[Feature: Rethinking Japanese "Work Styles"] Roundtable Discussion: What is the Future of Diverse Work Styles and Changes in Employment Forms?

Today, I would like to discuss the topic of "Rethinking 'Work-Styles' in Japan" with all of you.

Since around the mid-2010s, "Work-Style Reform" has become a major topic. At the same time, as a centerpiece policy of the Abe administration, the promotion of women's participation was discussed within the framework of the so-called "Dynamic Engagement of All Citizens." Various policies were launched with the aim of realizing a society where diverse work-styles can be chosen in response to the decline in the working-age population due to the declining birthrate and aging population. I believe it was an important challenge for both practitioners and researchers to determine how to respond to these changes.

Various policies were introduced, such as overtime regulations, the high-level professional system, the work-interval system, and the prohibition of unreasonable disparities in treatment between regular and non-regular employees. Furthermore, following the COVID-19 pandemic, the work-style of remote work from home emerged.

I believe that practitioners have always thought about how to link this series of work-style reforms to corporate management and turn them into a positive, rather than passively thinking, "We'll do it because the government told us to."

First, Mr. Noma, how have you, as an HR practitioner, perceived work-style reform?

I am currently in a department called the Management Oversight Division, where I promote well-being, but I was in the HR department until December 2021. When work-style reform was first discussed, I was involved in the very task of creating systems and ensuring they took root among employees.

Our company is a wholesaler of food and alcoholic beverages—essentially a food infrastructure industry. Founded in 1712, we marked our 310th anniversary in 2022. We have a history that began when Ise merchants from Matsusaka, Mie, went to Edo to start a soy sauce brewing business, and then transitioned to wholesaling with the collapse of the shogunate system. While we are by no means a representative Japanese company, I think it could be said that we were a company that symbolized "The Japanese Employment System."

When I joined the company, like many Japanese companies at the time, it was a male-dominated society with strong family-like relationships, and long working hours were the norm. Facing work-style reform and trying to change this way of working, which was predicated on long hours, was truly a struggle. However, I believe it was very significant that we were somehow able to break away from that.

It was difficult to get employees to actually "be conscious of productivity." We were pushed back by the front lines, who said, "Even if you say that, how are we supposed to do it?" While enlisting the wisdom of the systems department and younger people, we introduced RPA (Robotic Process Automation) and AI, and through repeated trial and error, we improved efficiency by streamlining some operations in certain cases.

It also served as an opportunity to review our existing HR systems. Ultimately, a work-style predicated on long hours was a male-dominated one, and the seniority system remained. We faced this head-on and also addressed issues such as female transfers, gradually embracing diversity and conducting fundamental reforms of the HR system to create a mechanism that improves productivity.

Through these efforts, I believe we have become able to face health and leisure positively. Until then, there was a lack of awareness that long working hours lead to health problems, and I feel there was an implicit, mistaken perception that mental health issues were a sign of a weak mind.

In this work-style reform, the government sent a message regarding health improvements from the perspective of correcting long working hours. Therefore, we were able to implement health improvement initiatives within the framework of legal regulations and significantly advance the reform of employee consciousness.

A culture has been fostered that moves away from the previous way of working—where one climbed the ladder by sacrificing their personal life—to one that accepts diversity and considers those who have time constraints due to gender differences or life events and cannot work intensely. While it is by no means perfect, I believe that is the positive aspect of the work-style reform we have faced.

I see. Now, Mr. Takahashi, you work for the foreign-affiliated Novartis Pharma and are currently in Portugal. What is the work-style like in Europe?

Currently, I am the head of HR at the Portuguese base of Novartis Pharma, a Swiss pharmaceutical company. As Novartis expands globally, how to adapt work-styles to the culture and actual situation of each country is a very important theme for HR.

For pharmaceutical companies, the core of the business is how many new drug pipelines can be produced. In other words, it's about how much innovation can be generated, and the most important issue is what kind of work-style will allow us to continue generating innovation at all times.

Our company has a completely job-based HR system. In other words, if that job disappears, the position disappears, and losing the position immediately leads to loss of employment.

In Europe and the U.S., personnel reductions are currently progressing in many industries, not just the pharmaceutical industry, so we must do more productive work with fewer people. Also, since almost everything became remote work during the pandemic, working with high productivity in such an environment has become the point of work-style reform.

Three years ago, Novartis issued a policy granting 24-hour full flexibility. We allowed people to work from anywhere, at any time, in the way they desired. However, because we changed direction so suddenly, a backlash is occurring now.

