TT-601 -- Jobs Recovery on the Way? E-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, February 13, 2011, Issue No. 601


- What's New -- Skilled jobs recovery?
- Short Takes -- Non-lauryl sulfate shampoo
- News -- JAXA fishing net to round up space junk
- Candidate Roundup/Vacancies
- Upcoming Events
- Corrections/Feedback -- Job losses after meter readers go
- News Credits

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There was a rally in Tokyo this last week for over 1,500
unemployed college kids and other youths who have not
yet found jobs. Anywhere else this would have been a
demonstration against government policies, complete with
banners and confrontations, however by all accounts the
gathering was more of a pep rally than anything else and
people were punching fists in the air than at the

Of course the attendees have every right to be concerned
about their futures, given that only 70% of college
graduates had found jobs by December 1st, and less than
half of junior college students have done so. Some Japanese
firms may be making record profits on overseas earnings,
but most of them are still very much stuck in a difficult
recession, and between the two extremes not many are
hiring staff. Indeed, amongst corporate senior managers
there is a continuing fear that the US economy will take
another major tumble later this year, and that instead of
bulking up on people, cash piles are needed instead, to
ride out the coming rough times and to do M&As outside
the country.

What the hiring stats also tell us is that not only are
jobs overall scarce but for lesser skilled kids, they are
in particularly short supply. This is a direct result of both
manufacturing moving off-shore and the fact that so many
domestic services companies are in serious financial
trouble. If you don't have an engineering or medical
degree, or strong language and sales/marketing skills, then
the changing job market offers little promise for the
future and this year's graduates stand to become a lost
generation from a career point of view.

[Continued below...]

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[...Article continues]

The government's answer to chronic youth unemployment is to
offer companies JPY100,000 per month for each new graduate
they employ on a three-month fixed term contract (a type of
contract that allows companies to let the person go after
the three month period), then a further JPY500,000 if they
convert the employee to a regular full-timer.

While for companies that are going to be hiring new people
anyway this is a nice perk, for companies that are
borderline in profits already, and that is most of them at
present, then a mere JPY800,000 is not going to be a
serious incentive to bring someone new in. In fact, on a
salary of JPY250,000, the costs borne by the company for
social insurance for the new person would eat up the value
of the subsidy in just 18 months. So no one is going to get
rich hiring people they don't need.

Instead, the government needs to focus on a longer term and
more appropriate strategy, that being the improvement of
skills of employees, so that Japan can compete globally and
so that companies who are in good shape, mostly those with
technology and IT capabilities, can find the people that
they need. As we watch the jobs market, particularly the
online jobs sites, it is quite clear that there are plenty
of jobs available, but mostly for those people with either
technical abilities or language skills.

There is plenty of anecdotal evidence around that there is
indeed a buoyant market reemerging for skilled workers. A
recent Robert Walters jobs and salaries survey had this to
say about their quite substantial Japan recruiting practice:

"We saw a steady increase in recruitment activity during
2010 as many Japan-based firms lifted hiring freezes put in
place during the previous 12 months. While there was a
clear improvement in market conditions, employers remain
cautiously optimistic about the rate and sustainability of
market recovery."

The report goes on to say that financial services and IT
are recovering much more quickly than other sectors, with
Japanese companies are selectively hiring to support their
international business growth, as well as anticipated
major shifts in the technology markets, such as cloud
computing and all the support functions required for this
IT model. It then closes with the comment that: "The
competition for the highest caliber professionals will
increase in 2011..."

Other evidence that there is a strong recovery in the
recruitment of skilled people comes from the two recruiting
companies that are public and therefore required to share
their financials. Firstly, there has been a remarkable
recovery in the market value of JAC, a mid-sized recruiting
company based in Tokyo. This firm has been in the doldrums
for some time, but over the last 3 months its stock has
roared up the charts on the basis of positive earnings
reported in December 2010 -- the first in three years. Indeed,
since December, JAC's shares have risen from 3,000 yen to
more than 6,000 yen, going limit-up several times. Maybe
there is something else going on, a buy-out possibly? We
don't know, but for now we're assuming that JAC is going to
report a strong first half and that this is what is driving the
share price.

The other company that is easy to check on is En-Japan, the
firm that took over Wall Street Associates several months
ago. Looking at their financials, they were obviously badly
affected by the jobs slowdown in 2008, and in fact their
sales in 2009 were just half of the previous year. However,
on an unconsolidated basis (i.e., before accounting for
WSA's apparently very good numbers), FY2010 closed up, and
the forecast is for a recovery in earnings in 2011. This
has boosted En-Japan's stock price by about 40% over the
last 3 months.

We are hearing from other recruiting companies that the
last 6-9 months have been extremely busy and that everyone
is starting to make money again. Given that labor usually
lags the markets by 6-12 months, one might think that this
is simply the result of an overall recovery. However, this
time around, the action appears to be caused more by
groundshifts in the type of employees companies are needing,
and it's only the skilled jobs that will recover this time around.
Unfortunately, skilled jobs are just a fraction of the overall jobs
market, so bread winners will continue to be under pressure
and so will the domestic economy.

...The information janitors/



Some readers have asked why we are running these health
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you quote our reference number at, then we'd be
happy about that as well...

