Contract Employees: The Interim Market in Japan

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    In Japan, the importance placed on corporate loyalty has created a complex narrative around interim market, often unfairly labeling individuals who have previously worked jobs on contract as disloyal to the company.  Despite the stigma, contract workers consistently perform jobs based on skills, especially in emergencies and specialized projects requiring immediate attention for the future of the workplace.

    We sat down with Arundhati Anggita (Gita), a Consultant on Boyd & Moore’s Interim and contract team in Japan. In this interview, Gita gives a picture of the changing interim market within contract-based employment and the Executive Search industry, as well as insights into her role at BMES.

       Industry Expertise

    Gita began by telling us more about her role, and the diverse set of responsibilities she has.

    “My tasks include sourcing candidates through database searches, leveraging LinkedIn, and optimizing job boards. Additionally, I conduct candidate screenings and ensure candidate follow-up processes. At Boyd & Moore, we excel in collaborating across diverse industries and have successfully filled various interim positions such as interim CEOs, Interim Finance Directors and Managers, HR Directors, IT professionals, Legal Positions, and more.

       The Interim Market Overview in Japan
    Interim Market Dynamics visual Japan Flag

    We asked Gita to elaborate on the current state of interim hiring in Japan, where corporate loyalty holds significance. She noted that corporate loyalty sometimes results in a negative perception of contract roles.

    “Individuals who have previously worked as contractors may be unfairly labeled as disloyal to the company.

    Nonetheless, the demand for contract employees remains consistent, especially in emergency scenarios and for specialized projects. For instance, in the event of an unexpected departure of a Financial Controller for specific reasons, the necessity for an interim manager becomes imperative to ensure uninterrupted business operations.

    It’s not limited to just emergency situations; many companies also seek additional support to successfully complete their organizational transformation projects, resulting in a demand for contract candidates with specialized skills.”

    According to LinkedIn, the demand for contract work surged by 36% from May to November, while demand for permanent positions only increased by 2%.

       Demographics of Contract Employee (契約社員)
    Interim Market Dynamics visual Japanese Metro

    Different industries attract applicants interested in temporary positions with varying profiles. Those who are already retired or close to retirement have historically been the main group looking at these kinds of chances.

    “As reported by The Japan Times, Japan’s national and local civil servants will increase the retirement age to 61 starting in April, with a subsequent annual rise of one year every two years until it reaches 65 by fiscal year 2031. However, I believe some private companies still maintain a retirement age of 60, which often leads to changes in employment status from “seishain” (full-time employee, 正社員) to “keiyaku-shain” (contract employee, 契約社員) or even potential layoffs.”

    “These retirement policies differ among companies, and upon reaching 60 years of age, there may be substantial reductions in salary (up to 50-80%) and reassignments to job departments that may not align with one’s skill set. Post-retirement, many individuals find themselves in good health and wish to continue contributing their expertise to help businesses thrive for a temporary employee contract period (派遣 社員 契約 期間). But a new trend has shown itself: younger applicants are showing interest in contract positions, especially in the financial and IT industries.”

    Compared to full-time jobs, which frequently place more emphasis on routine and job security, contract employment (契約雇用) offers a higher degree of flexibility, appealing to younger candidates in particular. With contract work (契約ジョブ), they can take a more balanced approach and pursue professional chances without having to commit to a full-time, regular position. Younger candidates benefit from this by being able to work whenever it suits them, which promotes a more flexible and dynamic career path.

       Interim Market Trends

    Exploring recent trends, Gita explained the upsurge in demand for digital transformation and organizational change.

    “The past year has witnessed a notable increase in the requirement for SAP Transformation Consultants, as many of our clients seek to implement the latest ERP solutions.”

    Bilingual skills, especially for facilitating communication between global and local teams, remain in high demand, explained Gita. “Particularly for Gaisikei (外資系) companies operating in Japan. These companies often have shared services located outside Tokyo, such as in India, China, or the US. Consequently, there is a growing need for individuals in Tokyo who can serve as communication bridges between the global and local teams.”

    Notably, Gita highlights that interest in interim roles is not confined to senior professionals, with a rising trend observed among younger candidates, particularly in finance and accounting.

    Interim Market Dynamics visual Female

    In the technology sector, the interim market is different due to the pressing need for specialized skills in large transformation projects. Many tech professionals opt for contract work (契約雇用), as their skills are high demand skills and relatively rare. Both Japanese and foreign self-employed IT contractors have successfully established themselves, often juggling multiple project management roles simultaneously. Given the rapid evolution of technology, many IT candidates are increasingly open to working as keiyaku-shain (契約社員).

      Industry-Specific Experiences

    We then asked Gita in which industries these trends are more pronounced. Gita notes a notable trend among professionals from prestigious big-4 consulting firms.

    “A significant number of these highly skilled accountants, often holding CPA qualifications, opt to establish their own companies or pursue contract-based self-employment. Typically, their career trajectory involves spending 3-5 years at a big-4 consulting firm to accumulate valuable experience before making the transition to freelance contract or entrepreneurship.”

    “One of the key attractions of freelancing is the flexibility it offers,” Gita explained. “Many of these professionals have cultivated relationships with 3-4 clients for whom they provide part-time support, particularly during the busy tax season or year-end closing periods. By embracing the role of a “gyomu itaku” (contractor, ギョム 委託), these candidates gain the ability to take charge of their schedules and engage in projects aligned with their interests. Simultaneously, they often enjoy equivalent or even higher compensation compared to traditional corporate accounting positions.

       Future of work in the Interim Market

    “I believe this trend is evidence that many individuals in Japan are increasingly open to exploring new possibilities and are placing greater emphasis on achieving a work-life balance suggesting a potential rise in self-employment.”

    This trend is to expect to bring a cohort of highly skilled candidates into the market, providing companies with opportunities to revitalize their organizations through cost-efficient, expert contract workers with the help of interim talent solutions.

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