[Feature: Rethinking Japanese "Work Styles"] Roundtable: 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 has been discussed within the context 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 falling 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 treatment differences between regular and non-regular employees. Furthermore, the COVID-19 pandemic followed, bringing about the work style of remote work from home.

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

First, Mr. Noma, how have you, as an HR practitioner, perceived Work Style Reform?

I am currently promoting well-being in a department called the Corporate Strategy Headquarters, but I was in the HR department until December 2021. When Work Style Reform was first discussed, I was involved in the work 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 of Ise merchants from Matsusaka, Mie, moving to Edo to start a soy sauce brewing business, and then transitioning to wholesaling with the collapse of the shogunate system. While we are not necessarily 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. Coming from that situation, it was a real struggle to face Work Style Reform and change the way we worked, which was predicated on long hours. However, I think it was very significant that we were somehow able to break away from that.

It was difficult to get employees to practice "being 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?" With the help of the systems department and the wisdom of young people, we introduced RPA (Robotic Process Automation) and AI, and through repeated trial and error, we improved efficiency by streamlining some operations in some cases.

It also served as an opportunity to review our existing HR systems. Ultimately, a work style based on long hours was a male-dominated way of working, and the seniority system remained. We faced this head-on and also addressed issues such as the transfer of female employees, gradually accepting diversity and carrying out 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 little 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 communicated about 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 accepts diversity and considers those who have time constraints due to gender differences or life events and cannot work intensely, moving away from the previous way of working where one climbed the ladder by sacrificing their personal life. While it is by no means perfect, I believe that is the positive aspect of the Work Style Reform we have faced.

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

I am currently the Head of HR at the Portuguese site of Novartis Pharma, a Swiss pharmaceutical company. As Novartis expands globally, how to adapt work styles to the culture and actual conditions of each country is a very important theme for HR.

For pharmaceutical companies, the core of the business is how many new drug pipelines are 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 the 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 due to the COVID-19 pandemic, working with high productivity in such an environment has become the point of Work Style Reform.

Three years ago, Novartis introduced 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 now occurring.

Therefore, a new internal policy was communicated worldwide starting in 2023. For sales employees, it means spending most of their time in the sales field and meeting customers in person as much as possible. For headquarters staff, it means working 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 again after being granted full flexibility. I am also concerned about whether we will lose talented personnel to other companies that still allow full flexibility, especially in terms of retention.

Overseas, the competition for talent in the mid-career recruitment market is extremely intense. It's very common for other companies to reach out directly when someone registers on SNS like LinkedIn, rather than through an agent, leading to a job change. In that environment, there is a very active movement to obtain a Master's or Ph.D. at graduate school while working to increase one's own employability. Companies also view obtaining a degree while working very positively.

In such an environment, unless we allow flexibility in working hours and move toward evaluating work based on how much impact (final result) was created, regardless of the process, we will not be able to acquire talented personnel.

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 achieve life-work integration 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 acceptable, so I hope people will think about their careers autonomously and become positive about new learning and side jobs, but it seems it will still take time for the effects to appear.

That was a very interesting talk. Now, Mr. Moriyasu. Mr. Noma mentioned that diversity leads to productivity. Given your work involving economic insights, social policy, and industrial labor policy, 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 Omi merchants (laughs). If we draw 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 management discusses HR issues as part of management strategy, or where responses to HR issues are requested by society and financial markets, as is evident in recent human rights and human capital disclosures. I believe we are entering an era where management positions 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 employees" 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 entries come from IT and other industries.

In that case, a system of hiring new graduates and spending over a decade training them to link company-specific methods to productivity is no longer rational. Rather, it becomes important to incorporate external knowledge in line with game changes. It is necessary to shift gears toward things like employees continuing to learn, incorporating diverse knowledge in diverse forms, and creating innovative things by incorporating side jobs and freelancers. I believe HR issues have come to be discussed within management for these reasons as well.

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 Head of the Office of Finance, who previously didn't appear much in HR, 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 this trend can be seen spreading to small and medium-sized enterprises in regional areas. There is a movement among regional managers 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 the need to prevent turnover or labor shortages, we are seeing more cases of it being tackled from the perspective of management strategy.

I believe the scope of such Work Style Reform, especially the fact that management handles 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, as well as the relationship between supervisors and subordinates, from a slightly more micro perspective than economics. From that viewpoint, how have you viewed the movement of Work Style Reform?

I recall that the discussion on Work Style Reform in Japan began around 2014. At that time, the situations viewed as problematic were 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 worked shorter hours, there were often 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 wanting to change workplaces where only people who can work in a specific way can succeed, and reviewing working hours for that purpose, has led to Work Style Reform.

What Work Style Reform aimed for was a transformation of the desired image of human resources—where an employee who can work overtime anytime and for any amount is not the "ideal," but rather, even if working hours are short, if they achieve the expected results, they are an important asset to the company.