=> 1. Non-Lauryl Sulfate Shampoo -- Jason Natural Jojoba

The skin is the body's largest single organ, and yet we do
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sulfates and yet still lather and smell good. One such
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+++ NEWS

- A trillion dollars of public debt
- Consumer sentiment "improves" -- to just mildly pessimistic
- Net making expertise for space junk
- "We didn't know we had to pay tax"
- IUJ gets a new way to make money

-> A trillion dollars of public debt

A trillion dollars doesn't sound as much as it once did,
thanks to the US deficit over the last couple of years.
Nonetheless for Japan the government's JPY919.151trn
(US$1.12trn) debt mountain means that every man, woman,
and child now owes JPY723,622 (US$8,800) to someone in
unpaid taxes -- i.e., the way that the government is likely
to get this money back. What's worse is that the Finance
Ministry reckons this total rose 1.1% in just the last four
months. ***Ed: As we keep saying, luckily the Japanese
government owes most of this money to other Japanese, the
same people they are able to tax. Once they start having to
go ashore for funds, then you know they're in real trouble.
Not something that is likely to happen in the next 5 years,
though, thanks to the pending rise in consumption tax.**
(Source: TT commentary from, Feb 10, 2011)

-> Consumer sentiment "improves" -- to just mildly pessimistic

A Cabinet Office survey has found that consumers are more
optimistic about the economy than any time in the last
seven months. The Office says that consumer sentiment index
rose to 41.1 in January, up from 40.1 in December. The
index is calibrated such that a reading of 50 means that
consumers are neutral about the economy. So right now, 20%
more people (70% in total) are still pessimistic.
Apparently that's a reasonably good reading in a nation of
pessimists... (Source: TT commentary from, Feb 9,

-> Net making expertise for space junk

Making the weird news list for this week is Japan's JAXA
space agency, which apparently is working with a fishing
net manufacturer to make a steel wire net for collecting
space junk floating in orbit around the earth. The net will
be several kilometers wide and after a "catch" of junk is
made, it will be electrified by an attached control box,
causing the whole mess to fall back to earth and be burned
up upon re-entry. JAXA is still some years away from making
anything solid from the project, but needless to say, the
roughly 320,000 pieces of junk exceeding 1cm in diameter
and in orbit at the moment is causing some risks to space
travelers and someone needs to clear it. Clean-tech takes
on a new dimension. (Source: TT commentary from,
Feb 8, 2011)

-> "We didn't know we had to pay tax"

There must be some embarrassed people working over at
JPMorgan Securities, after it has come to light that 120
former and current employees have been dunned by the Tax
Office for not paying taxes on an estimated JPY700m of
income earned primarily through a stock option program run
by the company up to 2008. Many of those accused apparently
operated the shares received through the program in
off-shore trading accounts, making it especially naughty.
(Source: TT commentary from, Feb 13, 2011)

-> IUJ gets a new way to make money

Stuck out in Minami Uonuma, Niigata, a pretty but remote
place nonetheless, the International University of Japan
has its work cut out for it trying to attract students.
Over the last few years it has managed to do so by offering
advanced education to foreigners, mainly Asians, on
scholarships. But again, this has been a tough way to make
money. So it's good to see them come up with something new.
Essentially, they have so many foreigners on their campus
now (about 90% of students) that they are able to offer
summer "immersion" classes to employees of major companies,
who need to learn English for their jobs. Apparently the
IUJ folks have been hard at work and have signed
"partnership" agreements with 35 major Japanese
corporations, including Orix, Kao, Sumitomo, Takeda
Pharmaceutical, Panasonic, Fast Retailing, and Mizuho. One
week in such a course will be JPY700,000 per person, rather
steep but probably cheaper than sending those same folks
abroad for a similar period. (Source: TT commentary from, Feb 12, 2011)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.


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--------------- Start a Company in Japan ------------------

Entrepreneur's Handbook Seminar, 19th of February, 2011

If you have been considering setting up your own company,
find out what it takes to make it successful. Terrie Lloyd,
founder of over 13 start-up companies in Japan, will be
giving an English-language seminar and Q&A on starting up
a company in Japan at The Executive Centre (Tokyo Bankers

This is an ideal opportunity to find out what is involved,
and to ask specific questions that are not normally
answered in business books. All materials are in English
and are Japan-focused.

Date: Feb 19th, 2011 (SAT)
Location: The Executive Centre (Tokyo Bankers Club)

For more details:

Our special thanks for the venue go to The Executive
Centre, Mr. Paul Taylor
TEL: 090-9363-9605/email:

---------------- ICA Event - February 17 ------------------

Speakers: Dr David Sweet & Charles Breen, Specialized Group
Title: Job Search, Recruiting and Training

Details: Complete event details at
(RSVP Required)

Date: Thursday, February 17, 2011
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to
all. Venue is The Foreign Correspondents' Club of Japan.



In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

*** In Terrie's Take 600 we discussed the link between
smart meters and looming unemployment for the tens of
thousands of meter readers that utilities hire.

=> Reader Responds:

On Smart Meter’s and unemployment – it occurs to me that
this is probably considered fine by a certain school of
thought concerning the inverting demographic triangle. OK,
maybe it’s a little out of sync with the big retirement
bulge not quite begun yet, however you can imagine the “Men
in Grey” considering as this being a 30K reduction in
future needs to import cheap foreign labor whose other
utilization can be replaced from the newly unemployed
housewife seeking part time work pool.....

Another key reduction will be in the number of old guys on
the highway toll booths (post-ETC, they are gradually going
the same way as those who used to man the railway ticket
gates, and will phase out to only a few needed per toll
area). Of course when the real crunch comes a reduction in
the orange light-saber management professionals, and those
in allied trades can also be called upon to make the
numbers balance!

On Ishihara – I dunno – that’s nothing particularly
outrageous in what he said, by his standards – he has said
far worse on occasion..... I can bear personal witness
to having heard him say worse myself some years ago.


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