Redundant employees who turn up for work every day

A company's "core" workers in Japan can still expect jobs for life, but recession has brought an end to automatic progression up the corporation's hierarchy. The result is a growing army of "plateaued" middle-aged and older employees. Some fare even worse. They remain on the company payroll but are, to all intents and purposes, unemployed. This article explores their plight.

While job cuts and restructuring mean that most Western employees are working harder than ever, around three million people in Japan - mostly middle-aged and older workers - are classed as "in-company unemployed".

These are workers who remain on the company payroll but are, in all intents and purposes, redundant.

Most of them have been with their company for 20 to 30 years. They were taken on in the 1960s, 70s and early 80s, during the Japanese economy's post-ware economic miracle. They were confident that their companies would continue to grow, and that promotion was therefore almost automatic. But recession, combined with company commitments to avoid laying off or discharging core employees, has caused many of these older workers to become "plateared".

Ther are trapped with their current employer because of the Japanese employment system. The outlook and talents of core employees are so much shaped by the company-specific ethos that there is little chance of finding another firm where they would fit in.

The morale of many of these employees, who have been encouraged to view professional and personal success as indivisible, has inevitably plummeted. Whispering campaigns now label these once-energetic employees "overpaid", "computer literate" and "the bulge generation".

Some companies engage in "shoulder tapping" (katatataki) and urge such employees to resign voluntarily. Those who fail to take the hint are sometimes referred to as "window gazers" (madogiwazoku) and "marginal employees" (genkai shain). Many of those who do manage to find another job suffer reduced pay, with a smaller firm.

Major Japanese companies with a number of affiliated firms often transfer middle-aged and older workers to the subsidiaries. Here, they can play a coordinating role between the parent and its affiliate, and pass on technical know-how. But the parent is also passing on to the subsidiary its problem of overmanning.

Employees parachuting into positions as executives in the affliate are said to be "descending from heaven" (amakudari). Staff in these smaller companies tend to feel frustrated that the top jobs in their firms always go to these amakudari. This, in turn, reduces the quality of recruits to the smaller subsidiaries.

University students seeking work in the private sector ten to aim for jobs with the giant Japanese corporations, and to "seek safety under a large tree". The deeper the recession becomes, the more they gravitate to the large companies. Even graduates from the most prestigious universities are now more likely to take a menial first job with a large firm, than to accept the chance to prove their ability in a small or medium-size company which is starved of talent.

Moreover, the older the employees seconded to subsidiaries sometimes find themselves doing jobs which are inappropriate to their training and background. Many manufacturing companies diversified into the real-estate and finance sectors during the boom years. Engineers and researchers from technical or development departments were suddenly sent to, say, the sales department of a newly established service-sector business. The employees consequently suffer high levels of stress.

The older employees have broad knowledge and experience and a wide range of personal contacts. Some Japanese corporations have attempted to convert these into concrete business opportunities. Examples include:

• establishing a business by joint investment between the company and the middle-aged and older employees, to provide a welfare program;
  
• settup up a subsidiary hiring retired employees, and subcontracting business such as transport and cleaning to it;
  
• establishing a company specializing in training young employees, using retired employees as lecturers;
• sending the older staff and retired employees to overseas factories for support and training of local staff;
• leasing a restaurant chain to a group of retiring employees and entrusting management to them; and
• making contracts with an outplacement company which helps middle-aged and older employees to find employment.

Many Japanese companies now hold seminars to help prepare middle-aged and older employees for retirement. Some invite retired employees back to talk about their life after retirement. A number of firms give increased paid holidays to employees approaching retirement, for them to take part in voluntary work.

The principles of lifetime employment, seniority-based pay and almost-automatic promotion for core employees have traditionally supported the growth of Japanese companies. Chipping away at these principles involves chipping away at the very essence of Japanese corporate society. Even if companies successfully overcome the current crisis surrounding middle-aged and older employees, the traditional Japanese industrial-relations and personnel-management systems are unlikely ever to be the same again.

If the old Japanese notion that the aim of a career is to get promotion is taken to its logical extreme, only the handful of company presidents are ever going to be satisfied with their working lives. The crisis facing middle-aged and older employees in Japan is perhaps beginning to force a collective realization that there is an alternative route to job satisfaction, which involves doing what one really wants to do for a living, rather than what society expects.

This is a precis of an article entitled "Middle-aged and older Japanese employees in Japanese corporations: their plight during the process of major historic change in employment," which was orginally published in Journal of Management Development, Vol.15 No.8, 1966, pp.7-15. The author was Norihiko Suziki, of the International Christian University, Tokyo, Japan.