The role of the recruiting industry is to provide services that function as a bridge between demand and supply in the labor market, enabling information exchange among the parties involved. Diversified needs in the labor market created a complex industry that provides a multitude of services. In international comparison, Japan’s recruiting industry is one of the largest in the world. It is a multi-trillion Japanese yen industry that has shown substantial market growth in the past several years.
The recruiting industry in Japan is comprised of four segments, which include dispatching, outsourcing, recruitment advertisement, and services by public or private placement agencies. Each of these segments contribute in their own way to a better-saturated labor market, servicing employers or employees. Dispatching involves a triangular relationship between the dispatching company, the dispatched personnel, and the hiring company. Outsourcing refers to business processes and services that are bought from other companies. Recruitment advertisements offer (virtual) meeting places for employers and job seekers, while private placement agencies seek to find talent that fits job requirements by micro-managing the application process, among other services. Every year the industry places millions of people in the Japanese labor market.
Working conditions of dispatch workers
Working at a dispatching company is classified as irregular employment in Japan. In general, regular employment is considered to be desirable because it entails various benefits to employees, such as a comprehensive insurance system. On the downside, regular employees are often expected to “contribute” to the company by agreeing to overtime work or transfers to other branches.
Employees opting for the services of dispatch companies circumvent the hassle of navigating through the job market, while often benefitting from flexible contracts. On paper, most contracts signed with dispatching companies involve less than eight hours of work per day and entail none or relatively little overtime work per week. Drawbacks of signing with dispatching agencies include relatively low wages, and a prevalence to frequently change the workplaces, as most employees work in fixed-term contracts that are no more than three months in length. In Japan, the majority of dispatched personnel work in the finance and insurance, manufacturing, or telecommunications industry.
Fresh talent acquisition
Japan has a unique labor market. This is manifested, to offer an example, in the new graduate talent acquisition environment in which fresh talent is scouted and pre-emptively secured directly from universities. Informally called shushoku katsudo, fresh talent acquisition developed into a lucrative business that has a considerable market size. The industry segment operates as an information exchange platform and mediator between employers and prospective employees. The aim is to provide services that enable finding a good fit for all parties involved. The system contributes to a high employment rate of the newly graduated, as a substantial share of students find themselves with a regular employee position at graduation or shortly thereafter.
While there are benefits to the system, critiques point out that there is a conflict between overzealous industry entities who seek to quickly secure strategic resources (acquisition of capable personnel), and the interests of educational institutions whose aim is to provide adequate education and broaden student’s views. The services offered to students by the recruiting industry are useful tools if one aspires to secure a regular job at or shortly after graduation, but it also creates an environment of conformity in which those who miss the signal at the starting line find themselves in danger of being left behind.
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