Career

Why Diversity, Inclusion and Engagement Are Critical to the Future of Work in Japan

2 May 2019
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"In Japan, female career development, reform of working practices and diversity have become popular trends."

In Japan, female career development, reform of working practices and diversity have become popular trends. In September 2015, the Active Women’s Act was enacted, and in June 2018, a reform of working practices was enacted. On top of that, a number of other factors have also played into women's social advancement in Japan, including labour force declines (due to low birth rate and longevity), improvement of work consciousness (supported by the rising university advancement rate), and low economic growth (which has led to a decline in male income), as well as a steady increase in the number of female employers. As a result, it became clear that women's social advancement into society was inhibited by childbirth and childcare, but the so-called "M-curve" has improved in recent years — even though it has not yet lessened when compared to foreign countries.

However, the M-curve is reducing due to the spread of childcare leave systems and the development of childcare centres. Now, it is becoming more possible for women to continue to work, largely thanks to the increase in irregular employment of women. Women can choose low-income, non-regular work for specified reasons, such as: "can work in their own convenient time" or "easy to co-exist with family circumstances, such as housework, childcare and nursing". Moreover, in Japan, the percentage of women in executive officer and management positions is still low. Women’s employment is gradually progressing, but their professional duties remain in supporting roles, and they face many challenges in terms of career formation and development.

Hereafter, Japan will likely confront an unprecedented shortage of labour, along with a workforce decline. Therefore, it is a must for Japanese companies to secure not only women but also employees of all generations and various nationalities and promote their activities over the short and long term. Not only can diverse employees co-exist in the company or organization (diversity), each one should also be respected as a member of the organization and participate in organizational decision-making and activities (inclusion). This increases every employee’s willingness to contribute voluntarily and display their power (improvement in engagement), which can directly increase the competitiveness and productivity of an organization.

There are various initiatives in Japan to improve inclusion and engagement, but they are entangled together. Even if individual efforts are implemented, it’s often not possible to see the effects. In order to link these efforts together and reconstruct a company's competitiveness, we need to follow three steps: ① build trustworthy relationships, ② encourage time/location flexibility, ③ respect diversity and individuality.

①    Will it be helpful to build trustworthy relationships at work?

 

"Workplace" rather than "company" plays an important role in increasing inclusion and engagement in an individual. At the workplace, each and every employee can be oneself; in other words, they can freely express their thoughts, which allows for a sense of security and a trust to be heard — huge factors when it comes to promoting inclusion. This is similar to "psychological safety," which is the key to productivity improvement.

For example, various forms of open communication and information sharing or other efforts, such as visualization of work and role allotment at a workplace, should help in building a trustworthy relationship between an organization and its people. Also, building a trustworthy relationship is more important than anything — it brings out the ability and creativity of each and every employee, and this can lead to increasing the productivity of the entire team.

②    Do you want to improve flexibility?

 

In Japan, traditionally, organizational operation has been carried out by relying on employees who can accept the "3 unlimitedness” rule: the unlimitedness of job content, work location and working hours. However, in recent years, with the increase in employees who work while nursing or caring for children, the increase of dual-income households and the increase of employees who have health and mental problems, the number of employees who can accept this "3 unlimitedness" rule is decreasing.

When superiors speak of approving and promoting long working hours, employees who cannot deliver due to various circumstances feel that "I am not 100% permitted in this workplace," and it prevents them from displaying ability and creativity. Moreover, when information is shared only with people at the workplace, employees who work from home or remotely feel alienated.

Increasing the flexibility of when and where an individual works — and by promoting environment and work process improvement to increase participation awareness of employees who have various circumstances — can transform an organization into one that empowers everyone.

③    Have you included a point of view that respects diversity and individuality?

 

In the structure of employee management and personnel systems, we have redefined diverse needs of employees from a broad perspective to actively support the career and ability development, work-life balance, health, etc. of each individual.

i. For example, in some Western companies, so-called "no rating" has been introduced. Rather than linking evaluation results to numbers, evaluations aim to frequently give feedback, promote development and growth, and emphasize individuality of employees. In Japan, the idea of linking evaluation results to numbers is still strong, but more companies are looking to try out this new evaluation system to encourage the growth and career development of the individual employee.

ii. In terms of compensation, rewards don’t always need to be viewed monetarily. A reward should provide opportunities for career and ability development and encourage the display of creativity and ability of employees, which will increase engagement.

