Outlook for 2003
For many of us, me especially, 2002 will be a year to forget. The tech meltdown turned into a global economic slump, of which Japan continued to be one of the central (non-) players. However, it was good in one respect: it gave all of us a dose of realism and reset expectations. In a way, the trials and tribulations have made us stronger.
Looking forward to 2003, I believe that the first half of the year will be much like the second half of 2002. There will be short bursts of optimism and some troughs that will seem like the end of the world, but at the end of it business will slowly start to improve and opportunities for personal growth will become clear.
Probably the biggest event we can see for 2003 is the government allowing/forcing some of the big "zombie" companies out of business. I wouldn't be surprised to see a couple of major sacrifices, similar to that made with Yamaichi Securities back in 1998. With these big fish, there will be lots of second-tier subsidiaries and vendors down the food chain that will go belly up in a chain reaction. No one likes to see people pushed out of a job, but I think it is inevitable that the unemployment rate will rise to hit 6.5% or so - by far the worst rate in decades.
A couple of big failures will have an effect similar to cutting down tall trees in a forest - at first you don't want to do it, but after a while all the regeneration at the forest floor makes it worthwhile. The "forest floor" for foreigners will be generated by the buy-out funds pumping cash into revitalized companies. There will be strong demand for all kinds of support services, ranging from language and technology to regulatory knowledge, sales and marketing. We're already starting to see this trend in companies such as Japan Telecom, Citifinancial, and other recent acquirers of Japanese assets.
I also think that Prime Minister Koizumi and Takenaka - Minister of Finance stand a good chance of being able to implement a lot of their restructuring agenda. They will continue to skirmish with the LDP old guard, but the fact is that there just really isn't anyone untainted in the LDP who can appeal to the general public right now.
There will be a general trend towards hiring contractors. This will speed up once the revised laws on Shakai Hoken (Social Insurance) take effect in April. These new laws do away with the loophole that companies have used for years to keep Shakai Hoken costs down by paying bonuses less than 3 times a year. The tax amount is considerable, about 10% of the amounts involved, and thus companies will be looking for other ways to keep their insurance costs down. It may well be that as the law change looms closer, that major corporations will raise enough stink to get it delayed or repealed. But in the meantime, start looking at being a consultant as an option.
Senior troubleshooter-type jobs at companies that have just been taken over will become prevalent. DaiJob.com is already getting orders for such people in the consumer credit, retail, and insurance industries.
At junior levels, we'll see resurgence in positions like software developers, marketing and sales people, accountants and analysts, and project managers of all kinds. Export-related jobs will also start to increase again, as smaller companies realize that the local markets just aren't going to get any better and look for new outlets for their products and services. The key for job hunters will be bilingual capability and some knowledge of related industries.
Lastly, the job market for fresh graduates will be particularly bleak. As a result, we expect a record number of young Japanese to head overseas to study, and also a change of heart by fussy school-leavers regarding whom they work for. This will increase the quality and quantity of people applying at foreign companies and those willing to start out as trainees.
If you are considering a career in the recruiting industry, you can drop Terrie Lloyd an email for more advice at email@example.com. You can also see his weekly newsletter, called Terrie's Take, at www.terrie.com.