Mining the flexible economy

Adecco Japan blazes a trail in one of the world’s tightest labour markets

Text by David McNeill /  Photos by Benjamin Parks

It may not be as immediately recognisable as Walmart or McDonalds but The Adecco Group is the planet’s third-largest employer after those two American behemoths. The Zurich-based staffing company manages 1.3 million workers in 60 countries, and posted €22.7 billion in revenue worldwide last year.

Japan’s market is a crucial one for the firm. “We have about 2,000 employees here,” says Christophe Duchatellier, CEO for Asia–Pacific at The Adecco Group, “and every day we find jobs for over 33,000 people. This is something very important to us.”

That partly reflects changes to Japanese capitalism and the growing corporate demand for more flexibility from workforces. About 90% of Adecco’s work locally is catering to Japanese companies. About 20 million of Japan’s workers are on flexible contracts, according to Duchatellier. Add in part-time contracts, and the number jumps to nearly 40% of the workforce. Those changes, of course, mimic what’s happening elsewhere around the world, but there are important differences here in Japan, Duchatellier points out.

“I’m from Europe where there is a lot of unemployment,” says the Frenchman. “In Japan there is little unemployment. It’s really a candidate-driven market.” For Adecco, that means a tougher local struggle to find qualified employees. “Positively, it means we can usually find good clients who understand the value of paying good prices to find the right talent,” he adds.

Still, while Duchatellier acknowledges that the Japanese market is “quite flat”, business is good. Sales turnover is about €1.3bn per year. Last year, revenue grew 3.5%. In Japan, The Adecco Group has just hired 250 university graduates, and over 100 more experienced engineers.

“Japan is changing and will continue to change,” he says. The biggest change is a “massive” increase in demand for engineers and IT specialists. “There are six job offers for every applicant in IT, and four job offers per applicant in engineering. If you have the right candidate, you can do very good business. That’s why we have quite an aggressive strategy for this market.”

Adecco offers a full spectrum of human resource services, as well as temporary and permanent placement, in addition to “outsourcing, career transition and talent development,” says its website. There are five brands that are now sheltered under the Adecco banner in Japan, including VSN, a provider of professional staffing services, mainly in engineering; and Pontoon, which directly manages workforces on behalf of corporate clients. The brand Spring Professional Japan focuses on recruiting middle- to senior-level management and experts in IT, engineering, finance and other professional services.

Success, however, has bred its own challenges. At one point, Adecco boasted over 170 different, sometimes overlapping, brands worldwide.

“It’s one of the difficulties you face if you grow by acquisition,” explains Duchatellier, smiling ruefully. Over the last few years, this unwieldy global roster has shrunk to under 50, and the aim is to reduce this further by the end of the decade.

“We are merging brands to make things easier to understand for everyone, including candidates and clients,” he says. “You have to manage the brands very well — or else there is no point in having them.”

That can be painful, he admits, but competition keeps everyone on their toes. Adecco has to fight for space in a crowded market, comprising 6,000 local HR companies. So, for the last three years it has tried to become more specialised, says Keiichiro Itakura, Managing Director, Spring Professional, Japan, for The Adecco Group.

“We’ve changed to allow us to focus on types of jobs and industries,” Itakura continues. Part of this strategy has been training consultants to meet with both job seekers and clients, and to learn how to better interact with both. “The consultants get a deeper knowledge of clients and their needs, and they find out about the candidates and can tell clients which ones might work well.” He calls this “360-degree” consulting.

Reflecting this retooling is Spring Professional, which has offices in Tokyo, Osaka, and Nagoya. Instead of generalists — with a focus on office, white- or blue-collar work — teams are divided by occupation. Each department has industry-specialist teams: back office, sales and marketing, and IT and engineering, with training for consultants to allow them to specialise in certain industries and jobs.

“You need more knowledgeable consultants for this approach,” says Duchatellier. “And professional staffing requires more consultation with clients.” By meeting with candidates from one particular profession every day, “you get to know them — their skills and needs — very well. That’s the specialisation approach.”

Starting this month, The Adecco Group in Japan will deploy its permanent placement business solely under the Spring Professional brand with 250 consultants, and the company plans to double the number by the end of 2020. This strategy is aimed, partly, at differentiating itself from the competition, but also as a way to meet swelling demand in Japan for talent by putting its specialised consultants all under the one Spring Professional roof. 

“We want to have a professional staffing brand doing our professional staffing,” says Duchatellier.

Japan will continue to be a challenging market, both men say. The workforce could shrink by more than 25 million people in the coming decades as the population ages and declines.

Yet, the market is still fairly closed, says Duchatellier. “In Singapore, 30–40% of our placements were people not living there; you have to bring in experts because the country doesn’t produce enough. It’s the same in Japan, but Japan is not making that decision to bring people in from overseas.”

The impact is already evident, says Itakura. “Our main candidates used to be 25-34 years old; recently, we’ve seen that increase to 45–55 years old. This country used to say ‘No thanks’ to candidates over 35. Now employers are looking for workers with skill sets and experience.”

Still, as Duchatellier points out, Adecco provides work place solutions. “One of Japan’s biggest problems is that it cannot get enough workers. That’s where we help out, and bring value.”  •