Training Regimes and Diversity: Experiences of Young Foreign Employees in Japanese Headquarters

Abstract

This article investigates the capacity of Japanese companies to integrate non-Japanese employees into headquarters in Japan, following recent initiatives to recruit significant numbers of foreign fresh graduates from universities in and outside of Japan. Grounding the research in the literature on diversity in workplaces and through an interview study with young foreign employees and representatives from human resource departments, this article argues that the nature of Japanese training regimes, mismatches in expectations between employees and employers and a denial of authenticity inhibit the successful integration of young foreign employees. Based on the Japanese case, we question in general terms the complementarity between diversity and inclusion and different kinds of training regimes. The article also points to the possibility that companies use diversity initiatives instrumentally to develop their existing core labour forces with a view to stabilize rather than fundamentally change the status quo.

Keywords

discrimination diversity employment system equal opportunity foreigners human resources inclusion Japan training regimes university graduates

Introduction

In recent years, popular discourses about diversity in Japanese companies have gained in importance, but academic engagement with the issue has so far primarily focused on gender aspects; Japanese companies have been described as heavily gendered institutions, with employment practices historically shaped to the needs of a homogenous male labour force, that continue to disadvantage female employees, despite the fact that female employment has markedly increased and is seen as vital to address demographically induced labour shortages (Acker, 1990; Dalton, 2017; Keizer, 2008; Nemoto, 2013; Olcott and Oliver, 2014). This article aims to widen our understanding of how Japanese companies address diversity issues based on an in-depth investigation of the situation of another distinct and growing group of employees: non-Japanese fresh university graduates.

Since 2010, large Japanese multinational companies have been systematically hiring young foreign graduates into their Japanese operations (Conrad and Meyer-Ohle, 2019). These recruitment efforts first focused on foreign graduates from Japanese universities, but later shifted to include graduates from overseas universities. Out of Japan’s 50 largest companies, according to 2016 revenue data, at least 37 participated in targeted recruitment events to attract such graduates in or outside of Japan. Five other companies mention the possibility of recruiting foreign employees (own web search). As is elaborated below, increasing diversity is one of the main objectives that companies are pursuing with this systematic recruitment of young foreign employees. Yet, the Japanese workplace has been described as challenging, with long working hours, obligatory socializing with customers and co-workers after business hours, workplace transfers within companies without employee consent and careers built on seniority and long-term employment in one company (Matanle, 2003; Nemoto, 2013; Rebick, 2005). It is these practices that constitute the male-gendered Japanese workplace, putting women at a disadvantage and forcing them to choose between either a career or a family (Bobrowska and Conrad, 2017; Magoshi and Chang, 2009; Nemoto, 2013; Yu, 2009). Nemoto (2013) shows that these practices are not only time-consuming and difficult to reconcile with family life, but also allow masculine behaviour and attitudes to flourish. Men continue to regard women as inferior in fulfilling the demands of the workplace, and this reinforces the status quo of the Japanese company as a heavily gendered organization. Concluding her analysis of gendered organizations, Acker (1990) proposes applying the concept of institutions shaped to the needs of certain groups to issues of race. Along these lines, Magoshi and Chang claim that the factors disadvantaging women in the Japanese workplace also ‘tend to make inclusion of foreigners in the corporate social network more difficult’ (2009: 33). However, they do not elaborate further on this point and it remains unclear how the above factors may hinder the successful integration of foreign workers in Japan. With Japanese companies hiring more foreign employees and the Japanese government relaxing its hitherto reluctant stance towards immigration (Keizai Sangyōshō, 2015), it is important to investigate whether and how Japanese work practices inhibit the acceptance and integration of foreign labour.

This article follows an explorative research approach, focusing on the experiences of young foreign employees and Japanese companies. Instead of the factors that have been found to inhibit female employment, the key reasons preventing the successful integration of young foreign employees identified here are the specific training regimes of Japanese companies, mismatches in expectations between employees and employers and a denial of authenticity. Going beyond the Japanese case, we propose that there is a link between the nature of training regimes and the capacity of companies to accommodate new employee groups. Further, an unexpected motivation for increased diversity can be identified, in that companies still profit from what appears to be the failed integration of foreign employees through positive effects on their existing homogenous labour forces.

