Emerging Human Resources Trends for Japan in 2024
AI Recruitment and Tight Budgets
In a year headlined by local and international challenges affecting the economic outlook, businesses are exercising caution pertaining to growth and expansion. Spurred by a need to ensure operational continuity in a sustainable manner, leaders are revisiting recruitment and talent strategies in search of alternative solutions that enable their Human Resources teams to not just survive but thrive.
We have discussed at length the challenges accountancy, finance and technology teams face when it comes to balancing budgets while securing essential talent to satisfy changing business requirements. But with a shifting eye on current trends, we found it pertinent to explore how teams closest to sourcing, hiring, and managing employees currently fare in 2024.
For a better understanding of talent trends affecting Human Resources here in Japan, we spoke to Yuna Kim, Team Manager at Hays Japan with further insights on this evolving specialism from our Hays Asia Salary Guide.
CONTENTS
- LEANER HUMAN RESOURCES TEAMS, RISING INDUSTRIES
- HUMAN RESOURCES CONFIDENCE IN RECRUITING TALENT BELOW AVERAGE
- AI IN RECRUITMENT IS STILL BUDDING
- GAPS TO IMPLEMENTING AI IN HR
- THE MOST IN-DEMAND ROLES IN HUMAN RESOURCES FOR JAPAN IN 2024
LEANER HUMAN RESOURCES TEAMS, RISING INDUSTRIES
Many specialisms today face cutbacks amidst wider concern about the economic climate and human resources teams are no exception. 54% of human resources professionals across Asia expressed a lack of optimism for the economy today, slightly higher than the average of 51%.
“Despite global economic uncertainty in 2023, the job market in Japan remains relatively stable, with demand for labour gradually increasing,” said Yuna. “As the value of the yen has been falling, there is a higher demand for HR talent especially in the retail and service industries, including tour companies and hotels with foreign tourism on the rise”. Both domestic and global companies are also in need of strong bilingual or trilingual HR candidates. However, talent search will be impacted as Japan faces a labour shortage due to its aging population.
“Despite global economic uncertainty in 2023, the job market in Japan remains relatively stable, with demand for labour gradually increasing,” said Yuna. “As the value of the yen has been falling, there is a higher demand for HR talent especially in the retail and service industries, including tour companies and hotels with foreign tourism on the rise”. Both domestic and global companies are also in need of strong bilingual or trilingual HR candidates. However, talent search will be impacted as Japan faces a labour shortage due to its aging population.
Additionally, generalists capable of performing multiple functions are being favoured over specialists. During this period, we are likely to see greater integration between human resources and administrative roles.
HUMAN RESOURCES CONFIDENCE IN RECRUITING TALENT BELOW AVERAGE
With the exception of those industries, however, confidence in hiring the right talent is lagging. Only 55% of human resources leaders were confident or very confident in recruiting candidates with the skills needed to meet organisation’s needs, lower than the 57% average for other industries.
And while candidate availability currently surpasses job supply in Japan, it will prove difficult to encourage cautious HR professionals who are likely to remain passive in favour of job security. Leaders have begun to recognise this, especially those seeking specialist candidates for high skilled positions.
Such companies have begun to relax their requirements for candidates, providing more flexible job scopes, career paths, and better benefit packages. Certain multinational companies are already looking to get ahead of their competitors by implementing four-day workweeks; an enticing proposition for candidates who value work-life balance.
And while candidate availability currently surpasses job supply in Japan, it will prove difficult to encourage cautious HR professionals who are likely to remain passive in favour of job security. Leaders have begun to recognise this, especially those seeking specialist candidates for high skilled positions.
Such companies have begun to relax their requirements for candidates, providing more flexible job scopes, career paths, and better benefit packages. Certain multinational companies are already looking to get ahead of their competitors by implementing four-day workweeks; an enticing proposition for candidates who value work-life balance.
AI IN RECRUITMENT IS STILL BUDDING
While many are keen to harness the power of Generative AI in the workforce, this technology has not yet been picked up heavily for recruitment in Japan. 16% of employers in Japan surveyed currently use AI minimally throughout the recruitment process, while 19% are only looking to explore it in the coming year. 52% have no plans to use AI in their recruitment processes yet.
Usage to date has mostly been for a mix of automation and optimisation of various tasks. 34% of respondents use it to perform predictive analysis for candidate fit, 34% use it to assist with interview scheduling and coordination, while 28% use it for resume screening and shortlisting.
