[For Hiring Managers] Talents Market Updates in Legal, Compliance, Risk Management Area. Tokyo, Japan.
The Job Market in Japan is unique. Although under the Covid-19’s effect, it quickly adopted the “New Normal”. It is very confusing for many hiring managers. So, I decided to write an article to help you hire the right talents in the Tokyo markets. (I wrote Tokyo to make it simple, but this applies in Kanto area, namely Tokyo, Kanagawa, Saitama, Chiba)
- Overview
- Legal, Compliance, and Risk in Common
- Legal
- Compliance
- Risk Management
Difference between Now and before Corona
Popular Industries
Japanese Qualified Lawyers (Bengoshi)
Other Bar Qualified Lawyers
Non-Bar Qualified Legal Talents
Overview
Although “our normal life” has not been back yet, after the huge decrease in numbers of job openings in the 1st half of 2020, the job market started getting back to the normal level, as well as the numbers of candidates. It means that the Tokyo’s job market has become a candidate-driven market again, and you need to make considerable effort to fill the positions again.
Having said that, it is not completely the same as before Corona. We need to note the three points below for smooth hiring.
Difference between Now and before Corona
- Working visa applications takes longer time, so it has become more difficult to hire people from overseas.
- Getting hiring approvals takes longer time, especially for non-Japanese companies. It risks letting candidates to accept other offers.
- Only web interviews are available. So you need to make an offer without meeting candidates in person.
Popular Industries
Due to Corona, now popular industries are either stable or believed to be stable industries like below.
IT (Fin-tech included) >> Pharma >> Others (Manufacturing, Financial Insutitutions, Consulting Firms, etc) >>>>> Retail, Travel related
As there are so many openings in the IT industry, being an IT company is not enough to attract candidates. So it always makes sense to come up with ideas of how effectively you sell your company/position to the right candidates.
Selling points of companies are often quite similar at any other companies. For instance, global jobs, flat culture, growing business are cliché. To differentiate your company from others, it is worth asking someone external, like recruitment companies.
From here, I will talk about specifically Legal, Compliance, and Risk hirings.
Legal, Compliance, and Risk in Common
As mentioned above, the jobs-to-applicants ratio is similar to the level before Corona, but fewer senior positions. If you need to fill c-suite roles, now is the least competitive time.
Besides Corona, candidates in these areas have become pickier about how much companies value Legal, Compliance, and Risk functions. They avoid applying for companies that try to fill those positions for peer pressures, such as of investors or regulators, but companies that are proactively hiring for the positions with the belief that this hiring adds value to their business. This means that you need to offer competitive compensations too.
Legal
I will write about three separated groups, “Lawyers – Japanese Bar Qualified (Bengoshi)”, “Lawyers – Other Bar Qualified”, “Non-lawyers – Not qualified to any Bar”.
Lawyers – Japanese Bar Qualified (Bengoshi)
Being an in-house lawyer was not as common career-path for lawyers as in the Western world in Japan. However, it is changing now.
Numbers of In-house Lawyers in Tokyo 2001 – 2020
Source：JILA “Numbers of In-house Lawyers”
https://jila.jp/wp/wp-content/themes/jila/pdf/transition.pdf
Even though more and more Japanese lawyers are moving to in-house positions, the companies’ demand for them is increasing even faster. So the difficulty of hiring them stays at the same level.
Tips for hiring Japanese Lawyers
Firstly, offering them attractive titles and salaries is vital. Those lawyers need positions that pay off their effort to pass the most difficult exams in Japan is. Uncertain future promotion, growth, etc., are not attractive enough for them.
Secondly, interesting job responsibilities are important, such as a chance to deal with complicated legal matters, legal-related projects, and so on. But one thing you need to be careful about is that interesting job responsibilities can attract them only if you can offer a satisfactory titles and salaries.
In addition to the above, it is worth noting that providing flexible employment agreements attracts them, such as allowing part-time and side-jobs. Some Japanese lawyers want to gradually establish their own business while securing their lives financially by having a main job. However, still very few companies are open to these kinds of ideas. If you could offer something like this, you can differentiate yourself from other companies.
Lawyers – Other Bar Qualified
It is expected that the numbers of candidates with foreign Bar qualifications, such as New York, California, UK, Chinese, etc., will decrease in the job market in Japan due to Covid. Under the circumstances, fewer Japanese people will take those exams, and fewer lawyers from overseas will relocate to Japan.
