This document summarizes a report on talent acquisition in Japan. It finds that demand for talent acquisition leaders is extremely high, with many roles staying open for over 12 months. There is also a large skills gap, as most candidates only partially meet requirements. Compensation is correlated with meeting more criteria, with most candidates earning over 18 million yen meeting all criteria. Candidate motivation centers around industry, career growth, work-life balance, and compensation. The document provides recommendations for finding talent such as compromising on less important factors, developing internal talent, and using an external search partner.

1. The Japan Talent
Acquisition Report
2020
CONFIDENTIAL AND PROPRIETARY | PUBLISHED MAY 26, 2020
Any use of this material without specific permission of Makana Partners
is strictly prohibited

2. Executive Summary
Underlying Trends
Search Criteria Review
Skills Gap Analysis
Compensation, Experience, Age
Candidate Motivation
Case Studies
Roadmap to Success
Sources
Report
Highlights

3. Finding a world-class talent acquisition leader in Japan is extremely
challenging - perhaps more so than any other HR search. This enigmatic problem
is exacerbated by a highly robust agency market, an enormous skills gap
between the requirements of overseas hiring managers and the local talent
market, and the fact that the war for talent acquisition leaders is getting
more extreme. At any one time, between 12-18 blue chip multinationals are
fighting for the same talent with some of those searches staying open for more
than 12 months. This report highlights those challenges, analyzes dozens of
job descriptions and 135 candidate profiles, and presents a roadmap on how to
secure your next talent acquisition leader.
Executive Summary

4. High
Demand
A search on LinkedIn for talent acquisition manager or director
jobs based in Japan in May 2020 returned 13 results. The list
of companies include QVC, Nutanix, Walmart, Texas Instruments,
IBM, plus eight additional postings from recruitment agencies.
This doesn’t include GAFA and other major technology companies
that are constantly sourcing for the same talent.
In the spring of 2020, the pandemic caused the majority of
companies to go on hiring freeze. Despite that, one top talent
acquisition professional was approached for 15 roles, receiving
nine interviews and three offers, eventually deciding on a
global healthcare company - all within a two month period.

5. Talent Shortage
Although the Japanese economy is technically in a
recession, the job market continues to be red
hot, with the unemployment rate at 2.5% and a job
availability ratio at 1.39 (number of jobs per
job seeker, both figures as of March 2020). As
such, recruitment fees have increased 10% and in
some cases reach 40% of the candidate’s annual
salary. This talent shortage will only intensify
as the population continues to decline (the
latest data shows the population dropping by
430,000 in 2018 alone to 126,500,000).
As agency recruiters thrive, it cuts of the main
source of future in-house talent acquisition
leaders. Corporations having to work within their
C&B structure as well as consider internal equity
are having difficulty competing on compensation.
Source: Ministry of Health, Labor and Welfare, Nikkei Asian Review

6. Underlying
Trends
After reviewing dozens of Japan talent
acquisition manager and director level job
descriptions, we were able to create this
word cloud and identify several key
underlying trends.
Source: Makana Partners database, LinkedIn

7. Standard
Search Criteria
Basic Criteria
Hiring managers are looking for
talent acquisition leaders that
speak native or fluent level
Japanese and business level English,
have 5-15 years of full lifecycle
recruitment experience (in-house or
agency), and 3-5 years of people
management experience.
Technical Criteria
TA leaders are expected to be strategic,
creative, innovative and be able to deliver
results, whether that’s diversifying the
channel mix to include a strong direct
sourcing component, strengthen the employer
brand/be the employer of choice, or help
improve the recruitment process using
technology and data.
Cultural Criteria
It's important for the individual to be able to
excel in a fast-paced environment and energize,
coach, and grow the team. Strong communication
skills, a growth mindset, and the ability to
align disparate stakeholders were also seen to
be critical soft skills.
Source: Makana Partners database, LinkedIn

8. Skills Gap
Surveying 135 TA leaders working at
MNCs, we found only 43 (32%) met all
three search criteria, with the
majority 73 (54%) meeting the basic
criteria but only partially meeting
the technical/cultural criteria. 19
(14%) only met the basic criterion
with many being transferred from an
HR generalist or business role. Met Basic + Technical/Cultural Criteria
54.1%
Met Basic Criterion Only
14.1%
Met Basic + Technical + Cultural Criteria
31.9%
Source: Makana Partners database

9. Compensation, Age, Experience
Years of Experience
TA leaders surveyed had between 2-
25 years of TA experience with an
impressive average of 12 years of
experience. Individuals with 15+
years of TA experience were
usually earning 15M+ (up to 24M
total) not including RSUs.
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Compensation
TA leaders surveyed earned between
10-24M with the average earning
15M. This doesn't include RSUs
which range between 5-80% of cash
earnings. Individuals earning over
18M are usually meeting all three
criteria. See next page.
Age
TA leaders surveyed were
between 31-55 years of age,
with the average being 41
years old. This is
considerably younger than the
average age of a worker in
Japan, which is between 45-46
years old.
Source: Makana Partners database, Mercer
Years
Millions
(JPY)
Years