Diversity and inclusion in organizations

Since the 1990s, traditional policies of equal opportunity have become displaced in Western countries by arguments about the need to actively manage workforce diversity (Noon, 2007). Diversity has become a popular topic in and outside of academia and an extensive, multi-disciplinary literature has developed (Oswick and Noon, 2014; Shore et al., 2011). Narrow definitions of diversity mirror the existence of non-discriminatory legislation and equal opportunity regulations concerning gender, disability or age, while broad definitions add attributes such as social class, education, skills, as well as cultural and or cognitive differences in organizations (Kochan et al., 2003). Yet a very broad definition of diversity can lead to a loss of meaningful differentiation and equal opportunity initiatives may no longer get proper recognition (Noon, 2007; Zanoni and Janssens, 2004). Accordingly, Mor Barak (2014: 136) defines workplace diversity as the:

division of the workforce into distinction categories that (a) have perceived commonality within a given cultural or national context and that (b) impact potentially harmful or beneficial employment outcomes such as job opportunities, treatment in the workplace, and promotion prospects – irrespective of job-related skills and qualifications.

Mor Barak (2014) also reminds us that US companies initially responded to increased diversity only after recognizing challenges with increasingly ethnically diverse workforces and in response to affirmative action programmes. The so-called ‘business case for diversity’, namely the argument that increased diversity can increase an organization’s competitiveness by offering a better understanding of diverse customer needs and by strengthening employee teams (Herring, 2009; Kochan et al., 2003), only emerged later. Noon (2007) sharply criticizes the business case for diversity because it has the potential to steer companies away from equal opportunity initiatives.

The failure of diversity initiatives has led to a closer investigation of how companies actually deal with their employees (Hays-Thomas and Bendick, 2013). Here, companies are classified as being either monolithic, plural, or multicultural, with the latter assuming a normative ideal position by representing a workplace culture that actively embraces and nurtures cultural differences (Cox, 1991). Exploring this question has led to an interest in the concept of inclusion in order to understand how diversity in companies can work. Mor Barak (2014) emphasizes the degree of belonging that employees feel to an organization, yet Shore et al. (2011) stress the opportunity for employees to satisfy a need for uniqueness as a second element of inclusion. Ferdman argues similarly, but uses the term ‘authenticity’ (2013). Consequently, Shore et al. (2011) develop a four-field matrix that describes organizations that allow for low belongingness and low uniqueness as exclusionary, those that allow for high belonging but low uniqueness as assimilating, those that allow for high uniqueness but low belonging as practising differentiation, and those that allow for high belonging and uniqueness as inclusionary. Ferdman (2017) argues, however, that dealing with diversity and striving to realize inclusion comes with inherent paradoxes and tensions that need to be recognized and cannot be overcome.

Reflecting on measures to hire and retain employees from minorities, Chrobot-Mason and Thomas (2002) introduce a model that views the success of companies as dependent on what they call the specific racial identity of a company in interdependence with the level of racial self-awareness of its employees. Here, organizations range from those that ignore or even devalue racial differences to those where diversity is part of the business strategy. Employees may range from those who have not explored the meaning of their own racial membership to those that have reached racial self-awareness. The different combinations lead to different outcomes, with the authors seeing the best potential for success in what they call ‘positive parallel interaction’. This happens when employees with strong identities come into organizations that see themselves as multicultural.

Japanese companies have for a long time understood diversity largely as a diversity of employment forms. In 1995, Nikkeiren (Japan Federation of Employers’ Associations) argued for the continued need for a core group of long-term employed employees, with flexibility provided by a rising number of other forms of employment (Keizer, 2008; Meyer-Ohle, 2009; Nikkeiren (Japan Federation of Employers’ Associations), 1995). Accordingly, the proportion of non-regular employees has increased significantly, reaching 37.4 per cent in 2014 (JILPT, 2016: 28). However, in a 2002 position paper identified as the starting point of the discourse on diversity in Japan (Hotta, 2015), Nikkeiren itself called for a ‘strategy that through the injection of various attributes (gender, age, nationality, others) and values and ideas allows to respond swiftly and flexibly to changes in the business environment and ties together growth of companies and happiness of individual people’ (Nikkeiren Daibāshiti Wāku Rūru Kenkyū-kai, 2002: n.p.). Yet the focus of diversity management has since been predominately on the advancement of women in the workplace, while age, race, ethnicity, nationality and religious orientations have received far less attention (Assmann, 2016). In the introduction we pointed to the structural factors of the Japanese employment system that have been highlighted as inhibiting the advancement of women in Japanese companies, with some authors suggesting that these factors also inhibit the successful integration of foreigners (Magoshi and Chang, 2009; Nemoto, 2013; Yu, 2009). Our explorative interviews therefore included questions about factors like long working hours, expectations to socialize with co-workers and clients, as well as the role of seniority pay and long-term employment. More generally, we set out to understand the objectives of companies behind the recent hiring of young foreign graduates and the respective experiences of companies and employees.

