Young Job-Seekers in Japan Head to Small, Foreign Firms

After a string of sleepless nights, Kazuhiko Ishibashi decided to go ahead and break the mold. Upon graduating from college, he decided not to seek employment at a big-name Japanese company and instead went to work for a small German-Japanese joint venture.

The formula for success in Japan has always been to go from a good college to a lifetime position at a large firm, then straight to retirement and the golf links.

That makes Mr. Ishibashi's decision to go against the grain highly unusual. But five years later, he's looking like a trendsetter. "Now that even big companies can go bankrupt, I think people will be more selective about where they work, and use their own criteria," says Ishibashi, who is now a department head at his firm, based in Fukuoka.

Increasingly, young people are abandoning the work patterns their parents faithfully observed. For many new graduates, the prolonged economic recession, mounting bankruptcies at reputable firms, and financial scandals have shattered the old employment models.

The result is a shift in employment patterns that's creating a boon for small and foreign firms. "The old formula doesn't apply anymore," says Daisaburo Hashizume, a sociology professor at the Tokyo Institute of Technology. "Japan is in a transitional period now. It's time to seriously research and choose your job instead of simply chasing a big-name firm."

Passing up a lifetime job

In the past, foreign companies were seen as unstable places with weak job security and tough internal competition. They weren't an attractive option when placed next to the package big Japanese firms offered: In return for loyalty and dedication, employees were ensured promotions and a job for life.

But a recent survey at Tokyo's elite Keio University shows that more students are turning their backs on the old guarantees. "More than double the number of students went to foreign firms last year, compared with five years ago," says Nobuo Nagami, director at the university's career center.

Mr. Nagami attributes much of the shift to the impact of bankruptcies and recent corporate corruption scandals. "Many students were disappointed with what's behind these big Japanese companies," he says. "They're also hoping [foreign firms] offer much more challenging and rewarding opportunities."

Chiko Tanaka, who graduated from Keio this spring, is one of these students. A small, athletic woman who finished first in her graduating class, she is now working at the Tokyo branch of the US investment house Goldman, Sachs.

During her job interviews, she didn't visit a single Japanese company. "I think foreign companies have better corporate ethics," Ms. Tanaka says. "And as a woman especially, I only thought of foreign firms because they'd treat us as equals. I wanted the fair treatment and workplace competition that many Japanese companies seem to lack."

Small firms benefit too

Small- and medium-sized companies, which make up two-thirds of the economy, are beginning to profit from the trend as well. The number of university graduates joining small companies almost doubled from 1991 to 1996, the Labor Ministry says.

"Some [students] even told me they didn't care about the size of the company," says Nagami, whose career-guidance office at Keio is lined with file cabinets full of company profiles. "If the company helps them develop skills in their field of interest, they say 'What's wrong with such a choice?' "

For traditional Japanese parents, plenty is wrong with it. "Bigger is better," says Yuko Tsukamoto, a Tokyo housewife who was disappointed when her son chose to work for a small financial firm. "I still think there's value in traditional lifetime employment at a big Japanese company," she says.

The corporate old guard is also wary of this new, youthful flexibility. In characterizing employees in their 20s and 30s, a spokesman for Japan's Management and Coordination Agency described the younger generation as "less loyal" to their companies.

Switching jobs mid-career was once a completely foreign idea in Japan. But now monthly magazines feature articles on "how to successfully job-hop." Nearly 6 million working people - 1 out of every 9 workers - are currently looking for a chance to leave their jobs for a new post, according to a recent government survey.

Shinzaburo Honda sees a difference as well. The director of the Waseda Seminar, a secondary school in Tokyo, says applications for a bar-exam preparatory course have jumped 60 percent or more in just the past three years. Those who come to the school after work include salarymen, salarywomen, doctors, teachers, and flight attendants.

"I think they have a certain sense of insecurity toward their future. They feel like they have to do something to protect themselves," Mr. Honda says.