Therefore, a new internal policy was issued worldwide starting in 2023. For sales employees, it says they should spend most of their time in the sales field and meet customers in person as much as possible. For head office staff, it says they should work in person at the office at least three times a week and at least 12 days a month.

How employees perceive this will be a major point going forward. There is resistance, with people asking why they have to be restricted like that again after being granted full flexibility. Especially in terms of retaining top talent, I am worried about whether they will leave for other companies that still allow full flexibility.

Overseas, the competition for talent in the mid-career recruitment market is extremely intense. It's not just through agents; if you register on SNS like LinkedIn, other companies will contact you directly, and changing jobs that way is very common. In that environment, in order to gain "employability" for themselves, there is a very active movement of people getting Master's degrees or Ph.D.s at graduate schools while working. Companies also view getting a degree while working very positively.

In such an environment, unless we move in a direction where we allow flexibility in working hours and evaluate work based on how much impact (final result) was produced, regardless of the process, we will not be able to acquire top talent.

Furthermore, there are many countries and departments where the proportion of female employees exceeds 50%. We are in an environment where providing flexibility is essential for employees who aim to realize life-work integration flexibly while helping each other with childbirth, childcare, nursing care, and housework within the family.

On the other hand, I feel that Japanese employees' awareness of how to think about their own careers is not as high as that of those in Europe and the U.S. In Japan, regulations have loosened and side jobs have become okay, so I hope people will think about their careers autonomously and become positive about new learning and side jobs, but it seems it will take time before the effects appear.

That was a very interesting story. Now, Mr. Moriyasu. Mr. Noma mentioned that diversity leads to productivity. Given your work involving economic insights and social, industrial, and labor policies, how do you perceive these points now?

Mr. Noma mentioned his company's roots are with Ise merchants, but I am from Shiga Prefecture, known for the Omi merchants (laughs). Drawing on the Omi merchants' "Sampo-yoshi" (Three-way satisfaction), I think work-style reform can also be viewed from three perspectives: good for the company, good for the employees, and good for society.

Compared to a decade ago, I feel there are more instances where executives talk about HR issues as part of their management strategy, or where they are requested by society or financial markets to address HR issues, as is evident in recent human rights and human capital disclosures. I believe we are entering an era where executives place HR issues as a more important management theme than ever before. In other words, I think work-style reform is becoming something done not only from the perspective of "good for the employee," but also from the perspectives of "good for the company" and "good for society (good for the market)."

In the past, it was an era where things sold if you made them, but now we have to stimulate demand. And coupled with digitalization and globalization, we are in a management environment where game changes occur overnight. Furthermore, competitors are entering from across industries. The financial industry is no exception, placed in an environment where IT and other industries are entering.

In that case, the system of hiring new graduates, training them over a dozen years, and linking the company's own methods to productivity is no longer rational. Rather, it becomes important to incorporate external knowledge in accordance with game changes. It is necessary to pivot toward things like employees continuing to learn, incorporating diverse knowledge in diverse forms, and bringing in side jobs and freelancers to make innovative things happen. I believe that is why HR issues have come to be discussed within management.

In addition, there are demands from society and the market. A prominent example is the effort regarding human capital disclosure. Situations are occurring where the Finance Director, who didn't appear much in HR before, is talking about issues in the HR domain.

Furthermore, the establishment of new work-styles is being promoted in the government's growth strategy, and we can see that this trend is spreading to small and medium-sized enterprises in regional areas. There is a movement among regional business owners to review HR systems and work-styles, such as trying mid-career recruitment or bringing in talent who have side jobs. While they used to work on work-style reform driven by turnover prevention or labor shortages, we are seeing more cases of them working on it from a strategic management perspective.

I believe that the scope of this work-style reform—especially the fact that executives are handling HR issues—is spreading from large corporations to SMEs, and from cities to regional areas.

Ms. Sakazume, you specialize in organizational behavior, which studies the relationship between employees and organizations within a company, and the relationship between supervisors and subordinates, from a slightly more micro perspective than economics. From that viewpoint, how have you seen the movement of work-style reform?

I recall that the discussion on work-style reform in Japan began around 2014. What was viewed as problematic at the time were situations such as the prevalence of long working hours and the difficulty for a diverse workforce to be active.

For example, even if a woman who gave birth wanted to continue working, long hours were prevalent in the workplace, and she couldn't adapt to that work-style. On the other hand, if she switched to short-time work, there were many stories of her being treated as if she were invisible. While long working hours that damage health are out of the question, the situation of trying to change workplaces where only people who can work in a specific way can succeed, and reviewing labor hours for that purpose, has led to work-style reform.