In handling measures to increase inclusion and engagement, it is extremely important to justify objective facts and data on the issues in your current organization, what they should be and which areas should be prioritized. Moreover, advanced management is required for future leaders who want to innovate. For inclusion and engagement efforts to be successful, the existence of inclusive leadership is also essential.

Moving forward, you should aim to construct trustworthy relationships between your employees and your organization and maintain an environment for working flexibly. You should also build a workforce on diversity and individuality; this is the largest safety net for individuals. In an organization like that, individuals will work on their own, with a high willingness to contribute. With such highly engaged employees, your company will become a stronger, more competitive and resilient organization.

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Siddhartha Gupta | 13 Jun 2019

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Mustafa Faizani | 30 May 2019

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Pearly Siffel | 30 May 2019

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They will need to explore alternative talent sources and new skills and place even greater importance on distinctly human qualities for a sustained competitive advantage — such as complex problem solving, creativity, superior client service, cross-cultural collaboration, judgment and empathy.  In effect, companies will benefit by putting people at the center of technology — not the other way around. 3. Be Indian, Buy Indian, Partner with India   As international companies seek to scale their operations and expand globally, they would be remiss to ignore India. By 2025, the number of Indian households will triple in size with 80% of them comprising middle-class families. And, with a growing middle class comes demand for a better quality of life, from basic necessities to luxuries and all forms of services, from better housing, education and health care to more robust transportation and safety. As global blue-chip firms expand into India, they will need to devise well-informed and relevant strategies. For some, the best mode of entry may be partnering with local companies with deep knowledge and expertise in how to navigate cultural norms, the regulatory environment and business practices. Expansion also means a shift in mindset, from considering India as a path to cheap labor and a valuable source of talented, educated people growing in their purchasing power. For all, it will mean letting go of traditional ways of working and, instead, adopting local partnerships, practices and leadership. Being patient and relentless in the pursuit of sustainable growth will drive value in the long term. Lastly, it benefits everyone to keep in mind that, before many of us retire, India will overtake the U.S. economy and will likely become the world's second-largest market.3 Growth, like time, does not wait. Done right, there is profitable growth potential in India's rapid urban expansion. Critically, for all to benefit means putting people first. To access more insights and practical advice on how companies and municipalities can accelerate their people strategies and realize commercial gains, download People First: Driving Growth in Emerging Megacities. 1U.N. Economic and Social Council, "Urbanization and sustainable development in Asia and the Pacific: linkages and policy implications," March 7, 2017, https://www.unescap.org/commission/73/document/E73_16E.pdf. 2Ojha, Nikhil and Zara, Ingilizian, "How India Will Consume in 2030: 10 Mega Trends," World Economic Forum, January 7, 2019, https://www.weforum.org/agenda/2019/01/10-mega-trends-for-india-in-2030-the-future-of-consumption-in-one-of-the-fastest-growing-consumer-markets. 3Wang, Brian, "World GDP Forecasts for 2030," Next Big Future, January 14, 2019, https://www.nextbigfuture.com/2019/01/world-gdp-forecasts-for-2030.html.