In fact, there are quite a few people seeking to balance work with things other than childcare. This includes nursing care, balancing work with one's own illness as the average age of the workplace rises, 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 fully succeed.

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 great significance as 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 looking at the current situation alone, I think there is confusion. I believe the past two to three years have been a period of trial and error for managers, who are trying to manage subordinates in different situations while figuring out how everyone can come together toward workplace goals and how to develop subordinates while overtime is restricted—situations where there are no correct answers 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, diversity and productivity might seem to be 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 business was often considered based on the same values of men. As Ms. Sakazume mentioned earlier, it is certainly true that opportunities to succeed have begun to emerge for people who returned to work after giving birth and are talented but were not blessed with job opportunities because they could only work shorter hours.

Also, our company introduced a group company system through a group organizational restructuring in 2016. Previously, group policies were mainly considered at the headquarters in Nihonbashi, but since the restructuring, the wisdom of employees who are active in various regional companies and cannot be transferred has also come to be utilized in strategies.

I see. One more thing, Ms. Takahashi mentioned earlier that the online environment during the COVID-19 pandemic was shifted back slightly from "anytime is OK," but there are various evaluations regarding online work styles, aren't there?

For example, in Japan, while there are benefits such as escaping the hell of commuting or being able to concentrate on work, there is also the problem of what economics calls shirking because monitoring is not possible at home. When considering productivity as a whole for corporate management, 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 management is always worried that this 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 such people actually have dialogues and discuss from different perspectives.

If we don't provide many such opportunities within the 10-year process, it will affect performance. After all, there is a concern that it is difficult for that to happen remotely.

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

Especially for sales positions, it is important to grasp the seeds of innovation through 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 particularly like to ask about the feasibility of what is called job-based employment.

Previously, the membership-type system, where new graduates are hired and trained 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, international competition might not be survived through only new graduate recruitment and internal training.

With such environmental changes, this talk of job-based employment has also emerged. 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. To eliminate the so-called "assignment lottery" at the time of new graduate recruitment, they call job-category-specific recruitment, where one can choose the job category they selected for the first few years, "job-based." Or, some call internal job posting "job-based," and others call job-based pay "job-based."

Probably, pure job-based employment is, as Ms. Takahashi mentioned earlier, one where the loss of a duty—that is, the destruction of a job—simultaneously means the destruction of employment. I think this is the common language for "job-based" 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 envision 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 mutual growth.

Since our company has various business models involved in everything related to food, we believe there are various opportunities even without changing jobs, and one can develop a career while crossing job boundaries. Rather than the company unilaterally assigning positions, there are areas 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 in this way 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 areas where one can receive pay raises to a certain extent even without being very active within the company, I think employees tend to become less aware of the external environment. Also, due to rapid environmental changes, some job categories will become unnecessary.

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

Also, if we assign people based on jobs 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 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 with a deep understanding of the intent of the work, and will working for 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 one of our missions is to take care of and raise people from society, and we feel we must seriously tackle career formation within the company.

Also, in the membership-type system, people spend a long time together, and I think that high level of homogeneity has both good and bad points. Fostering a sense of unity is a very big advantage. For example, when logistics were about to collapse due to the COVID-19 pandemic or disasters, the whole company worked as one to solve the problem.

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

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

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

That said, since there are people who cannot transfer due to life events or various family circumstances, we have a course system where they can choose. We divided it into three courses: a course where they can go anywhere, including overseas; a course where they can transfer within a regional unit such as Hokkaido or Tohoku; and a course where they 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 we will revise the course system to include that axis starting from fiscal 2023.

I understand. Ms. 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 the 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's about being able to flexibly acquire necessary talent at the necessary timing within external equity. And I think it's also about being able to encourage exits.

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 must secure a certain amount of new graduates every year in order to create a talent pipeline for each generation.

Also, since we want 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 excellent talent 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 jobs 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 training. I think Japanese companies have rank-specific training from the senior level to assistant manager, manager, and director. Although we are job-based, we used to have such training 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, there is still a constant need from the management side for solid rank-specific training. 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 talented personnel is extremely high. Equal pay for equal work is the basis of jobs, but truly excellent people are constantly being headhunted by other companies offering 30% or 40% more in wages. The current situation is that we cannot retain employees with equal pay for equal work alone.

The second point is that jobs are defined by job descriptions, but environmental changes are so rapid that what is called "Jobs to be done" (JTBD) keeps becoming outdated every six months. As a result, rewriting job descriptions constantly fails to keep up, and the difficulty of defining things by jobs 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 prestigious Japanese companies, there are people in "window seats" (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 issue for Japanese companies, but for foreign-affiliated companies, there are completely different costs associated with retention, as well as the cost of hiring the next person when someone leaves.