What work-style reform aimed for was a transformation of the desired employee image—where an employee who can work overtime anytime and as much as they want is not the "ideal," but rather, even if their working hours are short, if they produce the expected results, they are an important talent for that company.

Actually, there are quite a few people besides those in childcare who are seeking a balance. This includes nursing care, and as the average age of the workplace rises, balancing work with one's own illness, or people going to graduate school to study. It is important to create a place where these people, who cannot devote 100% to work, can also be fully active.

With the spread of remote work due to the expansion of COVID-19, it has become clear that there are actually other options for work-styles that we had taken for granted. I believe work-style reform had a great meaning in that it became an opportunity to think about work-styles so that employees can demonstrate their abilities.

However, the management side, based on work-style reform, is in the midst of transformation, and if we look only at the current situation, I think they are confused. Managers are trying to manage subordinates who each have different situations, while wondering how everyone can come together toward workplace goals and how to develop subordinates while overtime is restricted. I think the last two to three years have been a period of trial and error in a situation where there is no correct answer in their past experience. For managers, I think the time of trial continues.

Also, since the term "career autonomy" is finally starting to be accompanied by a sense of reality within work-style reform, I think it is also significant that a momentum to think about autonomy on the working side has been created.

Thank you all very much. I would like to ask two questions. To confirm with Mr. Noma, at first glance, it might seem that diversity and productivity are a trade-off. How does your company think about that? I think this is exactly the discussion of Diversity & Inclusion, but there are parts that I don't quite fully grasp yet.

I think there are various ways to perceive diversity. Until now, I think we often thought about business with the same male values. As Ms. Sakazume mentioned earlier, it is certainly true that opportunities to succeed have begun to emerge for people who gave birth and returned to work, and who are talented but were not blessed with job opportunities because they could only work short hours.

Also, our company introduced a group company system through a group organizational restructuring in 2016. While group policies were previously mainly conceived at the head office in Nihonbashi, since the restructuring, the wisdom of employees who are active in various regional companies and cannot relocate has also come to be utilized in strategies.

I see. One more thing, Mr. Takahashi mentioned earlier that the online environment during the pandemic was shifted back slightly from "anytime is OK." There are various evaluations regarding online work-styles, aren't there?

For example, in Japan, while there are benefits such as being able to escape the hell of commuting or being able to concentrate on work, on the other hand, because monitoring is not possible at home, there is also the problem of what economics calls shirking. When considering productivity as corporate management in total, how do you evaluate this online work?

It is generally said that for pharmaceutical companies, it takes about 10 years from the initial research and development to the launch of a new drug. In that 10-year process, how many departments can cooperate to generate innovation? Since that directly links to performance, I think the management side is always worried that that part might be lacking.

In terms of diversity, we are making efforts to place employees with different backgrounds, such as nationality, into jobs related to innovation as much as possible. Innovation is born when those people actually have dialogues and discuss from different perspectives.

Unless we provide many such opportunities within the 10-year process, it will affect performance. There is a concern that it is difficult for that to happen if it is remote.

While recognizing flexibility, we believe that the major reason for this change in policy is that we must create an environment worldwide where people come to the office at least 50% of the time to exchange opinions in person and incorporate opinions that are different from the conventional ones.

Especially for sales positions, it is important to grasp the seeds of innovation from continuous face-to-face dialogue with customers and feed that back to the business side, leading to hints for new drugs or innovation in new ways of selling.

Next, I would like to move on to the changes in employment types, which is one aspect of work-style reform. I think there are various challenges, but I would especially like to ask about the feasibility of what is called job-based employment.

Conventionally, the membership-type system, where new graduates are hired and developed internally, was the greatest common denominator of HR management for Japanese companies. There was also a mention that in an environment where game-changers appear in the market, we might not be able to survive international competition with only new graduate recruitment and internal development.

With such environmental changes, this talk of job-based employment is also emerging. Can the conventional methods of Japanese companies, such as new graduate recruitment, pay raises, promotions, and reassignments, actually be compatible with this job-based employment?

As a premise, I think the perception of job-based employment varies considerably from person to person. For example, a certain general trading company says it has introduced job-based employment, but in reality, it should be called job-category-specific recruitment. In order to eliminate the so-called "assignment lottery" at the time of new graduate recruitment, they call job-category-specific recruitment—where a person can choose the job category they selected for the first few years—"job-based." Or, some places call internal job posting "job-based," and others seem to call job-based pay "job-based."