Methodology

Considering that the systematic recruitment of young foreign graduates is a relatively new and understudied phenomenon, we decided to study the phenomenon through research grounded in qualitative data and inductively rather than trying to develop testable hypotheses deductively. Our explorative framework with semi-structured interviews focused initially on the factors that the existing literature has found to impede female employment, but was flexible enough to allow, after initial line-by-line coding, a focus on emerging themes in further interviews and by focused coding (Charmaz, 2014; Charmaz and Belgrave, 2012; Miles and Huberman, 1994).

We conducted semi-structured interviews with 33 young foreign employees, who at the time of our interviews had been working with Japanese companies for no more than four years after graduating from universities in Japan or overseas (see Table A-1). In addition, we interviewed representatives from the human resource departments of 19 mainly large Japanese multinational companies (see Table A-2). All informants were ensured anonymity. Interviews lasted one to two hours and were conducted mostly in Japanese (some in English) between June 2014 and April 2016.

In terms of sampling, we initially contacted fellow academics, company contacts and alumni living in Japan to introduce us to potential employee informants. Through these we gained further introductions. When asking for introductions, we strove for a mix of nationalities and employees with degrees from different Japanese and overseas universities. The introduction to a network of young Chinese employees in Tokyo helped us to ensure that the largest group of foreign employees in Japan was properly represented (JASSO, 2014). We included some graduates from our own institutions, because we wanted to see what we could learn from their experiences for our teaching practice. We did not have supervisory relationships with any of these graduates. Four employees were introduced to us by their employers after we had arranged interviews with the HR departments. Our experience with these informants, arranged by HR departments on site and during working hours, validated our decision to approach employees and employers separately. While we still found the arranged interviews useful, we sensed some reserve in the responses of these interviewees. Overall, we believe that our sample goes some way in mirroring the composition of the foreign graduate workforce in Japan in terms of university background, gender and nationality, as well as the strong focus on Asian nationals. Our sampling approach meant that while we did not always get to hear both employees and HR departments from the same companies, the openness and candour of responses made up for the loss of a more comparative perspective.

For access to companies, we pursued a non-random selection approach, contacting companies that have publicly shown their resolve to hire young foreign graduates through their participation in specialized job fairs or whose activities were reported in newspapers. The aim was to engage companies that have taken some leadership in the new trend and thus have already accumulated experience in employing non-Japanese employees. This approach led to a sample of 19 companies from various sectors, including many of Japan’s longest established multinational companies.

We triangulated the data for validity (Yin, 2014), both within the interview samples and with reference to other sources such as surveys, newspaper reports and some interviews with recruitment agents and university career centres. Interviews were usually recorded, then transcribed and translated into English. Following Chidlow et al. (2014) and Venuti (2008), we retained some ‘foreignness’ of the source text in the translations, aiming to keep the original flavour of informants’ responses. Translations were checked and discussed among the authors and the data organized in a Dedoose database.

Informant responses showed significant commonalities across our sample, regardless of nationality, gender, educational background, industry sector or the age of organizations, yet the sample size did not allow us to explore possible more subtle differences. Following the aim to tell a ‘collective story’ (Charmaz and Belgrave, 2012: 691), the following interview excerpts are representative and not just isolated individual accounts.

Findings

Prior research on female employment has found that long working hours, obligatory socializing with customers and co-workers after business hours, workplace transfers within companies without employee consent, and careers built on seniority and long-term employment in one company stand in the way of offering female workers equal employment opportunities. Magoshi and Chang (2009) claimed that such factors would also inhibit the inclusion of foreign employees. Yet our employee interviewees seemed less concerned with these issues, even when prompted in this direction. Some foreign employee concerns mirrored those of women, such as having to sacrifice family over work when supervisors did not understand the need to travel overseas for family occasions, but overall, strong demands on their time and flexibility were not a significant worry. Instead, the major themes emerging from the interview data were the nature of Japanese training regimes, mismatches in expectations between employees and employers, as well as issues of belonging and authenticity. Before delving deeper into these issues, we need to establish why Japanese employers hire young foreign graduates.

