Diversity Challenges in Japan

It’s clear by looking at the demographics of Japan’s population that diversity initiatives aren’t just a “nice to have” for Japanese companies. They are a business imperative.

Twenty-two percent of the population in Japan is over the age of 65, according to the Central Intelligence Agency’s World Fact Book. At the same time, Japan’s birthrate is almost half of what it is in the U.S.—with only eight births per 1,000 people.

“Companies don’t have anyone to replace the workers who are retiring,” says Jan Combopiano, vice president and chief knowledge officer at Catalyst, a New York-based nonprofit that focuses on workplace diversity issues. “What many of them are trying to do is make up for decades of not having women in the workforce.”

Retaining key talent, regardless of their gender, has become more important for companies as Japanese workers have become more mobile, and thus more likely to job hop, says Akitsu Ito, a human capital consultant in the Tokyo office of Mercer Japan.

Also, as Nissan has noticed, women in recent years have become a dominant force as consumers, Combopiano says.

While Japanese companies have gotten support from the government, which has declared gender equity as a goal for all employers in the country, the main challenges these firms face is changing the culture of their organizations, consultants say.

Despite laws supporting gender equity, Japan still is a male-dominated culture, Combopiano says.

To address this, companies need to approach diversity initiatives as they would any type of change management program, Ito says.

This means the company’s top management has to be clear with its messages on the importance of diversity, he says.

Internal training needs to be part of these initiatives so that managers and employees throughout the organization understand why diversity is important and how it links to the company’s business results, says Kimiko Inoue, another human capital consultant in Mercer’s Tokyo office.

And it’s not just the male managers who need the training, she says. Women employees often need help understanding their opportunities throughout the organization, since this is a new way of thinking for many of them, she says.

However, to really get women employees understanding the potential for their careers at the company, firms need to have more female role models in top positions, consultants say.

According to a 2007 white paper issued by the Japanese government, female managers make up only 10 percent of all managers at Japanese companies.

“The lack of role models means there are a lot of women who don’t see any possibility for them to be managers,” Combopiano says. “Women are self-selecting out of the management track.”

But as more companies in Japan focus on these issues, progress is being made, consultants say.

“Diversity is a hot issue in Japan right now,” Inoue says. “Many companies have come a long way.”