Probably, pure job-based employment is, as Mr. Takahashi mentioned earlier, one where the loss of a duty—that is, the job being destructed—simultaneously means the employment is destructed. I think this is the job-based employment that is the common language in countries other than Japan, but it seems that is not necessarily the case in Japan.

At the same time, I think there are also good points to the conventional membership-type system. What are your thoughts on that?

Our company is almost a typical membership-type, where people map out their careers within the company from recruitment to retirement, and now including re-employment. Our HR philosophy is also "The company values its employees, and the employees grow the company," and we provide training on the premise of growing together in both directions.

Since our company has various business models to the extent that we are involved in everything related to handling food, we believe that even without changing jobs, there are various opportunities and one can develop a career while crossing job boundaries. Rather than the company unilaterally assigning people, there are parts where career formation is possible by changing jobs within the company based on the individual's wishes. I feel that being able to flexibly develop people within the company is a major advantage, and I feel that employees also have a great sense of empathy toward the company.

However, on the other hand, since there are parts where one can get a pay raise to a certain extent even without being very active within the company, I think employees also tend to become indifferent to the external environment. Also, due to rapid environmental changes, job categories that become unnecessary will emerge.

While there are jobs that disappear, there are also jobs for which demand increases, and what we are currently being forced to respond to urgently is DX talent. The salary systems for these in the market are skyrocketing, and if we try to hire them as regular employees of our company, they won't fit into the salary system and an imbalance occurs where they suddenly become management class.

Also, if we assign people starting from the job in a job-based manner, we are often told by the front lines that they want us to hire people with more specialized knowledge. If that is perceived as something like a temporary input of labor, as HR, we worry about whether that is really okay.

From the perspective of labor fulfillment as a company, it is good, but can they work while fully understanding the intent of the work, and will working at our company lead to career formation for that person? There is a discussion within HR about whether it is enough to simply respond to requests from the front lines. This is because our company believes that taking care of and raising people from society is also one of our missions, and we feel we must seriously work on forming careers within the company.

Also, in the membership-type, the time spent together is long, and I think that high level of homogeneity has both good and bad points. The fostering of a sense of unity is a very big advantage. For example, when logistics were about to collapse due to the pandemic or disasters, the whole company worked as one to solve the problem.

Conversely, I think there are parts where we become cautious and it takes time when accepting diversity.

I think the problem of transfers is one major challenge of the membership-type. It is said that this is one constraint in promoting women's participation. What are your thoughts?

Since food strongly reflects regional characteristics, in order to build a career, experiencing various regions becomes an advantage in terms of comprehensive management. Therefore, there is no option to completely stop the transfer system. For core talent, we want them to experience transfers and then create an autonomous career.

That said, there are people who cannot transfer due to life events or various family circumstances, so we have a course system where they can choose. We divided it into three courses: a course where they can go anywhere, including overseas; those who can transfer within a regional unit such as Hokkaido or Tohoku; and those who cannot transfer at all. We have them choose based on their own will.

However, whether one can transfer or not is different from whether one can do developmental and creative work, so from fiscal 2023, we will revise the course system to include that axis as well.

I see. Mr. Takahashi, in the case of foreign-affiliated companies, job-based employment is already established, and losing a job means losing employment. I imagine many people are constantly weighing whether it is better to stay at this company or change jobs when they receive an offer from another company, while looking at the ceiling of their own job within the company.

From the perspective of being managed based on job-based employment, or being currently employed in such an environment yourself, what do you think are the advantages and disadvantages?

I believe the advantages of job-based employment are the same in Japan and overseas. It is the ability to flexibly acquire necessary talent at the necessary timing within external equity. And I believe it is the point that exits can also be encouraged.

Now, as for what the disadvantages—or rather, the points of concern—are, the perspective changes slightly between Japan and Europe.

In Japan, there are two major points of concern. First, while mid-career recruitment becomes central, to what extent should we continue new graduate recruitment? Currently, Novartis in Japan continues new graduate recruitment. This is because we need to secure a certain amount of new graduates every year in order to create a talent pipeline for each generation.

Also, since we have the idea of wanting to develop potential talent as early as possible, in order to raise talent who have high potential in their 20s or early 30s and can take global leadership, new graduate recruitment that can secure talented people in their early 20s is indispensable.

In that case, although we do job-category-specific recruitment in a job-based manner, we cannot guarantee them work forever, so I am always worried about how many new graduates we should hire for which job categories.