10. Criteria Met by Compensation
Compensation certainly matters when
trying to secure the best TA talent.
Under 13M, the majority of
candidates are not meeting the three
search criteria whereas the majority
of candidates earning 18M+ are
meeting all three search criteria.
That's not to say salary is
everything as there are superstar TA
leaders at each salary level.
However, to attract their attention
your organization must offer the
following to meet candidates
motivation.
Source: Makana Partners database
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11. Candidate
Motivation
1. Industry
Talent acquisition professionals want to work in an
industry that they’re passionate about and
rightfully so as they need to be the face of your
organization. IT, healthcare and consumer brands
lead in terms of popularity.
2. Company Brand
A strong employer brand will help talent acquisition
attract and secure the best candidates in the market
i.e. make their jobs easier. In addition, strong
brands are perceived to have a more stable need for
growth i.e. better job security.
3. Career Progression
Talent acquisition professionals are looking for bigger
and more challenging roles to develop their careers. This
can be in the form of a regional role covering NEA or
APAC, as we’ve seen at Google and other tech companies,
or a career path to a talent management or HRBP role.
4. Work-life Balance
With the onset of the pandemic, work from home has become
common and companies that allow employees to work from
home indefinitely will have the advantage securing talent
in the future.
5. Compensation
Candidates are commanding a 10% salary increase on
average, while the most sought after candidates securing
15-20% salary increases when they move. Big tech and IT
unicorns understand the importance of talent acquisition
and are offering stock options anywhere between 5-80% of
base salary.

12. Case
Studies
Case Study 2
Makana Partners has recently supported two organizations in finding
talent acquisition leaders. With one of our clients based outside the
Tokyo metropolitan area, the location was certainly a challenge. Using
our vast network, we were able to find a talented individual living
close to the office location. Leveraging a budget of 13M, the person
was an excellent fit for the role with the client only having to
compromise on people management experience. In another case, we
supported a major retail brand in securing their talent acquisition
leader. Her final package was 14M and again, our client had to only
compromise slightly on people management experience. Although the
search took only three months, we had engaged with the individual for
3-4 years before making the introduction.
Case Study 1
In 2019, talent acquisition leaders were in such heavy demand that top
blue chip MNCs had openings that were open for more than 12 months,
sometimes up to 18 months. One technology company, had to hire a
talent acquisition leader with only two years of TA experience for a
package north of 20M from a direct competitor. In another case, a
major retail company had to hire someone outside of the industry with
minimal people management and large enterprise experience.

13. Roadmap to
Success
Transfer or Develop Internal Talent
1.
3. Manage Internal Stakeholders
One of the biggest challenges in the recruitment
process is managing the stakeholders' expectations.
Overseas hiring managers in particular that don't
understand the dynamics of the local market tend to
struggle with the level/volume of talent available in
Japan.
4. Close in the First Round
As highlighted in the report, many TA searches are
open for more than 12 months before they're closed.
In many cases, the reason is that the hiring
manager wasn't happy with the first round of
candidates although they were the best in the
market at the time. The reality is that it might
take another 3-6 months before another round of
candidates becomes active.
2. Internal and External Referrals
5. Compromise
Are you only considering Japanese candidates? Our data
show that 31 out of the 135 TA leaders surveyed were
non-Japanese. Do you need a stable CV? Due to the talent
shortage and fluctuation in workload, TA professionals
have more job changes compared to the average HR
professional. It's important to question the reasons for
leaving rather than reject just on the number of jobs on
a CV.

14. Roadmap to
Success
9. Wine and Dine Candidates
6. Candidate Experience
The speed of response, the quality of feedback, and how
much they feel valued by the organization are all
important parts of the process. Even if the candidate
isn’t successful in the interview, it's important to
provide the feedback or you risk damaging your
company's brand when they speak negatively about their
experience to their friends.
7. Wait it Out
If you've covered all the bases and are still left
empty handed then it's time to play the waiting game.
From our research, only 10-15% of candidates in the
market are actively/passively looking for opportunities
at any one time. Sometimes you'll just how to wait for
the superstar candidate's situation to change.
8. Align to Candidate’s Motivation
Review the candidate motivation slide and consider
where you can improve in terms of your employer value
proposition, whether that’s the scope of the role,
work-life balance, or compensation.
11. External Search
Without a doubt, the quickest shortcut to success
is to use an external search partner, whether that
be retained, contingent, or through RPO. Each has
their pros and cons but regardless of approach you
should use a firm that you trust, has many years of
TA search experience, and can draw on a vast
network of the appropriate candidates.
10. Job Boards

15. Makana Partners
At Makana Partners, we believe that talent and opportunities are universal
gifts. By connecting the two, the possibilities are limitless. We pride
ourselves in providing the highest quality service based on trust and
integrity, and hope to create a community where talent and opportunities
can meet unhindered. As all gifts need to be nurtured, we understand the
importance of long term relationships. We hope to add value each step of
the way during our journey together.
Makana Partners supports senior HR search across all industries based in
Japan, on a contingent, project, or retained basis. We offer market
intelligence and strategy to identify, source, and secure top talent. Using
our technology and our expansive network, we are able to introduce the best
talent for your organization considering skills, experience, and culture
fit. Throughout the search, we will provide feedback on the reputation of
your company, how the process can be improved, and align expectations
between stakeholders and against market trends.
10+ Years of Japan HR Search Experience | 150+ HR Professionals Introduced
Network of 6,000+ Biligual HR Professionals

16. Contact us
Mailing Address
Makana Partners K.K.
2-131-7 Mutsukawa, Minami-ku
Yokohama-shi, Kanagawa-ken, Japan
〒232-0066
Email Address
ysl@makanapartners.com
Phone Number
+81 80 3397 4914
Managing Director
Yan Sen Lu

17. Sources
1. Nikkei Asian Review - https://asia.nikkei.com/Business/Business-
trends/Headhunters-cash-in-as-Japanese-companies-strain-to-fill-top-jobs
2. Mercer - https://www.mercer.co.jp/our-thinking/voice-on-growth/human-
resources-challenges-presented-by-japan.html#contactForm
3. Ministry of Health, Labor and Welfare -
https://www.mhlw.go.jp/english/index.html
4. LinkedIn - https://www.linkedin.com/
5. Makana Partners Database