Japan workers are shifting from lifetime employment, Linkedin says

LINKEDIN Japan’s first female country head argues that the nation needs to move toward a more skillsbased labor market, and firms need to adapt to workers’ changing values if the country is going to improve its persistent gender inequality.

“Japan is at a turning point,” Wakana Tanaka said in her first media interview this week since she took over the top job in late March. “Building your skills constantly is really important in this coming age.”

Amid a backdrop of increasing government spending in this area, Tanaka said that Japan’s labor market is already shifting toward focusing on individual skills rather than lifetime employment, and the shift has the potential to be positive for women. Linkedin is providing various online courses including those partly powered by artificial intelligence to help workers adapt to the changing environment, she said.

The world’s third-largest economy has traditionally had an employment system that ties workers to one company for life and incentivizes employees to focus on corporate loyalty and not taking too much risk.

It has also grappled with persistent gender inequality as men were expected to take those stable jobs while women take lower paid part-time jobs and shoulder the bulk of childcare and household tasks. Japan continues to have the largest gender pay gap among Group of Seven nations.

“Female participation in the labor force is large, but many are still doing temporary jobs,” Tanaka said, adding that a shift to job-based hiring should allow more opportunities for diversity and an increase in wages for women. “My personal mission is to work toward elevating women’s status in Japan and in Asia,” she said.

Firms also need to adapt to changing attitudes among workers who value family life and flexibility more than they did in the past, Tanaka added.

“There’s no longer a one-size fits all policy for workplaces,” said Tanaka, who is also a mother of two. “We just did a research last month on Japanese people, and compared to 20 years ago, across the generations people value families the most important, not work. 20 years ago it used to be work.”

The new head of Linkedin Japan is also the first woman and the first person under the age of 60 to be Harvard Business School Club of Japan’s president. Her career background so far include consulting at Arthur D. Little, digital marketing at Google, and serving on a parliamentary commission looking into the Fukushima nuclear disaster.

Educated at Harvard and Georgetown University, Tanaka feels that her diverse career path and the varied skills she acquired along the way have helped her land her current job leading Linkedin Japan.

That focus on skill sets over lifetime employment is something the government has also been pushing. This year Japan set aside a budget of ¥1 trillion ($7.3 billion) over five years for what it calls “reskilling”— encouraging employees to learn new skills to potentially switch to higher-paying jobs.

The lack of wage growth is something the government has been trying to address, as the central bank looks to achieve sustainable inflation backed by pay gains and growth. But Japan’s persistent gender pay gap, which measures the difference in wages between the sexes, has also contributed to keeping wage growth low. Women also remain rare in the upper ranks of corporate Japan. Less than 13 percent of executives at publicly traded companies are women, according to Jpmorgan Securities Japan Co. The number ranks the lowest among the G-7 nations, and compares with 45.3 percent of female executives in France and 29.7 percent in the US.

Still, Tanaka says that has been slowly changing compared to when she first entered the labor market in the late 1990s. These days she’s part of a group of female leaders in Japan that meet informally to support each other and share information, she said. Members include former vice chair of Goldman Sachs Japan Kathy Matsui, ex head of the OECD’S Tokyo Centre Yumiko Murakami, and Microsoft Japan’s new president Miki Tsusaka.

Back when she started her working life as a consultant, Tanaka remembers feeling uncomfortable as clients tended to view her as a woman, rather than a professional. Acquiring skills have helped her gain confidence, and Tanaka encourages more Japanese firms to value workers’ skill sets.

“I have a daughter myself, so when she becomes an adult, I really want Japanese society to be better,” she said.