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Sean Daykin | 13 Jun 2019

Private equity (PE) is becoming increasingly important in the Gulf Co-operation Council (GCC) in light of recent intensified economic diversification and development efforts. It is emerging as a relatively new asset class in the region, with interest in "growth capital" rather than the more traditional "buy out" PE has seen in the developed markets of the UAE and Western Europe, in which fund managers take a majority stake. Indeed, venture capital (VC) has seen a surge of fundraising following the success of the region's VC unicorns, such as Careem, and the purchase of Souq.com by Amazon. Private equity can play an important role in driving economic growth. Factors, like the region's increasing wealth, recent important economic reforms and regional governments' strong initiatives to strengthen local entrepreneurship and promote small to medium-sized enterprises, make it highly attractive for PE investments. Governments in the region are attempting to foster further growth in VC by creating incubators and regional hubs with reduced regulations to encourage entrepreneurs to set up in the region. These efforts will ultimately drive sustainable economic growth, greater prosperity, and more highly skilled jobs. However, following the highly publicized case of Abraaj Group,1 the industry is calling for more robust corporate governance in the region. Local PE managers are facing far greater scrutiny as investors are starting to pay more attention to how their funds are handled. Regional investors are asking for a better understanding in gauging the performance of private markets. Buyers and investors want to base their decisions to enter the PE market on proven and tested information, considering factors like past performance and doing their due diligence on investment and operations. While measuring the absolute and relative performance of private markets is critical, it is significantly nuanced. As "value creation" is an important aspect in the private equity story, measurement should be not only accurate but also meaningful. As with all investments, evaluating past performance is always a factor when deciding whether or not to include private equity within the overall asset allocation of a portfolio. However, PE investors must look deeper to determine a Fund's true performance, through rigorous due diligence. A combination of metrics and qualitative measures are important for providing a holistic understanding of the Fund's track record and its future performance potential. In terms of quantitative metrics, the three most commonly used ones are Internal Rate of Return (IRR), Total Value to Paid (TVPI) ratio and Distributed to Paid-In (DPI) ratio. IRR is the most widely cited metric for measuring the performance of a private market investment. 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Siddhartha Gupta | 13 Jun 2019

Talent acquisition is one of the biggest challenges organizations face, according to Mercer–Mettl's State of Talent Acquisition 2019 annual report. With technological innovations sweeping the market and more emphasis being placed on skill evaluation, talent assessment is no less than a marathon to grab high potential talent before competitors. Also, as the hiring process continues to evolve from newspaper ads to social recruiting, the next industry wave is automated recruitment. Organizations have started drifting away from manual hiring to technology driven processes. Here are three ways technology is changing the talent landscape for the better. 1. Technology Can Boost Employer Brand Values   To attract and retain top-quality talent in 2019 and beyond, building a strong employer brand should be a priority of every employer. With more organizations striving to create better workplaces and spend more to drive employee engagement, your brand must create a positive buzz in the market. A leading LinkedIn Report also suggests that 75% of candidates factor employee branding before joining an organization.1 A positive employee brand can help you attract quality talent, retain them and close multiple requisitions on autopilot through referrals. Such is the power of employee branding. How can technology make a difference here? State-of-the-art tools, applications and solutions can make a huge difference. Be it a smart career site, robust social media presence or a Candidate Relationship Management (CRM) system, technology can assist organizations in achieving a more refined branding strategy — and bringing in all the benefits that come with it. 2. Technology Can Improve the Candidate Experience   When candidates have multiple jobs to choose from, you have to give them a pretty good reason to join your organization, which should be different than a fat paycheck. Providing a gratifying candidate experience can do the job. The recruitment process is broadly classified into three stages: Sourcing, Screening & Selection, and Onboarding. Your job is to provide a seamless and hassle-free experience in each of these stages, so that the candidate thinks, "This organization has a nicely structured recruitment process. It must be a good place to work." And, you're all set! On the other hand, if there are roadblocks in any of these stages or if candidates get the impression that your recruitment process is haywire, they might look for a better fit elsewhere. Thanks to recruitment technology, there are plenty of options you can exercise to provide a great candidate experience. 3. Technology Can Enhance Talent Pool Quality   Previously, organizations did not have any standard procedures for evaluation and recruitment. They largely resorted to newspaper ads, walk-ins, unstructured face-to-face interviews or even pen-and-paper tests to fill vacancies. However, with time, they realized that these methods came with drawbacks. Traditional methods of recruitment were long, complex and biased. They failed in assessing candidates' soft skills or in understanding their weaknesses, since HR did not have any concrete data or framework to base their screening questions on. This ultimately increased candidate back-out and early attrition rates, leaving employers in a dilemma.      Such an unstructured process has given rise to online assessments that now help in shortlisting candidates ideal for a job role, based on the skills they possess. Additionally, these pre-screening tests also predict a new hire's on-the-job performance and retainability. With top talent typically available in the market for 10 days, on average, companies are increasingly making their talent acquisition process more practical, time-saving and interesting to attract talented candidates. According to the Mercer-Mettl report, 53% of organizations use competency-based interviews and 40% of organizations use video interviews for hiring top talent. New-age recruitment methods not only increase candidate engagement but also improve quality of hires. In 2017, the use of assessments in the IT/ES industry shot up by 132%, while the Banking Finance Services and Insurance (BFSI) industry experienced an increased assessment usage of 217%. The adoption of technology for hiring indicates the effectiveness of new-age methods. The tools collect inputs from candidates and compile responses to provide a final report which highlights the positives, negatives and areas in need of improvement. The data-backed results ultimately provide a boost to the employer brand value, improve candidate experience, enhance talent pool quality and help to carry out bulk, as well as niche, hiring in a seamless manner. 1"The Ultimate List of Employer Brand Statistics," LinkedIn Talent Solutions,https://business.linkedin.com/content/dam/business/talent-solutions/global/en_us/c/pdfs/ultimate-list-of-employer-brand-stats.pdf.