Given current labour and skill shortages, such as in IT and engineering as well as in international business, we assumed that making up for this shortfall would be the main reason for companies to hire young foreign graduates. When asked about their overall hiring objectives, our HR informants often voiced multiple motivations. The most frequently cited objectives were ‘increasing diversity’ and ‘the need to develop overseas business’. Less frequently, informants talked about ‘skills unavailable in Japan’ and ‘a shrinking domestic graduate pool’ (for more details see Conrad and Meyer-Ohle, 2019). Increased workforce diversity is thus not just a consequence of recruiting more foreigners, but a desired result, and companies can therefore be held to account as to whether they are implementing appropriate diversity and inclusion policies. An HR manager of an IT infrastructure/services company highlighted: ‘Innovation is derived from differences in values, clashes in values, therefore we want to bring in foreign employees’. Yet there are companies where increased diversity is merely seen as a consequence of recruiting foreign graduates for a certain purpose, for example to acquire engineering skills not available in Japan: ‘If we recruit from many countries it will enhance our diversity . . . but we never say we recruit in order to enhance diversity’ (HR manager, electronics company).

Training regimes: ‘I will develop her the Japanese way’

Large Japanese companies treat young foreign employees essentially in the same way they treat young local employees. Employees are recruited as graduates directly out of university, with a focus on higher ranking institutions. With the possible exception of science and engineering graduates, companies are commonly more interested in perceived personal fit than fields of study, academic results or work experience. Employees are given uniform unlimited full-time contracts that do not stipulate a certain workplace or work content. Most employees join the company on 1 April and, after an orientation period with the other members of their cohort lasting from several weeks to half a year, are assigned to their first team-based workplaces. Often, these are positions in domestic sales, with companies aiming to familiarize all their employees with their core business while catering to companies’ needs for manpower-intensive customer services. Thus, an employee of a retail chain or bank may spend the first few years in a shop or bank branch, serving customers and working with clerical and part-time staff. Once delegated to their first position, employees are trained on the job (OJT) by superiors and co-workers:

From the HR point of view, in order to raise their skills or their technological knowledge, we put them in three positions in the first 10 years. . . . It comes from life-long employment . . . (HR manager, electronics company)

I will develop her the Japanese way. First, I will teach her everything neatly. She will master everything about recruitment, she will go through various situations. Then she will either continue to HR-related matters throughout her career or rotate to another business function. (HR manager, chemical company)

HR managers take pride in the OJT approach and see it as the foundation to developing well-rounded and flexibly deployable employees that are well-networked within the company, understand the needs of the company and its business partners and are able and willing to serve their companies long-term.

Yet for many of the young foreign employee informants this slow-paced OJT approach, with its focus on soft as well as hard skills, leads to confusion, with employees not understanding why they were assigned certain tasks. A services company employee, male, voiced that he ‘wanted to work in administration, human resources, trading, something global, where I can develop. Well, like a commandment from God, the company put me into sales’. Once allocated to their section, several employees complained that they were given mundane tasks, like visiting ‘customers on simple document runs, a couple of times a month, every month, it is a routine, just to go there, greet them, pick up some cheque, pick up some application forms or whatever business they have with the bank’ (banking, female), or ‘you have to do the birthday card, collect money. . . .The superiors said “you have only just joined the company, so you do not know anything, so you should do such simple things”’ (HR services, female).

While employees might not understand the underlying reasons, HR managers state that employees are purposefully given such tasks to be able to find their own role in the team-based Japanese workplace, learn how to interact, and how to gather what is expected of them. Yet, a male employee of an electronics company feels that evaluations are lax in the first three years, with his boss emphasizing efforts and adherence to processes over results:

Just do your best, don’t care about the sales figures, go to your customers and appeal to them, that is the more important thing, go once every week, I want to see you out of the office at least once every week.

However, he adds that ‘it is not like they teach you how to do a good proposal, I have to figure it out by myself’. Similarly, a female IT employee appreciates that she is given time to learn (‘in China, you have to produce results immediately or you will be fired’), yet still complains ‘the boss doesn’t express clearly his expectations, even though they do have expectations, it is not made clear’. Consequently, another female IT employee finally complained to HR and her supervisors: ‘“What exactly are you expecting from me, what is my target?” The answer was “the same as what we are expecting from the Japanese employees”, but that didn’t make it any clearer.’

Mismatches in expectations: ‘Why am I here?’