The second point is the nature of development. I think Japanese companies have rank-based training from the senior level to assistant manager, manager, and director. Although we are job-based, we had such development in Japan, but we eliminated it as much as possible when we launched the corporate university. This is because training should be more free, based on what fits each job and what career goals are sought.

However, even so, there is always a need from the management side for solid rank-based development. Some people who join through mid-career recruitment also expect to be properly trained.

On the other hand, there are two major things I am concerned about with job-based employment in Europe.

One is that the cost of acquiring and retaining top talent is extremely high. Equal pay for equal work is the basis of the job, but truly talented people are constantly being headhunted by other companies offering 30% or 40% more in wages. As it stands, we cannot retain employees with equal pay for equal work alone.

The second point is that we define jobs with job descriptions, but environmental changes are so rapid that what is called "Jobs to be done" (JTBD) keeps becoming outdated in six months. Then, the rewriting of job descriptions can never keep up, and the difficulty of defining things by the job is emerging.

Therefore, unless we focus on what kind of impact is given to the company rather than the job that should be done, the concern arises that the nature of the job will not be able to keep up with changes in technology and the business environment.

The other day, someone said, "The problem with Japanese companies is Windows 2000." I thought they were talking about Microsoft's OS, but they weren't; they meant that in fine Japanese companies, there are people in "window-seat" positions (marginalized roles) who receive an annual income of 20 million yen, and they call that "Windows 2000" (laughs).

I think that is the biggest labor cost problem for Japanese companies, but for foreign-affiliated companies, there are completely different costs associated with retention, and the cost of hiring the next person when someone leaves, right?

Mr. Moriyasu, how are these job-based and membership-type systems perceived from the perspective of economics and social policy? For one, it is said that when it becomes job-based, labor mobility increases, or it becomes easier for companies to hire people from the outside and easier for employees to change jobs.

If the job-based model takes root, labor mobility will likely increase, as you mentioned. In a membership-based model, evaluations and grades are attached to the person, which is compatible with seniority-based systems and operations, ensuring sufficient wages as one gets older.

In contrast, in a job-based model, wages are attached to the post. Since people can see and compare better wages and conditions in the external labor market, there will be an incentive to move outward, leading to a trend of self-investment and changing jobs. Also, compared to the membership-based model where the number of posts can be adjusted flexibly, the job-based model has fixed posts, which I think makes situations where one is forced to change jobs more likely to occur.

My interest lies not only in labor mobility but also in who bears the cost of development. 'Development' here includes training, of course, but even more so, it includes work experience, feedback from supervisors, and dialogue.

In the membership-based model, the company bore the development costs. In a job-based model, that will no longer be the case. The aspect of individuals taking responsibility for their own careers becomes stronger. Earlier, in Mr. Takahashi's talk, there was an example of someone earning a graduate degree while working.

The problem is how to think about these self-investment and development costs for human resources who do not or cannot make such self-investments. I think this will become an issue when looking at society as a whole.

Professor Yoshio Higuchi often says that past employment practices were a 'relationship of security and constraint.' In other words, the company provides security to the employee, including livelihood security. In exchange, the employee follows and is constrained by the company regarding time, place, and work content. Under this relationship, I think there was an aspect where employees had their long-term careers guaranteed by the company.

Even without so-called career autonomy, as long as they performed their daily duties responsibly, their salaries would not drop, and even as seniors, the company would transfer them to some post. Of course, there was competition for promotion within the company, but in a sense, I think employees could safely leave themselves to the company and just focus on self-investment in an internal sense.

When this shifts from a 'relationship of security and constraint' to a 'relationship of choice and responsibility,' an aspect of individual self-responsibility emerges. Generally, the term 'career autonomy' carries a positive nuance, but it also has the aspect of individuals bearing the effort and responsibility for their careers. I think people will be divided into those who have career literacy, can keep up with career information, and can make decisions about their careers themselves, and those who cannot.

What will happen to people who cannot manage career autonomy well—for example, those who cannot get career information in the first place, those who cannot work on career autonomy due to various circumstances, or those who work too hard on the task in front of them to think about their long-term career—if Japan becomes a job-based society?

If the company doesn't provide security, will it be the government? However, the government's priority for supporting those who are not truly in dire need will inevitably drop. In that way, I think the question of who bears the burden of development will become a major theme.

Ms. Sakazume, the development and labor mobility you just mentioned are from a labor economics perspective, but in terms of organizational behavior theory, I think it is also a matter of the relationship and commitment between the company and the people working there.