Mustafa Faizani | 30 May 2019

There is no doubt that family businesses are prominent across the Gulf Co-operation Council (GCC) in various industries. From small to renowned multinational corporations, family owned and managed companies are the foundation of the modern country. Many of these businesses have been in existence for five decades and still exist today. As the first-generation of individuals begin to step down, we're seeing a shift to second and third generation ownership. It is estimated that, in the Middle East, approximately $1 trillion in assets will be transferred to the next generation of family owned companies over the next decade.1 The transition from the first to the second generation, and increasingly, the second to third generation, will have tremendous implications on the sustainability and growth of these companies. As a result, legacy and succession planning are becoming an increasing concern for the region, as many businesses stand in a position to pass the baton over to the next generation. While existing leaders prefer to keep the business within the family, there are many challenges that can arise if there is no preparation done well in advance of the transition. This lack of preparation is common, as it's easy for leaders to be so involved in the day-to-day running of the business that they lose sight of longer-term, more strategic priorities. The penalty for failing to tackle leadership or ownership changes can be significant. Lack of a clear, strategic succession plan can cause disruption, conflict and uncertainty within the business, making it vulnerable to an acquisition or takeover. The long-term survival of a business and the preservation of the wealth that has been built, will likely depend on getting ahead of those changes through legacy and succession planning. Have a Strong Internal Talent Strategy   Planning can have many benefits. The priority is to ensure leadership continuity, which is an important factor in keeping employees engaged and ensuring retention. It also allows time to hire internal candidates for key positions, therefore avoiding the cost of external searches. Internal candidates know the organization better and tend to have a better chance of success than external hires. Additionally, promoting internally helps retain good people, because they see opportunities for growth and will stay on to pursue them. A strong talent strategy can also fill leadership positions quickly, not only avoiding the potential cost of unfilled positions and errors from a lack of leadership, but helping to circumvent legal consequences from potential missteps. Evaluate Your Operating Structure and Execute in Phases   Leaders often first look at the current reporting structure and organizational chart to evaluate who the next leader(s) may be. However, it is also important to think of an organization's operating structure and how it may change over time. Leaders must consider how functional activities will evolve as the business grows, while also looking at the experience of the shareholders during this significant change. These factors need to be reviewed before selecting the people who will take over the function. As part of this process, it's critical that succession planning is done in phases. Firstly, it is important to identify the roles critical to the business and the pool of successors that best fit the organization's requirements. Ensuring the right assessments to determine readiness levels can solidify the next generation of company leadership. Multiple assessments methods are suitable, including looking at historical measures of performance, 360 leadership behaviors tests and predictive measures of potential. Involve Executive Leadership   Lastly, executive leadership involvement is essential in the succession planning process. The organization's top leaders should be fully on board with the plan to bring in the next generation and meet frequently to discuss strategic talent management issues. The ultimate results of a business succession plan depend on the adherence and commitment to it from the organization. It requires a high level of engagement and continuous efforts to keep the succession moving forward over time, despite inevitable interruptions of operational needs and unexpected changes. To learn more about succession planning for family businesses, visit us here. 1Augustine, Babu, "Middle East's Family Businesses Get Serious on Sustainability" Gulf News, November 7, 2015,https://gulfnews.com/how-to/your-money/middle-easts-family-businesses-get-serious-on-sustainability-1.1614502.

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