Job Market for 2007 – Macro Outlook
2006 was an excellent year for most foreign firms and larger Japanese ones. The economy coasted along on export demand of both finished goods and tools, value-added materials, and corporate profits are at record highs. It was a good year to negotiate pay raises and to look for a new job - but will 2007 be more of the same?
Well, financial pundits are saying that things look pretty good for 2007 as well, at least for the first half of the year. The global demand for things Japanese will continue apace, both because the US economy seems to be in for a soft landing, and the Chinese continue to modernize their country with fervor that should last at least until the Olympics next year. Then of course, so long as factories keep pumping out such desirable products as Toyota and Nissan cars, Sharp and Sony LCD TVs, and iPod parts, the export sector will keep humming along.
The thing that is different about this recovery versus others in the is that Japanese companies are not sharing the profits with their employees as they have done in the past. According to the Nikkei in their 2006 Oct-Dec business outlook survey, most companies are saying that of their top ten capital priorities, capital investment was most important, followed by beefing up internal reserves then paying out shareholder dividends. Employee bonuses came in sixth. This of course means less money for salary men (salary-people?) and consequently less consumer spending.
Thus the sectors that are doing well in Japan are those that relate to the nation's production infrastructure, such as new technology and R&D, as well as banking and finance for corporate treasury management, and luxury goods and services for company owners, directors, and shareholders. If you're in one of these industries, in my opinion you should either stay put for the first half of the year, or if your company is being stingy, then look for another player in the same space.
However, if you're in a company that serves the consumer markets, while the signs are that some trickle down is finally starting to occur, apparently department stores in Tokyo had record turnover in their New Year bargain sales, many respected think-tanks are saying that consumer spending will still be slow in 2007. Thus if you're in education, consumer products, direct marketing or sales, you might want to consider switching industries.
The job market for foreign firms seems to be buoyant if conservative. Those companies which have been cutting staff and costs purely out of habit (most of them) are starting to realize that they instead need to gear up for the current expansion. The problem is that their headquarters management are busy fretting about a downturn in the homeland economies of North America, Europe, and elsewhere in Asia and are slow in approving expansion plans, especially where upfront investment capital is needed. The bursting of the home ownership bubble in many western economies has a lot of people spooked and as a result, risk is being viewed cautiously.
Of course, those companies directly pumping out profits from their Japan operations, without having to make upfront investments are a no-brainer for the head office management, and for these companies such as banks and business-to-business technology providers, it's full steam ahead. If you're in these sectors, make the most of the opportunity, seeking a promotion or the chance to join a new team.
To give you a market perspective from a hiring angle, at Daijob we're seeing lots of demand for engineers, B2B sales representatives, sales and marketing senior management, and finance staff. Of course these are perennial favorites, but the current expansion has increased demand and is making it possible even for those without strong language skills and/or experience to get a toe-hold and/or kick-start their careers. Areas which are in low demand currently, but may pick up if consumer spending picks up include design, education, and apparel and other retail sectors.