Why Foreign Companies in Japan are Not Really “Foreign”
According to a former Tokyo-based foreign consultant
I earned my five minutes of Twitter fame for writing that more foreigners in Japan should work at Japanese companies in Tokyo.
I was ripped to pieces on the platform for saying that.
One comment was particularly harsh: “No. Lasted 1 year in a J-company then switched to gaishikei. Higher salary, no “overtime façade” BS, and they actually gave me time off when I was sick.” — Bex (ベッキー)🈚️🈲 on Twitter
But hold on, before you think that “foreign companies” are different from Japanese companies, think again. It’s not as simple as that, according to a foreign consultant who used to work at “foreign companies” in Tokyo. My informant reached out to me personally and I promised to share this story, told from their perspective, with full anonymity.
Alvin: Could you please tell us a little about your background?
Ex-Tokyo Consultant: I am a non-Japanese, Asian professional, and I used to work at top foreign multinational financial advisory firms in Tokyo for more than six years. This is my personal experience of what it is really like to work in foreign companies in Japan.
Alvin: Many of the readers of my article reacted very strongly against working at Japanese companies. Is working at foreign firms really much better?
Ex-Tokyo Consultant: There is a certain cachet about working at such foreign firms, or gaishikei kigyou (外資系企業 in Japanese) because they are reputed to pay much higher than Japanese companies (or nikkei kigyou 日系企業 in Japanese), especially for fresh graduates or junior staff.
They are also said to have a more meritocratic, egalitarian, open, and progressive culture, such as being friendlier toward foreign and female employees.
In other words, gaishikei kigyou are seen to be the polar opposite of nikkei kigyou which are notorious for being rigid, hierarchical, insular, and behind the times, and for being particularly harsh on foreigners and females.
The high salaries at gaishikei kigyou are certainly attractive, but many people in Japan, including both Japanese and non-Japanese are drawn to them more for their perceived “attractive” work culture.
Out of 4.2 million companies in Japan, only 2,808 companies are gaishikei kigyou. Out of approximately 69 million workers, only around 400,000 people or 0.6% of Japanese labor work in gaishikei kigyou.
Hence, their relative scarcity and their lower rates of hiring give them an air of prestige that only the cream of the crop in Japan get hired by them.
Now, let me burst their bubble.
Alvin: Well, this sounds like the insider scoop we have been looking forward to!
Ex-Tokyo Consultant: Firstly, it is true that gaishikei kigyou pay higher than nikkei kigyou, often significantly higher, like 50% to even 200% higher.
Considering the small number of jobs, it is also much more competitive to get a job at gaishikei kigyou in Japan.
Secondly, people find gaishikei kigyou’s “open” and “flat” culture attractive.
But consider this — who are the majority of their employees? Looking at their tiny numbers in an ocean of nikkei kigyou — Japanese people of course — and most of their Japanese employees would have originally come from nikkei kigyou anyway.
Even in the top finance gaishikei kigyou like Goldman Sachs or KKR, their top executives in Japan are often from the much-maligned Japanese megabanks and other financial institutions because they have had good training (nikkei kigyou are known for training their employees well).
More importantly, they have the critical connections and domestic Japanese experience to make the Japanese business of their foreign employers succeed.
Accordingly, since the majority of employees at gaishikei kigyou are Japanese who were formerly from nikkei kigyou, how would you think the culture at gaishikei kigyou would be?
Well, not very different from your typical nikkei kigyou — rigid, hierarchical, insular, and behind the times. In fact, I felt that my colleagues at real nikkei kigyou enjoyed flatter cultures and more progressive colleagues compared to my uber-Japanese colleagues at my so-called gaishikei kigyou employer.
Thirdly, these gaishikei kigyou are in Japan for a reason — to do business with clients in Japan. Since the vast majority of their clients are likely to be Japanese, how do you think these companies act with their clients? As Japanese, if not more Japanese than them, of course!
Be it from business manners to rigid hierarchy to even open nationalism — you name it — and try their best to encapsulate it. In fact, since gaishikei kigyo generally do not train their staff as well as the nikkei kigyou on Japanese business manners and business development approaches, junior employees at gaishikei kigyou may not be as adept at handling Japanese business relationships.
They may even try to show their “Japanese-ness” (however they define it) in an outrageous and over-the-top way, and unfortunately that may involve unnecessary nationalism and resistance to new ideas from other countries.
However, clients can and do see through their façade. In some ways, I feel that many of the so-called gaishikei kigyou have adopted the worst of nikkei kigyou rather than their best — which include a high sense of responsibility, excellent teamwork, professional communication skills, and attention to detail.
For instance, managers at nikkei kigyou are expected to “take care” of their subordinates and provide training, and take ultimate responsibility for the team. These are things gaishikei kigyou may be lacking in, despite retaining other aspects of Japanese corporations like rigid hierarchy.
Of course, these are just generalizations stemming from my own experience. One should look at the merits and downsides of each individual company, before deciding on working there.
But is time to stop the delusion about the perceived “superiority” of gaishikei kigyou in Japan.
