JAPAN’S IT CONTRACTING MARKET MAKES AN IMPORTANT USE CASE IN TIMES OF CRISIS

Statistics show that 56 per cent of organisations in Japan offered home office/remote work options for employees in June 2020, as compared to only 18 per cent who had these in place when the outbreak first hit in March. This remarkable ramp up in just a few months has been a result of massive IT projects that have been implemented across industries as companies raced to accommodate movement limitations and physical distancing. Supporting this surge in IT demand amidst an ongoing talent crunch in the sector is Japan’s IT contracting market – a pool of resources that is proving to be increasingly invaluable for companies trying to maintain productivity while conquering uncertainty and headcount freezes.

IT infrastructure sector leads hiring demand

These are some of the findings from The Inside Story of Japan, a monthly regional recruitment analysis undertaken by global recruitment expert Hays. Focusing on the IT contracting sector, the analysis found that owing to the current market, IT contracting talent focused on infrastructure-related functions like servers, networks and service desks are currently most in demand, alongside project managers and IT consultants.

Sound technical knowledge is a must for such roles, alongside excellent soft skills. Japan is known for its hospitality and high levels of service; candidates in customer facing roles must thus have the communication skills to deal with difficult conversations or customers and be able to do so in stressful or pressured circumstances

Contracting an increasingly popular choice for Japanese professionals

Interestingly, contracting is also becoming an increasingly popular option within the workforce, owing to the flexibility and access such roles often offer. This includes freelancers who deal exclusively with contracting roles, homemakers who need time for their family, and experienced workers over 60 years of age. Contractors are also well compensated for their overtime hours, with rules and compensation for overtime hours being clearly defined. Younger Japanese professionals are also exploring freelancing and are less interested in the previously coveted ‘lifetime employment’ approach. This marks a significant shift in mindset and a step forward in Japan’s journey to becoming a mature market for contracting or temporary workers.

Organisations seek quick fixes over long-term solutions

The ongoing IT talent crunch has made the market extremely competitive. Moreover, the hiring of contract or temporary workers in Japan operates under strict labour and dispatch laws to protect employee rights, such as the recently implemented ‘Improvement of Employment Management for Part-Time and Fixed-Term Workers’ Act. This, along with the ongoing global economic uncertainty, has led many organisations in Japan to source for quick and cheap talent solutions to fill the gap.

However, experts say that hiring a wrong fit can cost a company dearly in times of timelines and performance. Additionally, lower paid candidates are more likely to be on the lookout for better paid opportunities, which could result in them even leaving a project mid-way. In contrast, a well-qualified and well-compensated candidate is more likely to not only complete a project but deliver better results

Richard Eardley, Managing Director of Hays Japan commented, “The IT hiring market in Japan is poised to see an increase in project-based hiring over operational hiring as more companies invest in technological advancement. Contracting will also continue to be popular among young Japanese professionals who are looking beyond traditional employment models, alongside homemakers and senior citizens who want to continue working. Organisations looking to recruit top talent in this market would benefit from reassessing their value proposition and if it will appeal to the growing pool of skilled contractors in Japan. Most candidates are looking for an opportunity to work for an interesting project that gives them the exposure to leading or cutting-edge technologies and will thus be drawn to organisations who offer opportunities for learning and upgrading their skill sets.”

To read the full Inside Story of IT Contracting in Japan, please click here.