Mr. Moriyasu, how can this job-based and membership-type be 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 outside, and easier for employees to change jobs, right?

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 position. Since people can see and compare better wages and conditions in the external labor market, there is 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 this self-investment and development cost 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 conventional employment practices are a 'relationship of security and constraint.' In other words, the company provides security to the employee, including livelihood security. In exchange, the employee is constrained by the company regarding time, location, and job 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 position. Of course, there was competition for promotion within the company, but in a sense, I think employees could feel secure leaving themselves to the company as long as they made self-investments 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, 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 last year or two. Moreover, I often hear that talented people are leaving.

A common reason is, 'Will my career be okay staying at this company?' or 'Is the career I want to pursue on the extension of my current path?' Interest in whether one can grow at this company and become a person valued in the external labor market is becoming very high. 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 they 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 relationship between the job and the 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 shift to job-based employment, but in terms of showing the relevance between work and career, I think utilizing job-based thinking will become required 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 career autonomy. However, such skills are essential for future managers.

As subordinate management becomes 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, now they can 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 should be a bit more discussion on whether all workers should transition to career-autonomous career formation.

That is a very interesting story. 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. That's why 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 issue will be personnel allocation across departments. 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 coordination costs increase, I think that ultimately, the collaboration that is important for the company will still take place.

I see, I understand. While it's unlikely that a membership-based society will be replaced by a job-based one overnight in the near future in Japan, it seems to be a common understanding that the membership-based model won't simply 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; once you quit a Japanese company and went to a foreign one, you almost never returned to a Japanese company, but I hear that has been increasing recently. There are even cases where large Japanese companies welcome people from foreign-affiliated companies as HR directors. However, in many cases, salaries drop significantly when switching to a Japanese company.

So what they do is the same way TV stations headhunt anchors: they use fixed-term employment and pay high salaries. In other words, because they can only pay salaries within that framework if they treat them under the membership-based model, 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 positions outside the membership-based model—with high pay and fixed-term contracts where renewal depends on results—has also been emerging recently.

Finally, I would like to ask for your outlook on future Japanese working styles. 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 an issue 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, if the labor market becomes more fluid, as in Mr. Takahashi's talk earlier, retention costs will 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 have also started having people who once 'graduated' from their 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. From the perspective of future Japanese working styles, please speak in relation to your own interests.

New graduate recruitment is necessary in our industry. The wholesale business doesn't own factories; it's a field where business is created through connections with people, and it's not the case that you can't succeed without having completed highly specialized studies. Therefore, meeting people who have the potential to apply their experience of 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 business talent, I think forming a population through new graduate recruitment is extremely useful.

Regarding reskilling, there are many cases even in the membership-based model where jobs disappear amidst rapid environmental changes. In such cases, 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 old ways don't work anymore, so please change,' but even if they try to do reskilling 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 heard 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 for the option of working from home. While flexible working styles like telework, flex-time, and staggered shifts existed as means before, the fact that we were forced to do so by the pandemic was significant. As the world changed, it permeated further in our company and had a great effect. While meeting in person is important, I believe that by successfully combining it 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 it's 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 job-based or membership-based, 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 the nature of 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 established 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 also consider it my mission to develop global leadership so that Japanese and other Asian talent can be more active internationally. By leveraging the high quality of Japanese work, skill in collaboration, and the strength of providing perspectives from a different culture when going to the West, the options for future working styles will expand greatly.

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 top talent, so not everyone can use them.

Is salary paid during that time?

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 unless it is permitted for a wider range of people in the future, 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 the nature of new graduate recruitment by companies. However, this system of hiring new graduates who have no particular expertise or work experience, letting them experience various things, and raising them to a certain level of competence 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 awareness of the problem of 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 mountainous 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 rotating through Company A for sales promotion, then Company B, then Company C.

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 influence of COVID-19, there are situations where the future of companies and employment is in jeopardy. In the midst of this, the whole community is working on a 'Bright Business Closure' project. I will 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, develop, and link people 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 initiatives have started 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 doing a side job at a Keio research center two days a week. I had an unexpected harvest there. I was able to think, 'Actually, Mizuho, where I currently belong, is pretty good' (laughs). I previously read a newspaper article where an HR person from Kirin Holdings mentioned the benefit of side jobs as 'making the grass of your own company look green.' I sympathize from the bottom of my heart.

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

In terms of the person who experienced a side job gaining 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 aggressively 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 on their own, 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 somewhat contradicts career autonomy where one tries to actively develop one's 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, there are cases where an ambivalent situation occurs: even in a company that promotes career autonomy, they do not seek autonomy in daily work and always have 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 look forward to the reform of Japanese working styles and at the same time felt strongly that I must 'reform' my own unplanned and unprincipled way of working. Also, at the beginning, Mr. Noma used the word 'diversity.' 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 that 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.