Being inserted into the same training and socialization regime as their Japanese peers, most of our employee informants expressed doubts about their own role in the company. Employees remember what they were told during the recruitment process about companies wanting to globalize or change. ‘In our meeting with the president, which was very formal, two people asked, “What do you want us to do?” and we got the answer “Please contribute to our company becoming more global, the global leader”’ (IT employee, female). Consequently, when expectations of global exposure and playing a role in changing the company are not met, and employees are instead pressured to assimilate, informants report disappointment, feelings of uselessness, and role stress: ‘At first we all have this ambition, like when we join the company, right, we will help Japan internationalize, all the ambitious talk, but once you enter, you realize this is too big an organization for you to even attempt any form of change’ (bank employee, male). A female employee working in HR services expresses similar feelings and, like many others, reports pressures to assimilate: ‘They say that they want to do things differently, like this and that, and want to become a global company, but really in using us they do not want to understand us, but rather ask us to understand them.’ She also feels that it is difficult to contribute in the same way as her Japanese peers:

However, in reality the work is mainly sales and the counterpart is usually Japanese. So there are language problems, communication issues, cultural issues, implicit meanings of utterances like un and ah, so things that foreigners do not understand. So, we try to struggle hard and do it and work very hard to reach the same level as the Japanese.

Employees are thus asking why they have been brought into the company and how they are expected to behave. This situation seems to be aggravated once they move on in the organization, becoming senior (senpai) to more recently hired employees (kōhai) or non-managerial employees, and are expected to train these workers. This leads to confusion among young foreign employees, but can also lead to co-workers and superiors’ concerns that company values and practices are not properly upheld:

I was once scolded quite badly, like, ‘Do not use the gaijin [literally: outside person, somewhat pejorative for foreigner] way to train our staff,’ ‘You are too casual.’ Okay, so I shouldn’t smile that much, I shouldn’t make jokes when I am teaching my staff. (retail employee, female)

Belonging vs. assimilation: ‘You belong to the family, but . . .’

The diversity and inclusion discourse specifies belonging and authenticity as necessary conditions for successful inclusion. We have shown that young foreign employees expect opportunities to express themselves, but often feel that free expression is suppressed. Surprisingly, most employees were still quite positive about the atmosphere in their workplaces. Apart from one employee who complained about unequal treatment in a branch office with only very few co-workers, none of our other employee informants reported discriminatory practices. A female employee of a consumer goods company feels that ‘We are treated as a company employee and not as a foreigner’, while a male employee of an IT and electronics company clarifies, ‘I am used in the same way. In Japanese companies, whether someone is a foreigner or not, there is not much of a consciousness, they don’t really have that’. In terms of belonging, most employee informants considered themselves as members of their work sections and some even used a family analogy to describe their relationships with co-workers. That many companies provide their workers with benefits not usually available in home countries – informants appreciated company housing at highly subsidized rates, transport allowances and the provision of meals – adds to their sense of belonging.

Given that Japan has frequently been described as not particularly open to foreigners (e.g. Simon and Sikich, 2007), statements like the above may seem somewhat surprising. However, HR informants explained that the acceptance of foreigners by co-workers and supervisors has its origin in the egalitarian treatment of all young new recruits, including foreigners. Young foreign employees, regardless of their particular backgrounds, are put through the same careful selection processes as their Japanese peers and receive the same treatment, typically seniority-based remuneration, open-ended employment contracts and long-term, broad career development. The idea is to develop them as fully-functioning members of the core regular employee group who can contribute to the organization in the long-term.

However, employees also reflected on the downside of being treated in this way, having to fully commit to team-based work practices or feeling that differences in backgrounds are being ignored. A male employee of an electronics company states:

The good side is that there is no discrimination, you are one with them. You belong to the family. . . . but the bad side to it is . . . I am from a different background and I hope sometimes they would see things from my perspective.

An IT employee, male, notes that:

there is not much interest in me being Korean . . . do they want me to become Japanese or something? Sometimes I really worry about this, they don’t want to make use of special people, of their background or something, they just want general people.

Some interviewees reported that they reacted to a low level of recognition of diversity in their workplaces by co-workers and superiors by suppressing their own identities, while for others the confrontation with this situation seems to have led to a sharpening of their identities. Some employees even developed anti-Japanese feelings and reported wanting to leave their companies and the country. A female employee working for a corporate service provider, who had studied Japanese at a university overseas and was fascinated by Japanese popular culture, describes her development:

At first, I thought not to worry. To make things work, I will study Japanese, I will serve Japanese customers, I will study the customs, study the way they serve people, and become like a Japanese person, work like a Japanese. However, while I first felt like that, then [when facing problems] I thought it was only my company that was like this, that in this company people are like that. Yet I now think it is a problem of Japan.