A job-based company is not a world where, for example, the HR department will transfer you after a few years. Therefore, I think the relationship between supervisor and subordinate, or who has ownership of the career, will probably be questioned. What do you think?

I don't know to what extent or in what form the job-based model will permeate Japanese companies, but speaking of careers, the turnover of young people in their 20s and 30s has become a problem in Japanese companies over the past year or two. Moreover, I often hear that talented people are leaving.

Common reasons are: 'Will my career be okay staying at this company?' or 'Is the career I want to pursue on the extension of my current path?' There is a very high level of interest in whether one can grow at this company and become a person valued in the external labor market. On the other hand, I think the immediate challenge is that Japanese companies are not necessarily responding sufficiently to their questions and anxieties.

One significance of clearly stating job descriptions and making them visible within the company is that it can serve as a prescription for the questions and anxieties I just mentioned. Specifying the experience and skills required for a certain job clarifies the link between work and career, and enables the sharing of skills and experience that the person doing that job is expected to have. Furthermore, it leads to showing career possibilities, such as how this work experience can expand one's future internal career.

Showing the possibilities for a career five years from now within the company and indicating to employees what kind of strengths they should develop is very important as career autonomy, which assumes the reflection of the individual's intentions, progresses to varying degrees. I don't know if Japanese companies will adopt job-based employment, but in terms of showing the relevance between work and career, I think utilizing job-based thinking will become necessary from the perspective of career formation.

Since careers are formed through work experience in the workplace, the influence of managers on the career formation of subordinates is very large. The difficulty for current managers is the difference in thinking about careers between when they were young and now. Therefore, it is not surprising if there are managers who cannot well support career formation based on the premise of career autonomy. However, such skills are essential for future managers.

While subordinate management is becoming more complex, such as career formation support based on career autonomy, the job-based model has the potential to make subordinate management easier. A manager I interviewed recently said that while they took on everything during the membership-based era, they can now say, 'You are doing this part, but this part is lacking,' based on the job description. They mentioned that having an axis for judgment made subordinate management easier. The introduction of job descriptions might become one approach to subordinate management.

However, I think there could be more discussion on whether all workers should transition to career-autonomous career formation.

That is a very interesting story. I think the first time I received a baptism of what is being discussed as the job-based model was probably at a cafe in Paris. Even if I raised my hand to a waiter and said, 'Come to this table,' he would never come. When I asked, 'Why won't that person come?' I was told, 'That person is in charge of the tables over there and gets tips there, so if he comes to this table, he would be encroaching on someone else's territory. So, he will never come.'

Thinking about it that way, while clarifying descriptions in job-based employment has the merit of clarifying one's role, there could also be an argument that it might hinder collaboration.

When the job-based model permeates, I think the allocation of personnel across departments will become an issue. The gap between departments where it is easy to secure personnel and those where it is not will widen, but if the difficult-to-secure departments are also indispensable to the company, adjustments are necessary.

Collaboration will also become difficult from the perspective of increasing diversity in the workplace. However, even if adjustment costs increase, I think that ultimately, the collaboration important to the company will still take place.

I see, I understand. It seems to be a common understanding that while a membership-based society will not be replaced by a job-based one overnight in the near future in Japan, the membership-based model will not remain as it is, and the job-based model will steadily permeate sectors where it is needed by society.

Until now, careers in Japanese companies and foreign-affiliated companies were parallel worlds, and once someone quit a Japanese company to go to a foreign one, they rarely returned to a Japanese company, but I hear that has been increasing recently. There are cases where even large Japanese companies welcome people from foreign-affiliated companies as HR directors. However, in many cases, salaries drop significantly when changing jobs to a Japanese company.

So what they do is, similar to how TV stations headhunt anchors, they use fixed-term employment and pay high salaries. In other words, if they treat them within the membership-based framework, they can only pay salaries within that framework, so they make it fixed-term. Essentially, they turn jobs that are difficult to handle under the membership-based model into job-based ones and pay high salaries. It seems that a method of placing high-paying fixed-term positions outside the membership-based model, where renewal depends on results, has also been emerging recently.

Finally, I would like to ask for your outlook on future working styles in Japan. Regarding the theme of future labor market changes and the way Japanese people work, I am inevitably concerned about new graduate recruitment.

In Japan's case, whether or not to conduct new graduate recruitment is probably not just a problem for companies, but also for universities and the high schools that supply talent to universities. If new graduate recruitment were to disappear, it would be a major problem that would truly turn Japan upside down.

