Every year, over 1 million new graduates from high schools, technical/vocational schools, colleges/universities and graduate schools enter the Japanese workforce. All of these new employees will need some kind of training. While training budgets are normally curtailed during sluggish economic times, new recruit training cannot be spared or postponed in Japan because these new hires have had little to no preparation for working in the business environment. Some training is done in-house by the companies themselves, but much is often outsourced to seek outside expertise or because the company lacks adequate facilities for the training. Typical training themes include business etiquette, telephone courtesies, team-work, motivation programs, and more recently, corporate social responsibility. Although language and cultural differences in business communities present challenges for U.S. firms, U.S. companies may find niche markets in relation to training of new recruits.
While currents statistics specific to the market of new recruit training are unavailable from public sources (e.g. Labor Ministry), private company surveys do include questions and answers on the topic. iQ. Co., Ltd., a private placement company, did a survey on new recruit training in 2007 and received responses from 224 companies. The survey results confirm those from other sources: the larger the company, the more likely it is to give training for new recruits. The iQ. Co. Ltd. Survey found that over 90 percent of companies with more than 1,000 employees provided training for new recruits, as did 80 percent of those with 101-1000 employees.
Only 40 percent of the companies with 100 or less employees provided such training. Overall, about 40 percent of the companies surveyed outsourced the training. A major reason for Japanese companies outsourcing is to utilize the specific expertise of the training firms and/or the companies themselves often do not have resources to do the training in-house. Even when contracted outside, well over half of the training is given in at the companies by instructors sent by the training firm. Japanese universities, when compared to those in the United States, seem to neglect much training and preparation needed by students in the workforce after graduation. Except for professional graduate level schools (i.e. newly established law school systems and recently emerging MBA programs, as well as medical schools), undergraduate programs in Japan pay little attention to career building or whether graduates are well prepared for the jobs in their chosen fields. This trend perhaps comes from the combination of a long traditional belief in “academic independence” and the traditional method of recruiting of hiring; companies hire students on the very assumption that they are not work-ready, and companies consider it their role to train the inexperienced young new hires in order to mold them into the companies’ corporate cultures. Every new graduate is treated equally as a know-nothing recruit regardless of how much experience he/she has or the schools from which he/she graduated.
Due to the sharp economic decline since 2008, many companies have curtailed education budgets, and the business of corporate training is shrinking. According to a September 2009 survey conducted by NTT Resonant, a leading Japanese training company, the number of companies planning to lower training budgets jumped from 14.6 to 44.7 percent (according to responses from 167 companies). While training for mid-level managers or executives can be put off for a year, companies cannot forgo training for newly hired university graduates. New recruit training will be given, however, in a sluggish economy, companies tend to discontinue outsourcing and switch to in-house trainers and their own facilities, or opt for e-learning which is usually less costly than face-to-face training. An IDC Japan survey (Nikkei Sangyo newspaper 5/27/09) estimated the e-learning corporate market to be 47.5 billion yen ($530 million) in 2008, a 13.8 percent increase over 2007. IDC further estimates about 3 percent annual growth toward 2010.