Western import helps Japan face recession

If there's a recession, Tadao Otsuki doesn't feel it.

In fact, Japan's economic woes are the reason business is booming for the youthful president of Drake Beam Morin-Japan (DBM), a locally owned branch of the US outplacement firm.

As embattled Japanese firms restructure, payroll cuts top their "to do" lists. Many companies bring in outplacement firms to advise them and then help laid-off workers find jobs elsewhere.

Profits for Mr. Otsuki and his associates rose more than 50 percent last year, they say. Business is so good, in fact, that DBM is expanding its staff as it helps other firms winnow theirs. "We've been hiring," says Otsuki, "and we're renting new office space across the way."

DBM's sleek offices offer just one of the more lucrative signs of turbulence in Japan's employment landscape. With joblessness at record levels and the economy mired, traditional corporate practices are falling by the wayside, as are employee attitudes about work.

Outplacement firms, a Western import, represent a new outlook, and their work seems only set to increase.

"It's becoming a typical channel for people to find jobs, no question," says economist Haruo Shimada. "The global standard is becoming the Japanese standard."

This is new territory for Japanese workers and companies. After World War II, the task of rebuilding the country meant lifetime employment. A cultural emphasis on harmony and hierarchy meant workers hired together received promotions and raises together. Companies formed an extended family, even facilitating housing loans and providing day care.

But as the economy matured and shifted focus from manufacturing to service industries, employment needs changed. And in the 1990s, a stubborn recession has made the old guarantees economically untenable.

"Now Japanese companies can't avoid thinking about change and restructuring," says Otsuki. "We have to change the system."

Change has been slow in coming, but it is certainly here. More companies are adopting merit-based pay. Temporary staffing agencies are growing quickly, and the number of male workers they attract has skyrocketed. Japan's employers' association no longer restricts when companies and graduating college students can approach each other about jobs.

Working hours have fallen below 40 hours a week for the first time since the government began keeping track. More fundamentally, jobs are no longer secure. Firms are closing or cutting back and unemployment has hit a record 4.3 percent.

Young people are adapting to the new environment, and many talk confidently about job-hopping, once considered anathema.

But the adjustment proves harder for middle-aged workers, unequipped for a mid-career job search and the first generation since World War II to face broad-scale layoffs. This is where outplacement firms come in.

"We are developing a new culture in Japan," says Takeshi Takamatsu, senior manager at JMA Management Center, a government-owned outplacement firm.

At its most basic, that means teaching newly laid-off employees that they are responsible for their careers, then showing them how to sell themselves. It's a tough psychological leap for people who have always been taken care of by companies, Mr. Takamatsu says. "They don't know how to see themselves as a product."

Both DBM and JMA take clients through extensive career counseling, focusing on strengths, teaching them how to write their rsum, go through interviews, market themselves, and network among contacts. Both offer computer classes, and JMA puts strong emphasis on Internet skills.

In this new economy, job-related suicides have risen sharply, as have reported cases of depression. Both DBM and JMA counsel clients on handling the psychological stress, urging open communication with their families and an emphasis on achievement, not drawbacks, in their job search.

All this costs the company a set fee, and the employees, when they find another job, a percentage of their first-year's salary. DBM estimates total outplacement business in Japan - the work of about a dozen firms - was worth $33 million in 1997.

That compares lightly with the estimated $1 billion that US outplacement firms brought in that same year, but the industry here is growing quickly. DBM says the industry was worth $18 million in 1996, and projects it at $69 million in 1999.

Both JMA and DBM claim high success rates for most of their clients, but that pace might be harder to achieve as layoffs continue.

Japan's shaky banks plan to cut some 15,000 positions here and abroad. At manufacturing companies, profits and investment have been falling and many are revising their growth forecasts downward - sure signs, economists say, that layoffs are on the way.