Furthermore, when the labor market becomes more fluid, as in Mr. Takahashi's talk earlier, retention costs increase. Since I don't think companies will just sit idly by, the recently emerged system of 'alumni' (re-employment of people who once quit) is also becoming realistic. Japanese companies are starting to have people who once 'graduated' from the company and have invested in their own human capital return. I think this is ultimately a matter of cost.

There are also issues such as recurrent education, reskilling, and working from home. Please speak from the perspective of future working styles for Japanese people, relating it to your own interests.

New graduate recruitment is necessary in our industry. Wholesale is not a business that owns factories; it's about creating business through connections with people, and it's not as if you can't succeed without having completed highly specialized studies. Therefore, encountering people who have the potential to apply their experiences from a fulfilling student life to their work is a very significant opportunity.

Also, listening to Mr. Takahashi earlier, I thought foreign-affiliated companies might be the same, but the talent pipeline is also important. In terms of continuously developing core human resources for the business, I think forming a population through new graduate recruitment is very useful.

Regarding reskilling, there are many cases even in the membership-based model where jobs disappear amidst rapid environmental changes. When that happens, we have to shift manpower, so the reskilling issue is happening right now within our company.

In many cases, middle-aged and older people are told, 'The way you did things in the past won't work anymore, so please change,' but even if they try to reskill in a way that doesn't connect with their previous career, the reality is quite difficult. Therefore, I think it's necessary to foster an awareness that one must always learn from an earlier stage, rather than reskilling only when that time comes.

I learned the word 'alumni' for the first time today, but such cases have existed in our company for a long time. Because they return after seeing the outside world, their engagement and performance are very high. It's a win-win for both the company and the employee, so I think there's no reason not to make effective use of it.

Also, I feel that the COVID-19 pandemic has further expanded the possibilities of working from home as an option. Flexible working styles like telework, flextime, and staggered shifts existed as means before, but the fact that we were forced to do so by the pandemic was significant. Because the world changed, it permeated further in our company and had a great effect. While meeting in person is important, I believe that by combining it well with working from home, we can expect it to lead to more value creation.

In the case of foreign-affiliated companies, it's a world where there are no constraints but also no security, and that is left to self-responsibility—I think it's a world at the exact opposite pole of constraint and security. While pursuing a career through so-called self-responsibility, how will future working styles evolve? Or, in comparison with foreign-affiliated companies, how should the working styles of Japanese people in Japanese companies evolve in the future? Mr. Takahashi, please share your thoughts.

I have hope for two possibilities.

First, whether it's a job-based or membership-based model, I hope for working styles that allow people to work for a long time with a good rhythm, taking into account the increased longevity of Japanese people. To that end, the ideal would be to continue for two or three 'waves' of working and relearning, interspersed with sabbaticals, so that those who want to work can do so even past the age of 70. On the other hand, if someone wants to wrap up their career in a company early, I hope for working styles where they can shorten the waves, retire early, and transition to a second or third career.

By companies viewing sabbaticals more flexibly, highly engaged employees can return after gaining new skills. In a job-based model, even if someone quits once, universities can accept adult students, and they can go on to work at another job-based company with new skills. I hope such things can be achieved between companies and the universities or development communities that provide education. I think that would suit long-lived Japanese people.

Second, I definitely want people to expand their careers overseas. I consider it my mission to develop global leadership so that Japanese and other Asian talent can be more active abroad. By leveraging the high quality of Japanese work, skill in collaboration, and the strength of being able to provide perspectives from a different culture in the West, working abroad greatly expands future working options.

Now that the functionality of translation AI has improved and remote work is being utilized, I think the environment for working in different cultures is better prepared than before.

I also hope it turns out that way. Actually, I am currently on a sabbatical myself, but it's quite rare in Japanese companies. Are sabbaticals common in overseas companies?

Yes, they exist. However, it's case-by-case and the duration varies depending on the purpose. They are also used for the retention of talented personnel, so not everyone can use them.

Is the salary paid?

There is no pay. However, only employment is guaranteed. Because guaranteeing employment affects headcount management, it can only be applied to a certain segment. I believe that in the future, we must allow it for a wider range of people, or career formation in a long-lived society will not be possible.

Now, Mr. Moriyasu, what are your thoughts on new graduate recruitment and the future of Japanese working styles?

There are various opinions on how companies should recruit new graduates. However, this system of hiring new graduates who have no particular expertise or work experience, letting them experience various things, and raising them to be somewhat independent has wonderful aspects from the perspective of social stability. I definitely want it to remain. If we were to become a completely job-based society, it is young people who would be disadvantaged. The high youth unemployment rate and the difficulty of career formation in Europe are prominent examples.

