Ja­pan’s car­mak­ers grap­ple with salaries

The Denver Post - - BUSINESS - By Bloomberg News

Head­hunter Casey Abel spent four months try­ing to hire a data-cen­ter ar­chi­tect for a Ja­panese au­tomaker, in­clud­ing five meet­ings with the client — one with the top ex­ec­u­tive. In the end, the IT spe­cial­ist joined an e-com­merce com­pany abroad for sig­nif­i­cantly more money.

“There’s just a mas­sive mis­match in salaries,” said Abel, man­ag­ing di­rec­tor at re­cruiter HCCR K.K., who has spent as long as a year try­ing to land some IT can­di­dates. “You’ve got some en­gi­neers mak­ing 20 mil­lion yen ($170,000) a year. Then you try to fit them in the tra­di­tional man­u­fac­turer-based salary struc­ture where it should be 7 mil­lion to 9 mil­lion yen.”

At­tract­ing the best in­for­ma­tion tech­nol­o­gists is be­com­ing in­creas­ingly im­por­tant for Toy­ota, Honda and Nis­san as they seek a big­ger share of rev­enue from IT­driven ser­vices such as ride-shar­ing and cloud­based mon­i­tor­ing of ve­hi­cles. Nis­san CEO Car­los Ghosn has said Ja­panese car­mak­ers can’t af­ford to lose the “global war for tal­ent” to new ri­vals like Uber Tech­nolo­gies and Tesla Mo­tors.

Lur­ing such tal­ent re­quires big pay bumps in Ja­pan be­cause the com­pa­nies are chas­ing the same ex­perts that banks, tech com­pa­nies and ev­ery­one else needs, said Abel. The au­tomak­ers “op­er­ate within ex­tremely strict bud­gets and the busi­ness is gen­er­ally low mar­gin.” Ja­panese com­pa­nies suf­fer from a dearth of do­mes­tic tal­ent and the per­cep­tion their busi­ness is more “ma­ture and slow mov­ing” than the new wave of tech star­tups.

Honda said it will adopt a more flex­i­ble salary pol­icy at its new Tokyo lab, while Nis­san de­clined to com­ment specif­i­cally on pay at its new Tokyo data of­fice. Toy­ota lo­cated its so-called con­nected-car busi­ness unit and AI re­search cen­ter in the U.S., which a spokesman said of­fer com­pet­i­tive com­pen­sa­tion.

Ja­pan has had the most se­vere tal­ent short­ages in the world since 2010, with IT pro­fes­sion­als among the top three hard­est po­si­tions to fill, ac­cord­ing to Man­power Group’s an­nual mar­ket sur­vey. The coun­try is short of an es­ti­mated 171,000 IT staff in 2016 and the num­ber may more than quadru­ple to 789,000 by 2030, ac­cord­ing to a sur­vey by the Min­istry of Econ­omy, Trade and In­dus­try, or METI.

That race for staff is ac­cel­er­at­ing. Nis­san said in Oc­to­ber it plans to hire about 150 en­gi­neers in Tokyo by 2018 for soft­ware, cloud com­put­ing, data an­a­lyt­ics and ma­chine learn­ing. Honda starts op­er­a­tion next year of a Tokyo re­search cen­ter mainly for ar­ti­fi­cial in­tel­li­gence and IT. Volk­swa­gen AG said this week it will hire more than 1,000 IT ex­perts, tap­ping high-tech­nol­ogy sec­tors, gam­ing in­dus­try and toplevel re­search cen­ters, in the next three years.

Toy­ota last month an­nounced its con­nected-car strat­egy, which in­cludes build­ing a big data cen­ter to cre­ate new busi­ness us­ing driv­ers’ data such as tai­lor­ing in­sur­ance poli­cies to driv­ers’ habits, and hired for­mer U.S. de­fense sci­en­tist Gill Pratt to set up and lead an AI re­search in­sti­tute in the U.S.

“You need re­ally good tal­ents to do those re­ally com­pli­cated things,” said Jeremy Carl­son, an an­a­lyst of au­ton­o­mous driv­ing at IHS Markit. “Ja­pan has an ed­u­cated and in­tel­li­gent pop­u­la­tion, but many highly mo­ti­vated and ca­pa­ble in­di­vid­u­als in these fields flock to ar­eas like Sil­i­con Val­ley.”

Ja­pan came last in METI’s sur­vey in terms of the pro­por­tion of re­spon­dents who thought IT was an in­ter­est­ing area to work, while In­done­sia, India and the U.S. ranked high­est.

The Ja­panese cor­po­ra­tions are fol­low­ing the lead of U.S. ri­vals Ford Mo­tor Co. and Gen­eral Mo­tors Co. Ford es­tab­lished a sci­ence lab in Sil­i­con Val­ley in 2012 to de­velop soft­ware, while GM has built two data cen­ters since 2013 to stream­line prod­uct de­vel­op­ment, man­u­fac­tur­ing, mar­ket­ing, sales as well as con­nec­tiv­ity ser­vices.

Honda is try­ing to ad­dress the salary is­sue by adopt­ing a more flex­i­ble work and pay sys­tem at its new Tokyo lab, rather than the rigid, se­nior­ity-based pay grades used else­where within the com­pany, said Yoshiyuki Mat­sumoto, pres­i­dent of Honda’s re­search arm, which op­er­ates largely au­tonomously.

With the in­tense com­pe­ti­tion for staff in Ja­pan, Toy­ota in April set up its Toy­ota Con­nected Inc. data unit in Plano, Texas. The di­vi­sion works with Mi­crosoft Inc. to de­velop data man­age­ment and ser­vices for its op­er­a­tions world­wide, in­clud­ing sys­tems for con­nected cars that help make it eas­ier for peo­ple to use au­to­mo­tive tech­nol­ogy.

Then there’s the prob­lem of at­ten­tion span.

The de­vel­op­ment cy­cle for a car usu­ally last years, which can be frus­trat­ing for pro­gram­mers used to build­ing a sys­tem in weeks, said Man­dali Khalesi, Asia-Pa­cific chief of Nether­lands-based dig­i­tal map-maker HERE, owned by Ger­man au­tomak­ers Audi, BMW and Daim­ler. “These peo­ple are from com­plete IT back­grounds and they don’t ex­pect these long­time cy­cles,” he said in an in­ter­view in Tokyo.

Nis­san de­cided to try to turn that to its ad­van­tage. It’s build­ing the 150-per­son con­nec­tiv­ity di­vi­sion in Tokyo, partly in the be­lief that the long-serv­ing work attitude is Ja­pan’s edge over Sil­i­con Val­ley, ac­cord­ing to Ogi Redzic, head of the unit. About half the IT pro­fes­sion­als in Ja­pan have never changed jobs, com­pared with 14 per­cent in the U.S. and 21 per­cent in China, ac­cord­ing to the METI sur­vey.

“We can­not af­ford to have peo­ple that only come here for a year or two,” said Redzic, a for­mer ex­ec­u­tive of HERE, who joined Nis­san and al­liance part­ner Re­nault SA this year to head the group’s IT ser­vice for con­nected cars.

“The way that peo­ple are go­ing to get re­mu­ner­ated is go­ing to be tied to the type of work that they do,” said Redzic, de­clin­ing to give de­tails. “We fully get it that if you want to build data-an­a­lyt­ics themes there are cer­tain mar­ket con­di­tions around what those peo­ple ex­pect.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.