work with a blank contract with no clear position or duty permanently in one company. This unique system attracted foreign researchers, which they call Japanese-style employment. Nowadays, people in Japan call it membership-type employment, in contrast to newer introduced job-type employment.
What are the differences, and why is the membership-type system usage declining?
Japanese Employment System
The Japanese-type employment system was commonly used around the 1960s when Japan was in the high economic growth era. It still exists in Japan today. The companies aimed for long-term or permanent employment and a harmonious environment. The employees were loyal to the company and prioritized it over their personal life.
The Japanese-type employment system treats their workers as a member of the company. Everyone was hired under the same condition. After working diligently for a few years, they can get promotions. It’s common to rotate to another department, even if they have no expertise in the area.
The result of this system is generalist workers, instead of specialists. They accumulated skills and experience through cross-department rotation and office relocation. Japanese companies thought a generalist employee would make a good manager later.
This system was primarily used in Japan for decades until the economy crashed in the 1990s. The declining economy in Japan caused many companies to collapse. At the same time, foreign companies started to enter due to Japanese business deregulations. These companies are called Gaishikei or foreign affiliates.
The Gaishikei normally apply their own system, following the customs in their home country. They hire employees based on skill and experience. Unlike the Japanese system, employment contracts have clear duties, work hours, and office locations.
Why Did The System Shift?
In the 2000s, Japanese companies started to adopt the job-type employment system beside the membership-type. The shift happened because of a couple of reasons, but the main prompter is globalization.
Due to globalization, local companies in Japan compete directly against foreign companies. Some also expanded and branched out outside Japan. The generalist workers in Japan now have to compete or partner up with specialized workers overseas. Therefore, Japanese companies started to search for experienced workers by adopting a job-type employment system.
However, the shift between membership-type and job-type employment happens slowly. Some companies in Japan are afraid the job-type employment system will disrupt group harmony. The reason is that job type makes the employees work independently and focus on individual achievement. It contradicts Japanese work culture where teamwork and group benefits are emphasized.
The Difference Between Membership-Type and Job-Type
After reading the paragraphs before, you may have an idea of the differences. But let us discuss this deeper by comparing the duties, salary system, job location, and stability in both types.
In membership-type employment, the contract is blank or known as seishain. There’s no clear description of the duties. So, the employees rotate departments once in a while. Sometimes, the employees can also cover their coworkers with short notice. The boundaries between roles are not defined.
Job-type employment sets a clear description of the work for the employees. The boundary is clear. They can’t rotate to the department outside their expertise.
Salaries in membership-type jobs are based on years of service. The employees get into the company in similar conditions (fresh graduate, little experiment, and the same blank contract), so the salary gets raised periodically. If the company's performance is good, everyone will get a bonus regardless of their personal performance.
For job-type employment, the salary is based on the workload and performance. The employees are on constant evaluation. They can get an incentive if their work significantly contributes to the company’s performance.
Membership type employment required their employees to be ready for relocation anytime and anywhere. Employees are also required to work long hours in the office because of the mutual-surveillance system.
Job location is defined and limited in the job-type system. In principle, there is no relocation. Also, the employees had more flexibility in terms of working remotely. Since they are skilled in their area, the employer does not have to supervise them all the time.
One of the main advantages of membership-type is stability. It is a long-term employment with little chance to be fired. Moreover, every employee will get a retirement fee regularly.
The job-type employment doesn't offer permanent stability. The employees work for their skill, so they are replaceable if they are lacking. There’s also a possibility some positions become redundant due to technology.
Employment System in Japan on 2022
The world has been through a pandemic since 2020. It changes how companies and offices operate. During this time, the shift from membership-type to the job-type system is accelerated.
Almost everything has turned online these days. Employees started to work remotely. However, it is difficult for membership-type employment because the employer used to supervise their subordinates directly. Especially if the employees just moved to the department a while ago.
To do remote working efficiently, the employer has to trust them from afar. They need skilled workers with defined responsibilities to keep the business going on. Job-type employment is regarded as a better option during pandemics. Since the employees are experienced, the employer can just hold a meeting around once a week to monitor the progress.
Work from home
The job-type employment is expected to spread extensively in the next few years. It has steadily gained popularity, especially among women and younger generations. The previous system was unfavorable for them.
Women used to work for a short time before getting married and having babies. There is societal pressure placed on women to take care of children and the household. Many Japanese companies are also not accommodative for working mothers. Remote-working with a clear job description and work hours will be convenient for them.
The younger generation also prefers the new employment system. They can climb the corporate ladder quickly based on skills and achievements, instead of waiting a couple of years. Many don’t like to stay long in a single company. If they disapprove of the work, the boss, or the environment, they will leave. Switching a job in the middle of a career is more common than before.
Now that you have learned the employment type in Japan, which one do you think will suit you better? The conventional membership-type or the currently rising job-type system? Both types have pros and cons, so make sure to consider them carefully before signing a contract.