Later she states that instead of looking for different work in Japan, it would be best for her to ‘separate from Japan’.

Organizational responses

Many employee informants reported that they were thinking about quitting or talked about foreign peers having done so already. HR informants also admitted that young foreigners were quitting, while such behaviour was rather unusual for young Japanese workers at large companies. Seeking to improve the situation, none of the interviewed companies had come up with comprehensive strategies to manage diversity or achieve inclusion, but some had sought solutions that are discussed as best practices in the Western literature (Kossek et al., 2006). We encountered measures such as special training for supervisors, mentoring programmes, targeted matching of employees and customers, as well as policies to ensure that foreign employees are not delegated to work sections on their own, but in groups of two or more. Yet some HR informants reported that they had gone backwards on promoting stronger diversity. Some companies tightened their selection criteria for foreign employees, emphasizing Japanese language and cultural fit, with some HR informants reflecting on the contradiction between selection criteria and original diversity objectives: ‘It’s a bit strange, but I think we have become a bit more conservative and now take only people that have a capacity to work in a Japanese cultural environment – a Japanese company’ (HR manager, chemical company). Some employee informants reported that their companies had started to experiment with development programmes that might include accelerated career progression exclusively for young foreigners. Yet employees who had been on such programmes expressed concerns about fairness towards young Japanese employees who had not been given such opportunities solely because of their nationality. They also reported that Japanese co-workers and supervisors had problems accepting them and assigning appropriate tasks. Overall, companies are aware of the challenges associated with the recruitment of young foreigners and are struggling to formulate appropriate organizational responses but seem committed to continue hiring young foreign employees.

Discussion

Like other organizations worldwide, Japanese companies have adopted the rationale of the ‘business case for diversity’ (Herring, 2009; Kochan et al., 2003) as a key reason for hiring young foreign graduates. At the same time, companies are struggling to overcome their monolithic character and it remains unclear whether they even subscribe to the multicultural ideal that has gained normative status in the literature (Hays-Thomas and Bendick, 2013). We have also shown that Japanese companies seem able to create belonging among their young foreign employees, but not to provide them with opportunities to display their authenticity, placing them in the assimilation quadrant of Shore’s inclusion framework (Ferdman, 2013; Shore et al., 2011). Faced with assimilation pressures, some interviewees reported that they reacted to a low level of recognition of diversity in their workplaces by suppressing their own identities, while for others it led to a sharpening of their identities. Chrobot-Mason and Thomas (2002) have proposed that such a situation can lead to negative parallel interaction or regressive interaction. Overall, we propose from our data that there is a systemic mismatch between the diversity paradigm informing the recruitment objectives of many Japanese companies and the workplace practices that employees experience.

Magoshi and Chang (2009) propose that the factors that stand in the way of female employment and careers in Japan also prohibit the integration of foreign workers, though these factors did not play a major role among our informants. This could be due to the age and marital status of the informants. However, prior research has shown that the perceived incompatibility between work practices and marital life also prevents younger Japanese women from pursuing professional careers in the first place (Schoppa, 2006). That these factors were of limited importance even to our female informants may be due to several factors. Firstly, long-term concerns may be overshadowed by the everyday experience of the demanding Japanese training regime. Secondly, foreign employees may be less concerned about these factors, because they assume to have alternative career opportunities abroad should things go wrong in Japan. Lastly, a possible self-selection bias must be considered as our informants had already chosen to pursue a career in Japan.

Our data also allows us to think about diversity beyond the Japanese case. The first question to ask is about the complementarity between diversity and inclusion and the nature of training regimes. The Japanese training regime has the following key characteristics: employees are recruited fresh out of university (shinsotsu ikkatsu saiyō) with a focus not on particular skills but potential and personal fit. They are then trained on the job (OJT) by superiors and co-workers with an emphasis on behavioural and communicative patterns towards customers and co-workers. Employees are rotated through several sections over a period of up to 10 years. During this time, employees are expected to develop both soft and hard skills. The training regime forges strong network ties among a recruiting cohort and perpetuates a consciousness about being junior (kōhai) in relation to earlier cohorts and senior (senpai) in relation to later cohorts. Seniors are commonly assigned to juniors and are expected to socialize and help them assimilate into the corporate hierarchy of the core employee group. This training regime was described earlier by Rohlen (1974), and has, as our informant data shows, remained remarkably stable. Young employees are considered by co-workers and supervisors to be in need of training for a prolonged period of time. Evaluations are based on strict adherence to processes and long-term development rather than short-term results. This regime prepares employees for long-term careers in organizations’ internal labour markets, but its focus on company-specific skills and knowledge prohibits employees from switching companies.

