Here’s what to know about hiring in Japan
Expanding your business operations to Japan presents exciting opportunities for growth and success. However, navigating the intricacies of hiring in a foreign country, especially one with unique cultural norms and legal regulations like Japan, requires careful planning and understanding. This guide provides comprehensive insights and actionable steps to help businesses effectively navigate the hiring process in Japan while adhering to cultural sensitivities and legal requirements.
Understanding Cultural Norms and Expectations
Hierarchy and Respect
Japanese society places a strong emphasis on hierarchy and respect for authority. Employers are typically highly respected, and employees are expected to adhere to formalities and deference in the workplace.
Group Harmony
Japanese culture values harmony within the group (or “wa“). Employers should prioritise teamwork and consensus-building when hiring and managing employees.
Work Ethic
Japanese workers are known for their strong work ethic and dedication to their jobs. Employers should emphasise commitment and diligence when evaluating potential hires.
Communication Style
Japanese communication tends to be indirect and implicit, with an emphasis on non-verbal cues and context. Employers should be mindful of cultural nuances in communication during the hiring process.
Legal and Regulatory Framework for Hiring in Japan
Employment Contracts
One consideration to take when hiring in Japan is employment contracts. In Japan, employment contracts are legally required and typically include details such as salary, working hours, benefits, and termination clauses. Ensure that employment contracts comply with Japanese labour laws and regulations.
Working Hours and Overtime
Japanese labour laws stipulate maximum working hours and overtime limits to protect employees’ rights.
Working hours
Under Japan’s Labor Standards Act, working hours are fixed to 40 hours a week, with a maximum of 8 hours a day. Some employers may opt for the modified working hour system, wherein employees work under 40 hours on average, but work over 40 hours during the business’ set peak periods.
Overtime
Overtime pay is paid in accordance with labour laws. (In principle, prior approval from superiors is required.)
- Up to 60 hours per month: 125%
- More than 60 hours per month: 150%
- Beyond regular hours: 100% (only within legal hours)
- Holidays: 135% for statutory holidays, 125% for non-statutory holidays
- Late night: 25%
Employers must adhere to these regulations and compensate employees accordingly for overtime work. Do note, however, that employees in managerial positions are not entitled to overtime.
Visa and Work Permits
Non-Japanese nationals require appropriate visas and work permits to work legally in Japan. Employers should familiarise themselves with the various visa categories and sponsorships available for foreign employees. However, if the foreign national is working remotely outside of Japan, they are not required to obtain a working visa.
Japan’s work permits and visas are categorised as follows:
Highly Skilled Professional Visa:
- Highly Skilled Professional: Individuals recognized as “highly-skilled human resources” meeting specific criteria.
- Special Highly Skilled Professional: Foreign professionals with a designated level of education, work experience, and income.
- Dependents of Highly Skilled Professionals.
Working Visa:
- Available for various professions including professors, artists, religious workers, journalists, business managers, legal/accounting professionals, medical practitioners, researchers, instructors, engineers/specialists in humanities/international services, intra-company transferees, nursing caregivers, entertainers, skilled labourers, specified skilled workers, and technical intern trainees.
Start-Up Visa:
- Granted to entrepreneurs supported by Japanese municipalities, as well as their spouses or children.
Taxes and Social Insurance
In Japan, employers are required to deduct income tax from their employees’ pay, with the rate contingent upon the employee’s income. Additionally, employers withhold a segment of employees’ salaries for contributions to Shakai Hoken, or social security. Employees also need to pay juminzei, or the resident tax.
Employers are required to enrol employees in social insurance programs, including health insurance, pension, and unemployment insurance. The premiums for health insurance depend per prefecture, but standard premiums are 18.3% for pension and 0.006% for unemployment insurance.
Read more: Japan Health Insurance: A Guide for Expats and Business Owners
Probationary Period
There are no statutory requirements for probationary periods for new employees. However, a period of three to six months is customary.
Bonuses and Allowances
Bonuses are special allowances received separately from the monthly salary. Employers typically establish evaluation periods to assess employees’ work attitudes and performance, and bonuses are granted accordingly. While this varies by company, bonuses are often paid twice a year, usually in the summer and winter. Depending on the company, bonuses typically range from one to two and a half months’ salary on average. Employees in companies receive these bonuses, which help maintain their motivation to work.
Some companies also provide transportation and even housing allowances for their employees, though these are not statutory requirements.
Work Leaves
There are a number of paid leaves available for workers. This includes the annual paid leave, maternity and paternity leaves, and special leaves such as the bereavement and nursing care leaves.
Read more: The Different Work Leaves in Japan
Recruitment and Hiring Process
Job Advertisements
Advertise job openings through local job boards, recruitment agencies, and online platforms popular in Japan. Craft job descriptions that resonate with Japanese candidates and emphasise desirable qualities such as teamwork and dedication.
Interview Process
Conduct interviews in a structured and respectful manner, focusing on assessing candidates’ qualifications, skills, and cultural fit. Be prepared for behavioural questions and expect candidates to ask questions about company culture and values.
Background Checks
Conduct background checks, including verifying educational credentials and employment history, to ensure the integrity of potential hires.
Offer and Negotiation
Present job offers clearly and professionally, including details such as salary, benefits, and employment terms. Be prepared to negotiate with candidates but maintain transparency and fairness throughout the process.
Onboarding and Integration
Orientation
Provide comprehensive onboarding and orientation programs to help new hires acclimate to the company culture, policies, and work environment.
Training and Development
Invest in ongoing training and development initiatives to support employee growth and skill enhancement.
Mentorship and Support
Assign mentors or senior colleagues to guide new hires and provide support during the integration process.
Feedback and Communication
Encourage open communication and feedback channels to address any concerns or challenges that may arise during the onboarding process.
Utilising an Employer of Record Service Provider When Hiring in Japan
For companies new to the Japanese market, or those looking to expand quickly without the complexities of establishing a subsidiary, an Employer of Record (EOR) service provider can offer a strategic solution.
How an EOR Works
An EOR helps companies with payroll, benefits, and legal compliance for their employees in Japan. By serving as the legal employer, the EOR takes on the administrative burdens, allowing businesses to focus on their operations.
Benefits of Partnering with an EOR
Partnering with an EOR like Eos Global Expansion simplifies the hiring process, accelerates time to market, and ensures immediate compliance with Japanese labour laws. It also provides a level of flexibility, especially for short-term or project-based staffing needs. This makes hiring in Japan as pain-free as possible.
Conclusion: How to Make Hiring in Japan Work For You
By understanding cultural norms, navigating legal requirements, and following best practices in recruitment and onboarding, businesses can effectively hire and integrate employees in Japan while fostering a positive and productive work environment. Investing time and resources in understanding the nuances of hiring in Japan can lead to successful long-term partnerships and business growth in the Japanese market.
Eos has over 15 years of experience serving the Japanese market. Check our services here or contact us directly.
Featured photo by Cory Schadt on Unsplash