The problem in Japan is rather the formation of expertise after joining as a new graduate. People have commitment and loyalty, but they aren't very excited about their work. In other words, they aren't engaged. Because of that, innovative things don't emerge, and it's difficult to lead to the deepening of expertise. I recognize the new graduate recruitment system itself as a strength of Japanese society.

Earlier, I spoke about my concern regarding who bears the development cost and who nurtures the career. I think one answer to that is 'community.'

If you look at regional areas, movements to nurture careers within the region have already begun. For example, a certain mountain town in the Chugoku-Shikoku region. Multiple small and medium-sized enterprises (SMEs) have gathered to conduct joint training and job rotations. Employees who joined local companies as new graduates gain work experience by doing sales promotion at Company A, then moving to Company B, then Company C, and so on.

The reason I look at regional areas and SMEs when thinking about future employment is that SMEs sometimes have employment practices that are effectively job-based to begin with, and in regional areas, the loss of employment is already a daily reality.

Yugawara Town, where I live, is no exception. Partly due to the impact of COVID-19, there are situations where the future of companies and employment is in jeopardy. In the midst of this, they are working on a 'bright business closure' project as a whole community. I'll omit the details, but new needs and interesting jobs are being born there. Community-wide movements are creating attractive employment. Furthermore, the Kanto Bureau of Economy, Trade and Industry is currently working on an initiative titled 'Regional HR Department' to recruit and develop people and link them to innovation as a whole region, and I am also involved in that.

When you are involved in employment creation and talent matching in a region, you gain many insights. What I am particularly made to realize is the point of thinking about a career not for survival, but for becoming happy. When discussing job-based models and such, we tend to think about the former type of career, but that's not it. How to encounter work that makes oneself happy and enhances well-being. And how the region creates that. Actually, such efforts have begun in regional areas, and I think large metropolitan areas like Tokyo should learn from them instead. In metropolitan areas, it might be communities based on job types or universities rather than regions, but I think this kind of mutual aid for careers is necessary.

Finally, one point: there was talk earlier about alumni and going to outside organizations. I am also currently working at Mizuho while working two days a week at a research center at Keio. I had an unexpected harvest there. I was able to think, 'Actually, Mizuho is pretty good' (laughs). I previously read a newspaper article where an HR person from Kirin Holdings mentioned the effect of side jobs and dual employment as 'making the grass of one's own company look green.' I sympathize from the bottom of my heart.

With both side jobs and alumni, going outside can sometimes make the good points of one's own company visible for the first time, so if companies utilize these well, it might lead to employee retention.

In the sense that the person who experienced a side job can gain insights that make the grass of their own company look green, it might lead to benefits.

Now, finally, Ms. Sakazume, please.

As mentioned in everyone's stories, whether one works intensely or not, I think continuing to learn in some form is important for protecting one's own career. The difficulty is that while people who have already mastered how to learn can move forward with their own way of learning, not everyone is like that. Not a few people are at a loss when told, 'You need reskilling. Now, please learn something new.'

Discussions from work-style reform to career autonomy have expanded the possibility of reflecting individual needs, but on the other hand, there are parts where individuals cannot keep up with that flow. There are probably still many people who are bewildered when told to 'think about your own career.'

Although it contradicts career autonomy where one actively tries to carve out their own career, securing human resources who continue to learn is also important for companies. Therefore, I think it is necessary at this point for companies to take the lead to some extent in helping employees acquire learning methods and encouraging learning.

For example, even in companies that promote career autonomy, there are cases where an ambivalent situation occurs, such as not requiring autonomy in daily work and always making people work based on strong instructions and orders. Changing the way daily work is done to something autonomous and promoting triggers and motivation for learning will also lead to the realization of career autonomy.

When companies change, what is required of the people working there also changes. While working styles that can better reflect individual needs become possible, I hope we can expand our own possibilities through continuous learning.

Listening to everyone's stories, I have high hopes for Japan's work-style reform and at the same time felt strongly that I must 'reform' my own unplanned and unprincipled way of working. Also, the word 'diversity' was mentioned by Mr. Noma at the beginning. Listening to various stories today, I realized that even when discussing the same phenomenon, perspectives differ, which literally gave me new insights.

Furthermore, the story about how trying a side job makes you 'realize the grass of your own company is green' was truly an eye-opener. I believe that diversity has created a new interaction here again.

I think there are still many points to be discussed, but I would like to end today's roundtable discussion here.

Thank you very much for today.