We propose that the type of training that young employees experience in Japanese companies leads to considerable and constant assimilative pressure and raises the question of whether training regimes where employees develop most of their skills outside of companies are possibly better at accommodating workplace diversity. In such regimes, employees develop general skills outside of companies, with specific knowledge of domains such as finance, human resources or planning, which allows them to claim a certain expert authority and, as their skills are transferable in the external labour market, to leave companies if they are dissatisfied or feel mistreated. This means that they may be able to resist assimilative pressures, as the threat of them leaving may require supervisors to allow them more room to express their authenticity.

Interestingly, this proposition mirrors findings in the literature on gender and skill formation and training. It has been argued that regimes where training and certification are primarily coordinated through the market outside of companies with shorter-term contracting and less firm-sponsored training can better accommodate female labour. Here, women – whose careers are often interrupted by childbearing and family duties – can better acquire general skills necessary to resume their careers while employers are less likely to demand firm-specific skills (Estévez-Abe, 2005; Soskice and Hancké, 1996; Thelen, 2008). Conversely, in the in-house Japanese training regime, women do not see the value of investing in the acquisition of company-specific skills since they might not benefit from these in the long run, and employers worried about their investments in training are less likely to employ women in career-track positions.

Our second general point builds on the determination of Japanese employers to continue hiring foreign employees, despite the described problems with employee satisfaction and retention. We propose to consider the perceived positive effects that even the failed integration of foreign employees can have on an existing highly homogenous labour force. Our HR informants commented how different ways of thinking and attempting to solve problems had made their Japanese employees more open to such behaviour and prepared them better for working in overseas subsidiaries or with diverse customers and suppliers:

Knowing that there are different ways is important. In 5 or 10 years, it might become useful, for example, when they [Japanese employees] go overseas to work. They will know that there are people who cannot work if there is no job description. (HR manager, chemical company)

Similarly, another HR informant highlighted a new preparedness among Japanese branch officers to deal with non-Japanese clients after they had interacted with young foreign recruits. That means that even if foreign employees quit, their presence can be seen in a positive light and not as a wasted investment. We suggest calling this a ‘catalyst perspective on diversity’, where the development of existing employees is a reason behind hiring new groups of employees. Diversity in companies has been considered a result of hiring people of different groups, a desirable objective in itself (terminal value), or to instrumentally improve competitiveness (instrumental value or ‘business case for diversity’) (Kochan et al., 2003; Olsen and Martins, 2012). A catalyst perspective on diversity is of course also highly instrumental and thus an expression of the business case logic, which has been rightly criticized (Noon, 2007). As the diversity initiatives in Japan involve young foreign graduates, who have no prior work experience and often lack confidence working in a foreign country, such an approach is obviously problematic. Recent Japanese initiatives to employ more female workers have also been described as highly instrumental, purely out of necessity and with only minimal changes to male-dominated employment practices (Nemoto, 2013). Equally, the initiative to recruit foreign employees into Japanese companies could be regarded not as a way to fundamentally change Japanese employment conditions, but rather as a means to maintain the status quo.

Conclusion

Analysing the hiring of young foreign employees by Japanese companies into their operations in Japan as a new and distinct recruitment trend, this article develops propositions on the state of diversity in Japanese companies. Based on our interview data, we argue that the nature of the Japanese training regime, mismatches in expectations between employees and employers and a sense of belonging conflicting with a loss of authenticity all inhibit the successful integration of young foreign employees into Japanese companies. Factors that inhibit female employment and careers do not play a major role.

Developing our thinking about diversity beyond the Japanese case, we propose that there is a link between the nature of countries’ training regimes and their ability to accommodate workforce diversity. Moreover, our data allows us to reflect on the objectives of diversity initiatives and we have identified an instrumental view of diversity, where the introduction of new groups of employees is considered a catalyst for developing the behaviour and mindsets of existing employees.