Historically, Bar qualification was not a must-requirement for legal staff in Japan, but more companies started requiring it. The candidate pool of UK Bar qualified is especially dried up because of a huge demand for energy project-related legal hiring and few supplies.
Tips for hiring Lawyers qualified to Bar (Aside from Japanese Bar)
Like tips for hiring Japanese lawyers, it is important to offer generous titles and salaries to show that you highly evaluate their qualifications.
In addition to the above, those lawyers tend to prefer being in the international environment. Ideally, a legal team with many different nationalities, but as it is rare in Japan, you can attract those candidates by emphasising flat team structures, flexible working styles, and so on.
Lastly, assigning cross-border deals is a good selling point for those kinds of candidates. Whenever it is true, it is highly recommended to add such a thing to your job description.
Non-Bar Qualified Legal Talents
It is not true that people without Bar qualifications are easier to hire. Although more legal positions have started requiring Bar qualifications lately, candidates without Bar qualifications are popular for compliance and risk management positions. (as well as some specific legal positions)
Tips for hiring Non-Bar Qualified Legal Talents
Needless to say, that attractive titles and good salaries work, providing clear career visions is essential. Compliance and Risk Management positions attract those kinds of candidates better than legal positions, because many of them are worried about pursuing their career in the legal field without a bar qualification, since one day, they will lose competency in the legal area.
If your position eases their worries, you have a good chance to win over the hiring competition.
Compliance
Compliance can be categorised into two groups, namely “regulated industry” (Finance and Healthcare) and “non-regulated industry”. The latest trend is that more companies in non-regulated industries have started looking for compliance talents. It is sometimes more difficult than looking for candidates in regulated industries as compliance in non-regulated industries has never been common in Japan. In other words, you cannot find someone with direct compliance experience, as those barely exist, but someone with transferable experiences.
In non-regulated industries, the highest hiring demand is in tech industries, such as people with knowledge/experiences in GDPR and information securities. Candidates with this kind of expertise are challenging to hire.
Tips for hiring Compliance candidates – in regulated industries
The hiring trend in this field has been hiring people from your competitors with a better offer. Although this way will continue to work, it will be more important to hire people with “transferable skills”.
Here are examples.
- Hiring an Equity trader for an Equity Advisory Compliance position at a securities company because her/his product knowledge is useful for the compliance role.
- Hiring an MR for a Compliance position at a pharmaceutical company because s/he knows about 公正競争規約 (related to Act against Unjustifiable Premiums and Misleading Representations) which is extremely useful for compliance positions at pharmaceutical companies.
This “potential hiring” is becoming more important since the numbers of hires exceed the numbers of candidates with direct compliance experience.
* These needs are most urgent in asset management compliance areas.
When you are looking for a potential compliance talents from non-compliance areas, challenge will be how to attract them for compliance positions.
The majority of people are afraid of leaving from what they are used to to something new.
To educate those candidates by showing them examples of successful career building cases in compliance areas from non-compliance areas, asking recruiters for a help is worth considering.
Tips for hiring Compliance candidates – in non-regulated industry
As mentioned above, main mission in hiring will be finding out candidates with transferable skills to your position.
To do so, the first step should be to understand a gap that you want to fill by hiring a compliance person. If you start by setting requirements, you will likely come up with profiles that do not exist, so sorting out business needs and thinking as many as potential profiles that could fill your needs is beneficial.
For example, if you are looking for a compliance position that is responsible for GDPR, it would be a good idea to expand your search scope to HR candidates too, because quite a few HR people learn GDPR.
If you really need to hire someone who does the same job at your competitors, it is essential to research the difference of the names of divisions/teams and their functions at the competitors. It is commonly seen that work assignments to each division/team are different depending on companies. For example, your compliance team’s jobs might be done by a legal team at your competitor.
Risk Management
I have been observing hiring needs for risk management roles, such as ERM (Enterprise Risk Management), Internal Controls, etc., are increasing rapidly. It is expected that more and more new risk management positions will emerge because of globalisation and degitalisasion. So searching for risk management positions cannot be done by simply searching “risk” people, but
Tips for hiring Risk Management candidates
Similar to the compliance candidate search, it is better to give up “Ctrl-F type of search”, like you just do ctrl-f with the exact keyword from competitors but understand your hiring needs deeply, and research what kind of people could satisfy your business needs, and what kind of divisions/teams those kinds of people working at in other companies.
Also, like compliance hiring, it is essential to plan how to attract candidates who are not in the risk department. You will be surprised how often risk positions end up hiring people from other functions.
If you have further questions, please contact me through here.