Additionally, while 69% of human resources personnel support the use of AI tools to help them perform their tasks at work, only 30% of them believe their organisations have embraced AI sufficiently to stay relevant in the future.
THERE ARE STILL GAPS TO IMPLEMENTING AI IN HR WIDELY
Understanding the barriers Japan HR teams have with adoption is essential to formulating next steps. Only 33% of HR respondents in Japan felt they were sufficiently equipped, or had a sense of how to acquire the required AI skills to succeed in their role in the next three to five years. 17% of respondents were unsure, while 60% disagreed or strongly disagreed with that notion; the lowest in Asia.
This stems from a lack of confidence in upskilling. 73% of HR professionals did not feel their employer would support them in developing the necessary AI skills for their role. HR leaders will need to explore pathways to upskilling to ensure that these expectations are met, especially if their organisations plan on introducing AI tools to their workforce.
When polled about the primary challenges faced when implementing AI, the top three factors that surfaced were as follows:
This stems from a lack of confidence in upskilling. 73% of HR professionals did not feel their employer would support them in developing the necessary AI skills for their role. HR leaders will need to explore pathways to upskilling to ensure that these expectations are met, especially if their organisations plan on introducing AI tools to their workforce.
When polled about the primary challenges faced when implementing AI, the top three factors that surfaced were as follows:
- 30% of human resources respondents were concerned about the quality of talent failing to meet requirements
- 29% mentioned concerns about budget constraints
- 25% cited concerns regarding training HR staff to effectively use AI tools
Improving the accuracy of AI solutions in matching candidates to job requirements, establishing long-term cost savings and efficiencies, and implementing cross-departmental support and training initiatives will be crucial for successful AI adoption in recruitment.
We also wanted to discern which concerns stood out more for non-HR professionals compared to their HR colleagues to map out sentiments from both candidates and leaders who rely on HR to select quality candidates from interest pools.
The survey showed that more non-HR professionals were concerned about IT implementation issues, understanding and interpreting AI-generated candidate data, and data privacy and security concerns.
These underscore a desire for adequate IT support and infrastructure, and finetuning of AI systems with ongoing monitoring for bias to ensure fairness in the recruitment process. Providing managers with training and access to AI recruitment tools would also allow them to experience selections first-hand, giving them leeway to interpret and understand selections for more informed decision-making.
As AI education grows more widespread among the populace, concerns regarding the ethical usage of AI tools in recruitment, especially for determining candidate employability, have naturally risen. 34% of HR professionals in Japan believe organisations should disallow the use of AI tools until there are sufficient regulations and ethical safeguards in place, while 16% remain unsure.
Businesses have a lot of ground to cover when it comes to AI policies. Only 22% of HR professionals acknowledged that their organisation or leader had issued an AI tool usage policy, or provided guidelines on AI usage and restrictions for work. Addressing these concerns will be crucial to foster trust in hiring processes.
The survey showed that more non-HR professionals were concerned about IT implementation issues, understanding and interpreting AI-generated candidate data, and data privacy and security concerns.
These underscore a desire for adequate IT support and infrastructure, and finetuning of AI systems with ongoing monitoring for bias to ensure fairness in the recruitment process. Providing managers with training and access to AI recruitment tools would also allow them to experience selections first-hand, giving them leeway to interpret and understand selections for more informed decision-making.
As AI education grows more widespread among the populace, concerns regarding the ethical usage of AI tools in recruitment, especially for determining candidate employability, have naturally risen. 34% of HR professionals in Japan believe organisations should disallow the use of AI tools until there are sufficient regulations and ethical safeguards in place, while 16% remain unsure.
Businesses have a lot of ground to cover when it comes to AI policies. Only 22% of HR professionals acknowledged that their organisation or leader had issued an AI tool usage policy, or provided guidelines on AI usage and restrictions for work. Addressing these concerns will be crucial to foster trust in hiring processes.
THE MOST IN-DEMAND ROLES IN HUMAN RESOURCES FOR JAPAN IN 2024
These are the top six most in-demand positions in HR for Japan in 2024:
- Human Resources Business Partner
- Human Resources Director
- Human Resources Manager
- Human Resources Generalist
- Talent Acquisition
- Human Resources Operations
Interested to learn more? Our Hays Asia Salary Guide covers Japan, China, Hong Kong SAR, Malaysia, Singapore, and Thailand, compiling salary and survey findings of nearly 9,000 employers and professionals across the region.
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