As foreign graduate recruitment is a new phenomenon, we employed an explorative and qualitative research design. While our informant sample largely mirrors the composition of foreign graduate employment in Japan and thus facilitates the development of propositions based on identified commonalities, the overall size of the sample means that we cannot draw any conclusions about the possible more subtle differences linked to nationality, gender or educational backgrounds. While our research focuses on large companies and graduates from highly ranked educational institutions, which have played a dominant role in the literature on the Japanese employment system, the situation in small and medium-sized companies, which have also started to recruit young foreigners, requires further investigation. We also see a need for future quantitative empirical and comparative research, as well as longitudinal research that tracks the development paths of young foreign workers. Here, it would be especially interesting to ask whether assimilative pressures diminish as employees progress in their careers and whether they are eventually provided with more room for authenticity and creativity once they are finally seen as having mastered the ‘basics’. Furthermore, while our research focuses on the perspectives of HR departments and foreign employees, future research should address supervisors’ perspectives in more detail.

To conclude this article, we point to possible ethical implications of the employment of young foreign employees by Japanese companies. The authors believe that by hiring these workers companies take on a special responsibility for their wellbeing. Certainly, this group of employees is highly educated and many of them have had some experience in Japan and Japanese language skills before taking up their employment. They also receive the benefits and employment security afforded to Japan’s elite, which puts them in a privileged position when compared to the often criticized situation of lower skilled foreign employees on temporary contracts in blue-collar employment (Onuki, 2016). Yet expectations towards these workers are high and they are inserted into employment environments that are challenging, even for young Japanese employees. The Japanese training regime is not conducive to promoting diversity. The fact that this training regime emphasizes soft-skills and is very dependent on the individual training styles of co-workers and superiors, as well as nurturing employees through trial and error, leads to considerable ambiguity. Consequently, young foreign employees experience significant role stress. Having no prior work experience in their countries of origin, they have particular difficulty in making sense of their experiences. While companies might not be able to change key elements of the recruitment and training regime, such as replacing OJT or introducing detailed job descriptions, they could alleviate some uncertainties by explaining their training regime and objectives and being clearer as to whether they expect foreign workers to assimilate or indeed to behave differently.

Footnotes

Appendix 1

Table A-2.

Details of interviewed companies.

Sector	Total number of Employees (Thousands)	Overseas Sales as % of Total Sales
Electronics	100–150	Over 60%
IT Infrastructure/Services	150–200	Over 40%
Trading Company	5–10	Over 20%
Chemicals	50–100	Over 40%
IT Infrastructure/Services	100–150	Over 20%
IT Network/Systems	5–10	N/A
Heavy Machinery	25–50	Over 40%
Advertising	>5	N/A
Logistics	150–200	Under 10%
Chemicals	25–50	Over 20%
Engineering	0.5–1	N/A
Electronics/Home Appliances	200–300	Over 40%
IT Network/Systems	10–25	Over 10%
IT Network/Systems	0.1–0.5	Under 10%
Banking and Finance	50–100	Over 20%
Automobile	100–150	Over 60%
Trading Company	50–100	Over 20%
Trading Company	25–50	N/A
IT Infrastructure/Services	5–10	Under 10%

Note: Employee numbers as well as the overseas sales ratios are only presented in ranges to give an indication of company size and degree of business internationalization while maintaining anonymity.

Sources: Toyo Keizai (2015) and company websites for employee numbers. Sales data kindly provided by Nomura Research.

Acknowledgements

Both authors would like to thank the editorial board and the anonymous reviewers for their very helpful comments, as well as Nomura Research for providing the overseas sales data reported in Table A2. Hendrik Meyer-Ohle would like to thank Waseda University for hosting him as a visiting scholar.

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: the authors acknowledge the support of the Japan Foundation Endowment Committee (Grant 561-1014) and HDRSS Funding, Faculty of Arts and Social Sciences, National University of Singapore.

ORCID iD

Harald Conrad

Harald Conrad is Professor of modern Japanese studies at Heinrich-Heine-University Düsseldorf, Germany. His work has been published in International Journal of Human Resource Management, International Migration, Japanese Studies, Journal of Social Policy, Social Science Japan Journal and other journals.

Hendrik Meyer-Ohle is Associate Professor in the Department of Japanese Studies at the National University of Singapore (NUS). His publications include Japanese Workplaces in Transition: Employee Perceptions (2009), Innovation and Dynamics in Japanese Retailing: From Techniques to Formats to Systems (2003), and Corporate Strategies for Southeast Asia after the Crisis: A Comparison of Multinational Firms from Japan and Europe (co-editor with Jochen Legewie, 2000).

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